Guangming.com: NFT development should be low-key and pragmatic, and beware of hype and fanfare

Recently, NFT has become the biggest focus of the entire investment market. In March of this year, the NFT work “Every Day: First 5000 Days” by American digital artist Beeple was sold at the world’s top auction house Christie’s for a sky-high price of US$69,346,250, becoming the third highest auction price for works by living artists. Subsequently, many NFT digital art are also sold for an incredible price: a virtual stone portrait in August to 400 Ethernet Square sold (US $ 1.3 million) price; and a zombie CryptoPunk works In August, it sold 1,600 Ethereum (approximately $5.3 million) for a high price. These “sky prices” one after another make people wonder: what exactly is this NFT? Why is it worth such a high price?

What is NFT?

The so-called NFT is the abbreviation of “Non-fungible Tokens” (Non-fungible Tokens). As a token, it is relatively equivalent to the familiar Bitcoin and Ethereum.

When we talked about tokens in the past, we mostly referred to homogenized tokens. The homogenized token is very similar to currency in nature, and the value of each unit of homogenized token is the same. Take Bitcoin as an example. According to Satoshi Nakamoto’s design, after all mining, the total number of Bitcoins will be 21 million. In the course of use, each of these 21 million bitcoins has the same value-as if every one dollar bill is equivalent.

NFT is different. If homogenized tokens are more similar to currency, then NFTs are more similar to property rights certificates. Behind each NFT, there is a different item, so its value may be completely different. Take the popular encrypted cat NFT in the “chain circle” as an example, it corresponds to an electronic pet called the encrypted cat. Just like cats in reality, this electronic cat is very different in pedigree, coat color, development and other aspects, so its corresponding NFT value is also very different. Some electronic cats are relatively common, so the price may be only a few dollars; while some electronic cats are rarer in some shapes, so their price may reach hundreds of thousands or even millions of dollars.

Application prospects of NFT

What is the use of NFT? In my opinion, its biggest role is property, especially the right to digital property. With the development of the digital economy, the proportion of digital property in social wealth has become higher and higher, and the urgency of confirming their rights has become higher and higher. However, practical experience tells us that it is not so easy to confirm the rights of digital wealth. For example, we can often see many very fun funny emoticons on the Internet. Their designs are usually very original and very popular with netizens. If calculated in terms of usage, these emoticons should be able to generate very high value, and their creators should be able to get a lot of rewards from them. However, in reality, it is almost difficult for creators to get high returns from emoticons. The reason is simple: once he puts this emoticon on the Internet, everyone can easily copy and spread it, and it is difficult for original authors. control. Of course, creators can also hide this emoticon, and then privately trade with people who are interested (in fact, this is also the way some creators actually use it), but in this way, the popularity of this emoticon cannot be verified. Its value is difficult to be reflected. So, is there any way to allow this emoji package to circulate freely while confirming and protecting the rights and interests of its creators? One way of thinking is to issue an NFT corresponding to this emoticon pack. In nature, this NFT is like a certificate for holding a famous painting. In reality, famous paintings can be displayed in galleries, and viewers can freely visit and even take photos, but as long as the collector holds a certificate, then the painting belongs to him, and he can trade the painting according to his wishes and obtain the corresponding income. Similarly, in the digital world, once the creator issues the NFT corresponding to the emoticon pack, even if the emoticon pack is widely spread, its ownership is still in his hands, he can freely choose to trade or hold it, and Gain benefits from it.

It should be pointed out that although from the current practice, the application of NFT is mainly concentrated in the field of digital art, but theoretically, its application range can actually be broader. For example, the right to confirm data is actually a problem that plagues the construction of the data element market, and the introduction of NFT is likely to be a solution to this problem. Another example is that the concept of “Metaverse” is now being valued by more and more people. According to the vision of “meta universe” enthusiasts, everything in the real world may be moved to the virtual world in the future. So, in this virtual world, how should people confirm the rights of various properties? NFT may be one of the most feasible options.

All in all, it is no exaggeration to say that the future application prospects of NFT will be very broad.

Beware of “to kill” NFT

Although from a long-term perspective, NFT has huge application potential, but to be honest, at this stage, its practical application is still very few. In fact, in addition to some applications in the art field, most applications of NFT are still being explored. However, at a time when such applications are still scarce, the excitement of NFT in society has reached an incredible height. In many media, NFT has been crowned the title of “the cornerstone of the future economy” and “the economic foundation of the meta-universe”, and the NFT of the “expensive” electronic artwork reflects the irrationality of the market. In my opinion, such excitement is definitely not a good thing for the healthy development of NFT.

The world-renowned technology consulting company Gartner (Gartner) once proposed a well-known technology maturity cycle model. According to this model, after a new technology appears, the society’s expectations for this technology will rise rapidly. Before it can produce real social value, this expectation may reach an unrealistic height. However, as this technology begins to land gradually, people will find that the actual value of the technology has not reached the original expectations, so expectations for this technology will quickly fall. Only when the application of this technology has matured and its value has been truly proven, will people’s expectations for it recover and stabilize.

Relevant studies have proved that when society’s expectations for technology reach that unrealistic high point, the development of this technology will reach a very dangerous moment. Because as long as it cannot achieve the value that meets this expectation in the subsequent period of time, people will quickly abandon them, and the related investment and R&D will disappear. The development of many technologies will be stagnated as a result, and there will never be a chance to reach maturity. Generally speaking, the more people praise and expect a technology, the less likely it will meet people’s expectations later, and the greater the likelihood that people will lose confidence in it. In layman’s terms, “the higher you climb, the harder you fall.”

Not long ago, Gartner released the latest technology maturity curve (pictured). This curve shows that, as a technology, the current NFT has stood at the expected high point. From the previous discussion, we can see that for it, now is a very critical moment. At this moment, all the excessive boasting and exaggeration of the NFT function, as well as the “cutting leek” and profit-making behaviors that take the opportunity to have a very negative impact on the development of NFT. Therefore, if we want to make NFT stable and far-reaching, we must be pragmatic and strive to explore the application of NFT in practice; on the other hand, we must remain humble and cautious, and resolutely reject all kinds of speculation and hype related to NFT. To do all of this, relevant companies and practitioners need to delineate the boundaries of their behavior.

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The good news is that some companies now have realized this. While exploring new technologies such as NFT, they have put the legitimacy of behavior in an increasingly important position.

Recently, AntChain, the technology brand of Ant Group, issued a “serious statement” against the chaos of NFT hype, clarifying the “three non-doings” of NFT business: resolutely oppose all forms of digital collection hype, and resolutely resist any form of digital collection in the name. Violation of laws and regulations related to virtual currency activities; resolutely resist any form of malicious speculation of digital collection commodity prices, and use technical means to ensure that commodity prices reflect reasonable market demand; resolutely resist any form of digital collections’ equity transactions, standardized contract transactions, and other violations of laws and regulations Act against the financial productization of digital collections.

“The hype violates the basic law of value, and the rise of false fire is harmful to society.” When the false fire of NFT rises, AntChain proactively informs users of the true value of NFT, reminds investment risks, and resolutely combats related speculation. Judging from the digital collections issued by AntChain, national comics, museum collections, public welfare paintings, digital torches…, behind each work is the value of IP itself.

In my opinion, the above attitude towards NFT is very worth learning. Only by adopting such a low-key and pragmatic attitude can the long-term development of NFT be guaranteed; and blindly hyping and bluffing will only ruin the future of NFT.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/guangming-com-nft-development-should-be-low-key-and-pragmatic-and-beware-of-hype-and-fanfare/
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