NFT is a landscape that cannot be ignored within the blockchain circle and even outside of it. It is unique because of its value formation, another microcosm of human value formation. nft can value the consensus of hundreds of millions of communities around the world, and it is moving forward at an irresistible pace. Only by better understanding the meaning of value and the appeal of “circles” can we truly be able to navigate this unstoppable tide ???? The only way to truly navigate this unstoppable tide is to better understand the meaning of value and the appeal of “circles. Let’s listen to Cipher tell us about the value and future of NFT.
I. The subjective nature of value
Before we start, we need to clarify the value itself. The connotation of value itself contains at least two overlapping meanings: the degree of usefulness and the degree of value. For example, Zhang San thinks the value of a person is the value of the car and house he owns. This statement contains two meanings of value. Here it is clear that the meaning of value discussed in this paper is biased toward the latter, i.e., value = how valuable a good is in the marketplace. The economics debate on value has a long history, and it is difficult to define value in a positive way, so we will try to start with what value is not. First, value is not a cost. Mixing $100 of oil with $100 of oyster sauce doesn’t give you a new product worth $200. If you define cost as a “valuable cost” or “meaningful payoff,” then that’s the same as defining value in a circular way. This does not explain value itself. Second, value is not an objective quantity, and different people have different assessments of the value of the same good. The saying “his honey, my arsenic” is about this. People in the desert obviously view water differently than people at the lake. Marginal utility theory actually supports the idea of subjective value. Next, value does not equal utility, i.e., a higher degree of usefulness does not mean more valuable. The famous “water and diamond paradox” in history tells us that water is vital to people, but diamonds are worth much more than water. Finally, value is not a synonym for scarcity. Goods that are valuable must be scarce. The opposite is not true. You and I have only one copy of our elementary school homework in the world, which unfortunately has little value. By the way, a small corollary to the subjective theory of value. Suppose someone buys a bottle of Coke for ¥2.50. This does not mean that the buyer and seller think that the value of ¥2.50 = a bottle of Coke. Rather, the seller believes that ¥2.50 is worth more than a bottle of Coke, and the buyer believes the opposite, which leads to a transaction that results in an increase for both parties. So there is never an exchange of equals in the world. If two things have exactly equal value to both parties, why exchange them?
II. Value consensus
But the subjective nature of value seems to be at odds with our common sense, we all know how much a pound of pork under normal circumstances, how much a bottle of pure water. Even if you are thirsty again, the kiosk usually will not increase the price to sell you. Here comes out another concept, namely value consensus. Everyone has formed a consensus on the value assessment of each commodity, and after this consensus is reached, people not only have knowledge of the value of the commodity for themselves, but also have knowledge of its value for others. Therefore, the market price reflects the value consensus of the group, rather than an individual’s value perception. But how exactly is the value consensus formed. I think there are about three sources. One is from the objective utility, because there is a consensus on the utility of a commodity, and people’s evaluation of its value is mainly based on its utility, then we can naturally form a value consensus. Typical commodities are everyday consumer goods, food, everyday services, etc. The second is from the law, typically such as currency. The law stipulates the sovereign currency of legal tender, tax unit, which makes people have a consensus cognition on its accepted degree. The third is the recognition or resonance of the story, emotion, narrative, and community behind the commodity. Typically, people know that the story that TA likes is also liked by others, which is the community consensus.
The value of NFT
From this, we can conclude that the value of NFT can come from three aspects.
Objective practicality: if it represents the rights of tickets, copyrights, digital albums, game props, etc., its value is the value of the actual goods represented behind it
legalistic: such as representing digital identity, holding different identities NFT can do different business in the platform
Emotion and narrative: for example, digital art, autographs of best-selling authors, celebrity debut commemorations, college graduation commemorations, etc.
Most current NFT platforms tend to focus on two small areas, one is digital artwork, such as visual art; the other is intrinsically useful, mainly including copyright and game props. But the truth is that the truly greatest source of demand and value should be the broader realm of emotion and narrative. This is the broadest and most solid consensus that exists in human society.
This conglomeration of valorization of the consensus on emotion and narrative is not a new thing. Long before the advent of the Internet, physical albums, posters, graduation photos, anniversary events and even ancient family crests, scepters, jade seals, etc. were all physical mappings of the so-called “imagined community” of the human brain in the real world. This mapping allows intangible influence to be transformed into tangible value carriers that circulate in the physical world and interact with the imaginary world. The emergence of the Internet allows people around the world who share similar ideas and emotional perceptions to quickly build communities online. This community is not necessarily a fixed forum; any social media comment section or even likes can connect a group of people. They share common perceptions, the same values, and recognize the same values in a particular vertical. But it wasn’t until the advent of blockchain and NFT that the value built by virtual networks was able to materialize at minimal cost. This “materialization” is NFT, which is limited, entitled and indivisible, and it is the physical object of the digital world.
IV. Common misconceptions
Speaking of which, we can finally criticize some popular misconceptions one by one. In fact, a large part of the wrong perception of NFT originated from the wrong perception of the blockchain or value network, the following part of the problem of replacing NFT with Bitcoin basically no problem. Wrong: NFT anyone can send a copy of the original image again, so there is no value
Solution: It’s not the graph that matters, it’s the story. It is the story, the emotion that forms the consensus. There is no difference in quality between the enlightened gosho sold at the temple gate and the factory tailpiece sold on Taobao, but people will only consume the former. What people buy is what’s behind the bill. Everyone can send a transit card, but only the one sent by Yang beyond himself has value. Error: NFT images must be put on IPFS, centralized hosting is not possible. Solution: As above, the picture is not important. The star project CryptoPunks chain does not even have a link to the graph, only hash. related resources into decentralized storage is certainly better, but not put no problem. Bug: NFT must contain a copyright notice
Solution: Pirated NFTs have no value. Conversely, there may be consensus on the value of an NFT even if it is not issued by the original copyright holder, as long as the community recognizes it. Wrong: NFT is in a huge bubble, full of scalpers
Answer: The first half of this statement is true, the NFT market is clearly bubble, and the price of NFT can be manipulated very high. But NFT itself has a value base, and not just scalpers can make noise. Scalpers do a better job of being a price discovery mechanism, but ultimately it is the collectors who recognize the value of the community that determine the price. Wrong: The best platform for NFT is Alliance Chain
Solution: It doesn’t make sense for a federated chain to do NFT because it doesn’t live long enough. People are willing to collect NFT because it has the properties of scarcity and ownership that it does not have in the information Internet era. And ownership is the most taboo of uncertainty and instability, which are precisely the disadvantages of the coalition chain. Imagine you get a limited edition NFT of your favorite singer’s last concert on the xx chain, only to have the chain shut down two years later with the business restructuring of its sponsor. How would you feel?
V. The future of NFT
The future of NFT lies in valorizing the consensus of hundreds of millions of communities around the world, and it is moving forward at an irresistible pace. Art, games, copyright, etc. are just a small piece of the picture in this big future. Soon, influencers, IP parties, and organizations will start minting and distributing their own NFTs. they may be a signature, or an emoji, or a medal, or a talisman, it will spring up in any form. But it must be something that is highly recognized by that community and has value. People outside the community may not see it at all, or even scoff at it, as we do now with the $69 million Beeple NFT painting.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/read-about-the-value-and-future-of-nft-in-one-article/
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