Viewpoint: Thinking about NFT development trends from the perspective of creators and platforms
The vision that NFT is really looking forward to is to become a part of ordinary people’s daily life, not a distant news item from most people as it is now.
Written by Zero Fire, founder of Nekowarp and builder of China’s secondary yuan community
Welcome to 2021, the not-so-good second year of the epidemic and the year of the rise of NFT, which came to all of us like a supernova explosion. Perhaps history is playing a malicious joke on us with the plague and the cultural movement, but it is hard not to think of the Black Death nearly 700 years ago and the Renaissance that followed, although the New Coronavirus and the NFT may not actually be related.
But at least the Renaissance and the NFT seem to me to have too many similarities. The early Renaissance with Leonardo da Vinci, the art dealers, the Medici family, the Uffizi Gallery, these elements built the modern system of art auction collecting (i.e., artists, auction houses, collectors, galleries). Now it is NFT that is replicating this process through electronic works. In my view, NFT auctions are not an end but a beginning. In the modern era, especially the Internet, this process is accelerated and, unlike the Renaissance, has a better industrial base and is not destined to follow the path of the past. Therefore, I think NFT will run through the Renaissance at 100 times the speed, passing through elegant art into popular art and being more widely accepted.
It is in this era of NFT’s rise that I, as an editor who has long been involved in the secondary community assisting individuals and groups in independent publishing [ sorry, I would like to say more accurately that I am a chief promoter/planner of a homo sapiens society, but I find it difficult to explain, so I borrowed this more understandable term], have been constantly working for more than a year. I’ve had friends mention NFT to me over the past year or so, and they want me to get involved. After their cursory introductions, I have come up with a series of ideas for NFT that are probably more unique and different from the current mainstream NFT perspective. These ideas seemed interesting to my friends, so I was honored to be invited to write this article.
It is dangerous to oversimplify a thing, but obviously a lengthy discussion can be a turn-off, so I will try to make my points as simple and clear as possible.
I’m going to break this down into 5 areas.
The prevailing views of NFT
The background of these views
How they reflect on the platform level
The reflection of these views at the creator level
The foreseeable future and beyond
Part I. Current mainstream views of the NFT.
The scarcity of electronic works through technology that would otherwise lack scarcity
Scarcity generates high value
NFT is the ability of electronic products to circulate faster than reality (offline)
Combined with the gaming space (virtual world)
Unlike cryptocurrencies, which are entirely consensus-based, there is an entity (electronic entity) that is more reliable
That’s pretty much the dominant view of NFT, and naturally it’s not hard to speculate on how NFT will evolve based on these views.
Scarcity is based on the premise that demand is greater than supply. As a non-essential artwork, only the works of well-known IP or creators will have more demand than supply, so it is inevitable and urgent to seek the cooperation of well-known IP and creators.
In the long run, the stay of creators and groups depends on sufficient revenue (money, fame, freshness, etc. are what I call revenue here). So for quite some time it is necessary to maintain the need for NFT revenues to be always higher than non-NFT.
In the game field, in order to ensure that game assets are not abused by development and operation, and to form a reliable virtual goods preservation, a third-party autonomous group and platform independent of development and operation must be created to supervise in-game NFT goods and subsequent transactions and management.
Part II Background of these views of NFT
In my opinion the general context for the rise of NFT is that
With the big release of investment institutions in the US into the cryptocurrency space in a big way, it has given the cryptocurrency believers access to more money than they could ever imagine, but at the same time this insecurity has become more and more onerous for the more believers in cryptocurrencies, as the application scenarios for cryptocurrencies are still extremely limited as of today, and the ratio of their commercial attributes is overly heavy and far from normal. This is why the insecurity of cryptocurrencies is more intense than ever. This insecurity has led to a desperate need for risk transfer and stress relief for believers, but since believers believe in cryptocurrencies, NFT has become the obvious choice. This led to the rise of NFT in 2021.
But the core proposition and proponents of NFT are not the creators themselves, but rather the practitioners of IT technology (later referred to as techies). Even more directly, the foundational ideas of NFT were born out of blockchain and cryptocurrency technology, and the current NFT was born after the techies lobbied the copyright holders (galleries, auction houses, copyright brokers, and even individuals).
Although the copyright holders are backed, they are not the actual creators like the techies, so NFT currently lacks a creator’s perspective. The current thinking is more from an economics perspective. If it’s electronic works now, it could be tulips, horse racing, gold, cryptocurrencies, unproduced Star Wars toys [ Star Wars toy sells for record-breaking $112,926 at central Pa. auction], sneakers.
After all, plants and animals can be cultivated quantitatively, and rare minerals or cryptocurrencies can be obtained by consuming resources, while unmass-produced Star Wars toys and sneakers are manufactured according to the number of orders. But cultural products depend on the subjective generation of human creativity and produce works, it is very difficult to be carried out in an almost assembly-line manner, even though Marvel has achieved success, but this success is difficult to get a complete reproduction on DC. At the same time if you have some understanding of traditional marketing does not include cultural marketing.
So works created by creators, electronic works must not be simply and crudely compared to plants, animals, ores, cryptocurrencies or some industrial product, but must take the creators themselves into account as an important factor.
Because of the lack of technical understanding of creators, the current NFT proposition is necessarily unaware of the essential needs of creators, and even ignores them to some extent, intentionally or unintentionally, and of course at this stage the NFT does not need to engage directly with creators (but I don’t think it will be long before it does, as will be explained in Section 5) but rather with the more commercial with more commercial copyright owners. In this case, the direct appeal to individual creators is more limited (at worst, the revenue is negative because gas fees need to be paid up front), while the freshness that NFT currently offers is more attractive.
Because NFT is clearly not natural to creators’ thinking. In general, creators are concerned with what is essentially self-expression – the work that is created is the result, and continued creativity depends on the positive feedback that is generated by that work. Positive feedback can be money, applause and flowers, or novelty (in no particular order), and as long as one of these positive feedbacks meets the minimum threshold for creators, they will have the subjective will to create (as an example, why there are struggling artists, who continue to create as long as their income is sufficient to survive). For more creators who are introverted or even immersed in their own world, only a small percentage of them have a strong power of action outside of creation.
Of course, it cannot be ruled out that a creator creates based on economic benefits, and he is better at getting revenue from it. But after accumulating a certain amount of wealth, these people will soon transform into art brokers or some kind of management in the fine arts, or even move directly into the commercial field, thus abandoning their original creation. I am not trying to deny their significance here, but I want to make it clear that on a longer time scale, they are not the main creators of content for NFT. The NFT is in such an environment.
NFT is growing rapidly in such an environment, but then the possibility of falling into tulip fever or Atari shock* begins to increase rapidly. Because the value of electronic works is extremely dependent on subjective judgments, especially the purchase of scarcity and not just its artistic qualities.
The Atari shock, also known as the 1983 collapse of the U.S. game industry, was the most iconic event, as the chaotic business strategy of industry leader Atari led to a flood of shoddy games and a steady decline in player confidence, with the Atari game burying (the decision to bury the lagging first-party Atari game E.T. was widely reported in the media). The impact of this collapse lasted for three years and the North American gaming market shrank severely, from $3.2 billion in 1983 to $100 million in 1985. It lasted until the end of 1985 when Nintendo broke the deadlock.
Finally, I would like to clarify that while I have analyzed and criticized the current view, I am not saying that the technocratic proposition is wrong, I even think it is the most critical and difficult stage of the development process to start, but that an overly technocratic-based proposition would hit the ceiling of the model’s development and make it difficult to move to the next stage, or even stagnate as a result. This is because this route is not based on an objective analysis of creators’ needs, but rather on the perspective and path dependence of the technocrats’ own thinking about the problem. Or even the wishful thinking of replicating the journey of cryptocurrencies by simply replacing them with NFT.
Part 3 The reflection of these views on the platform (NFT auction platform) level
By now, we have understood the dominant views of NFT and the reasons and context for its formation. Then, at the level of concrete means of implementation, it is not difficult to deduce what the NFT auction platform has done or is planning to do in the short term.
Acquire licenses for well-known IP and produce related electronic works. Including but not limited to: sports stars electronic collector cards, the NFT of network memes, well-known artists, musicians to launch NFT works, well-known American manga, Japanese manga IP to launch independent NFT works, NFT electronic handicrafts (most will also rely on well-known IP or well-known original author). In short, it is through the cooperation with copyright owners to launch NFT property products.
In the above case, the high revenue will attract more copyright owners or even individual creators to join directly.
More aggressive promotion of electronic works and their creators, and the launch of NFT star campaigns as models and prototypes
Collaborate with games to NFT in-game assets – items, properties, skins or characters.
NFT platforms gradually incorporate copyright owners, art brokers as part of them, or conversely the latter set up their own NFT platforms.
But there is a problem with all of this: why does it have to be NFT for the copyright holders, what are the benefits beyond the potential high financial rewards, and how long can the orgy of high financial rewards last? Uncertainty about this leads copyright owners to seek a floor price.
For the purpose of attracting creators to join (individual joiners or copyright holders), the NFT platform will support a select group of promising creators as a model, but such unnatural star-making implies extremely high costs and a clear lack of sustainability. Ultimately, a more universal model for promoting electronic works and creators is needed than a prototype project.
While games can provide a more trustworthy guarantee, NFT is currently not needed in the gaming space, but rather to build a consensus of trust through long-term stable operations, such as Counter-Strike’s (or Fantasy West in China) acquired game assets that can be appreciated and traded (and even have a rich secondary market). There is no benefit to the emergence of NFT other than being more trustworthy, and there is no guarantee that these game assets will not be devalued to zero when the game is shut down. Even NFT cannot guarantee that it will not lose itself when its own NFT platform closes, and there is clearly no NFT platform as strong as cryptocurrency.
Therefore, the interest in the gaming sector will be extremely limited, but of course we cannot exclude the emergence of a landmark event that will satisfy one thing – the complete destruction of the control of people over game development and operation of game assets. At this point there will be a strong demand for such forms of NFT and third-party agencies.
The problems that exist with these means and methods are what the platform is going to solve. Of course, I think that after a period of development (with bad luck, NFT may experience the decline and then prosperity of the game industry), these problems will be solved by having “enough creators who continue to create”. Because “enough creators who keep creating” will generate enough electronic works, and among them there will be popular electronic works, which will bring stable users and audience, and eventually consolidate the NFT platform and the whole NFT.
The problem comes to this – the
Part 4: How these views reflect on the creator level
Before we begin, let’s throw out the misconception that creators are people who are willing to try new things, but they are not.
The only two reasons I can think of for creators to participate in NFT are the benefits it can bring.
To try something new and to satisfy the dream of auction
Sell directly to the copyright holder for a guaranteed fee, handed over to the art broker
Although NFT seems to be highly profitable, its appeal to creators is extremely limited, which is not difficult to understand from a game theory perspective. Of course, I have a more understandable example here, let me quote an analogy made by an American artist friend, who explained why he did not participate
“This thing (NFT) is like a dating site, where the artist is the man and the seller is the woman. As the man, I have to pay the money, and there is no certainty that there will be a suitable woman, but the money will be paid whether it is successful or not.
And NFT, I don’t know if my work will sell for a high price, but in nowadays it is gas fee that must be paid for sure, the rich get richer the poor get poorer, so for me it is a scam.
For him or the artists he represents, the high-yield NFT is an act that has nothing to do with them, and even for them their participation is equal to being cheated. And he is not some unknown artist, he [ https://twitter.com/ClickAgain 219.7K Followers ] is the former art director of the independent game studio lab zero game (the studio was closed due to internal disputes).
And there is an inherently sound logic to their choice –
Let’s divide men who use dating sites into three categories according to their attractiveness to the target group.
If you are a quality male, you honestly don’t need to come to a dating site, you will most likely find the object of your choice, and it’s even possible that the object is always changing. And they appear in the dating site generally speaking is invited by the platform or want to do a self-identification cognitive confirmation. These types of people are obviously not long-term users of dating sites (and honestly who would be a long-term user of dating sites?) But their appearance is bound to be extremely sought-after, and will even make the news as a success story for the dating site.
Of course there is no denying that there are a few quality males who are unaware of their own strengths before here will learn about themselves, but how many of these people are there?
If you are an average male, then that means you are gambling every time, and every time you pay money to use a dating site it means performing a pull of the joystick on a slot machine. Most of the time there are no results, some times there are small prizes and only a very small chance of winning the jackpot. So as the average male lacks the motivation to use or even try, it’s more of a speculative mentality so will take more of a wait and see approach if they are successful in this class.
And the most active men who try are often those who are not popular, but for them is closer to the self-loathing type, after all, how much worse can it be, will only be rejected as usual, but in case better is earned. So they will be more aggressive in trying to use dating sites, but encounter failure will soon give up.
The above logic is the same for painters, so NFT’s current model is highly consistent with dating sites, although not unsustainable but difficult to have greater growth. Like Mark Zuckerberg’s initial idea of establishing an invite-only “ConnectU” dating platform with Harvard as its core, I’m afraid its development will not become the Facebook of today.
Some may argue that the gas fee is not a problem, and can be waived directly by the platform, or postponed to be borne by the buyer. This would create a new problem, although it would lower the barrier of entry for a large number of hesitant creators to enter, but it would also allow a greater proliferation of shoddy works, and the latter would obviously increase more.
Part V The foreseeable future and a bit further ahead
Following on from the previous section, it is not difficult to deduce what will happen in the foreseeable and more distant future.
Too much money is competing for a small number of quality NFT works, while the NFT platform is flooded with poor quality works by a variety of creators, and moderate NFT works are drowning in them, relying too much on the recommendations of the relevant professional media.
The high premiums for the few quality NFT works may induce a tulip fever, while the large number of poor quality works flooding the market will inevitably lead to an Atari shock. In this model NFT is a fragile market, difficult to carry more money and demand, very easy to overheat and collapse.
I do not think the current state of NFT is wrong, but I think is that if it continues in this direction its development is bound to be limited, need to realize that this is just a phase. I’m even confident in saying that even a collapse would only cool the overheated market, just as the game industry rose again within 5 years after the Atari shakeout, led by Nintendo, and is still today.
So what does this phase mean now?
As I said at the beginning, the development of fine art is dependent on artists, auction houses, collectors, and galleries, a model that still works well but is isolated from most people. The last elegant artist known to the public I think is probably Picasso (although now there is Banksy, but obviously not famous enough, and itself is more street art, or popular art rather than traditional elegant art). But it doesn’t mean the disappearance of high art and the system behind it, but the extreme elitism but apparently limited scale. For the masses instead of elegant art is popular art, not vulgar but also let is by no means elegant.
But without the support of a single patron, there is no possibility of popular art. Although perhaps not intended, the NFT is clearly replicating the Renaissance model of art distribution, which is why it now relies heavily on traditional auction houses and copyright holders rather than the creators themselves as providers of electronic works.
This is why I don’t dismiss the current NFT model. But considering that, unlike the relatively backward productivity of the Renaissance, good works can be easily reproduced and mass-produced today, and that Internet platforms are growing 10 or even 100 times faster than their offline counterparts, advance planning is a must.
Here I hope you think outside the NFT stereotype – the value of NFT is scarcity. Because the scarcity of NFT now is actually highly dependent on the reputation accumulated before the NFT-ization. And while I think NFT will soon become a necessary attribute for all electronic works, based on the Geithner curve (Technology Maturity Curve / The Hype Cycle), while there is potential for this, the current market is physically carrying the inevitable tulip fever and Atari shock collapse. This is not the end, but a necessary market clearing mechanism, as the Atari shock after the Nintendo brought better mechanisms and games, the game industry then came to today, even more hot because of the rise of card draw games.
But, why is that so?
Because it is clear that the commercial properties of NFT are brought about by its instrumental properties, and now too much attention has been paid to its commercial properties to the neglect of the importance of instrumental properties, which in my opinion need to be further exploited in order to stabilize the market.
Ultimately, NFT is to electronic works, as Alipay is to Taobao.
Now NFT and Alipay, in terms of the proportion of commercial attributes and tool attributes, they are almost the same or even a higher proportion of commercial attributes of NFT, but now NFT does not have a complete “Taobao, Tmall” (i.e. content and content market) to support it. This is the fundamental reason why NFT is unstable.
The changes that NFT’s tools can bring are huge, not only in terms of accelerating the electronicization of all offline works, but also in terms of moving away from the old model of reliance on centralization (publishers, bookstores) to a faster and broader decentralization (highly personal and atomized). Because the hardest part of a work for a creator is to be known by others, so they have to rely on a centralized group, but with NFT, it is easy to trace the source and readers can directly know where the image they have seen came from. Then the entire industry ecosystem will change dramatically.
In fact, this trend has already begun before the arrival of NFT, some individual creators have already relied on social networks to complete self-production and self-sales, skipping the publishers, editors and other tedious processes, but of course they are still working with bookstores for their physical and electronic distribution.
So the single auction model of NFT will soon pass and be replaced by a hybrid model, i.e.
A large number of copies of NFT properties will be distributed electronically in a similar way to bookstores distributing books, magazines, picture books, etc., while the only NFT electronic originals (in the case of fine art, there will be layers with more details of the artwork) will be auctioned off at the same high prices as the physical manuscripts and originals of the works.
Just like Harry Potter, there was only one original manuscript when it was given to the publisher, and even though it had its own literary value at the time, it was worthless from an economic point of view because it lacked widespread recognition. But after a large number of copies were distributed at low prices, its literary value was recognized through a wide audience, and now the original manuscript has a high economic value.
Thus, scarcity and universality are not either/or, but are mutually reinforcing and mutually inclusive.
Moreover in terms of the market, it is clear that popular art is far more massive than refined art, and although the price per piece is much lower, it has an absolute advantage in terms of quantity.
As I said earlier, as NFT develops, the cooperation between the various platforms and the copyright holders will be short-lived, and this cooperation is more a result of the mutual needs of the initial entrants to the field. But after a period of time, they will each build their own, and then the NFT platform will be the same as the game console, PC gaming platform.
That’s why I talked more about the creator than the copyright holder as an intermediary.
If the example of game platforms is a bit far from you and hard to understand. During the industrial revolution, the powers controlled colonies for similar reasons, simply to control the production of raw materials to serve their own industries, and colonization was the most cost effective way to do so. For NFT, the creator is the core raw material.
So I think the most critical point of NFT is the creators, because back to the source, they are the root of it all.
If this is a bit of a leap to understand, then it is better to understand it this way
During the Industrial Revolution, in order to satisfy the growing domestic market and the increasing production of factories, the powers chose the easiest and most “economical” way to control the source of raw materials – colonization. The new international system after World War II dismantled the original colonial system, and the original powers had to adopt a more “troublesome” and “costly” way to trade with the raw material sources.
So here we regard the NFT platform as each power and the creators as the source of raw materials.
Source of raw materials – “Powers (manufacturing & processing factories, markets) – “Consumers
creators – “NFT platform (for NFT, market) – “collectors
So, in my opinion, when the competition between NFT platforms gets hot, they must start to compete for creators, just like the powers during the industrial revolution.
So how to catch them, obviously it is not enough to rely on the “possibility” of high economic returns from NFT, the so-called to catch the hearts of people must catch their stomachs, to provide what they are hungry for –
Basic economic security
Applause and flowers (wider distribution)
Freshness (like fashion)
In this way, they will keep on creating.
So how do you do it? Offering NFT directly is not only unattractive, but also time-consuming to explain and convince. How can we better winning hearts and minds for creators?
Better traceability of works (with some anti-piracy capability)
Good community interaction (translation into a second language, reader meetups)
Provide the services that creators need (help them facilitate production in kind, assist them in attending exotic trade shows)
To address the first point, here’s an additional clarification – tracing the origin of works currently distributed on the Internet is extremely costly, unless it comes with a watermarked signature and that name can accurately point to the original author. Otherwise, it is likely to appear that the fire is all over the Internet but no one knows the creator, not to mention paying for it. This is the strength of blockchain technology, and NFT can do it.
All of these options already exist and have been implemented but lack systematic integration.
If you can do that you don’t need to explain to them what NFT is as part of a package. Unless they are interested in NFT, I wouldn’t even recommend mentioning NFT to them individually, because it takes a huge amount of time and cost to explain what NFT is to creators who don’t have the knowledge, and it’s easier to get creators for the same amount of effort.
For example, if a group of artists attended an exhibition in South America and went on a tour, during which they created a series of works, they agreed that their past and current works could be promoted and sold through the platform that organized the event. There will be physical sales at the show, online sales of NFTs in the form of reproductions, and auctions of original NFTs.
The advantage of this operation is that its revenue and cycle are extremely stable. Also once a creator joins a platform they will not easily move to another platform unless there is a greater temptation.
This is the way to make creators stay and use it naturally, without the need for creators to try it with apprehension. As with cashless spending in China now, for foreigners there may be an argument for experimentation, but for the Chinese it’s already commonplace.
I think this is the vision that NFT is really looking forward to, and the future that will eventually be realized, where buying electronic art with NFT is part of the everyday life of ordinary people, and not news as it is now, news that is far away from most people.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/viewpoint-thinking-about-nft-development-trends-from-the-perspective-of-creators-and-platforms/
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