Economic Daily: Digital collections urgently need to be regulated

In recent years, digital collections called “NFTs” (non-fungible tokens) have become popular all over the world. From a practical point of view, it is not enough if digital collections are only regarded as cultural and creative commodities traded online and supervised by market supervision departments and intellectual property departments. As a derivative of financial technology, digital collections have commodity attributes, currency attributes, securities attributes, etc., and their supervision involves multiple departments, and it is urgent to establish a joint supervision mechanism.

Recently, the sheep head of the twelve animal heads of Yuanmingyuan, which has been missing for many years, “appeared” at the auction, and the hammer price was 8,141 yuan. This price will definitely not buy real cultural relics – in fact, what consumers buy at a high price is just a virtual animation, but with a unique code in the world. According to related plans, the virtual animations of the twelve animal heads will all be unveiled at the auction.

In recent years, this kind of digital collection called “NFT” (non-fungible token) has become popular all over the world. Last year, a piece of artist Beeple’s “NFT” fetched a whopping $69.34 million at Christie’s, starting at just $100. In China, not only Internet platform giants have entered the field, but also a large number of start-up companies have built platforms, attracting countless individual creators, artists, museums, and brands of various sizes to release digital collections.

At present, some platforms adopt the direct purchase price combined with the auction price, but this price difference may not be able to catch the leak, and may also leave a loophole in the market disorder. Taking the Yuanmingyuan animal head series as an example, there are 10,000 copies of each of the twelve animal heads in this issue, of which 9982 copies can be purchased directly for 29.9 yuan, and there is no limit. After 90 days, they can be transferred through the WeChat applet, and only 1 are actually auctioned. share. This is very subtle, because the high price of thousands of yuan in this one auction will become the reference price when the previous low-priced “same style” is transferred. And, will it continue to be released in the next issue? Industry insiders believe that it is not ruled out that there are buyers who hoard a lot of goods in the early stage and then raise the auction price so that they can “transfer” at a high price in the later stage.

People pursue works of art, one is for the appreciation value of beauty, and the other is the collection value brought by scarcity. Whether digital collections have an appreciation value commensurate with the price varies from person to person, but judging from the high transfer demand, most buyers mainly want to make money through transfer. However, the production cost and reproduction cost of digital collections are low, and the scarcity is doubtful, which may not support the expectation of appreciation and shatter the dream of becoming rich.

There is also a layer of risk for domestic consumers: “NFT” is essentially a token abroad, generally built on the public chain, and the value of the work is recognized. Domestic institutions insist that they only make digital artworks, and most of the trading platforms are based on alliance chains. Some startups also build their own platforms and blockchains. There are so many platforms and alliance chains, which means that the price system of digital collections is not strong and the risk of speculation is high. Some platforms prohibit secondary resale, but the ban is not effective, and private transactions are still frequent. Recently, WeChat has banned a number of public accounts of digital collection platforms suspected of illegal speculation or secondary transactions. There are still some platforms that directly release and resell and charge high commissions. Once the platform shuts down, consumers who take orders at high prices may suffer heavy losses.

From a practical point of view, it is not enough if digital collections are only regarded as cultural and creative commodities traded online and supervised by market supervision departments and intellectual property departments. As a derivative of financial technology, digital collections have commodity attributes, currency attributes, securities attributes, etc., and their supervision involves multiple departments, and it is urgent to establish a joint supervision mechanism. According to reports, the U.S. Securities and Exchange Commission is investigating “NFTs” for illegal fundraising, and the U.S. Treasury Department also warned that “NFTs” could become money laundering tools. Some domestic experts suggest the introduction of a “regulatory sandbox”, select platforms to communicate closely with regulatory agencies, report in advance measures such as operating mechanisms and consumer rights protection, and conduct trial operations within a certain period of time and within a certain scope. This is also an idea.

Web 3.0 with blockchain, Metaverse, “NFT”, etc. as the core is regarded as the next stage of the Internet. Compared with the Metaverse, digital collections are more moving and are the fastest application scenarios for blockchain. In this way, we can polish and popularize new technologies and strive for the opportunity for China to take the lead in opening the door to the new world. For this kind of new things, it is necessary to be tolerant and cautious, and also need to pay close attention to find a cautious key. Before the regulatory mechanism is clarified, consumers are advised to treat it calmly and participate rationally.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/economic-daily-digital-collections-urgently-need-to-be-regulated/
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