Overnight, NFT became a hot topic.

This concept, which seems to be only popular in geek circles, is now extremely popular "outside the circle". Starting in 2020, people from all walks of life, from Elon Musk to Yao Ming, from Coca-Cola to Disney and Marvel, to LV, GUCCI, eBay, and Facebook, have begun to play with NFT.

Sky-high auctions are an important driver of NFT’s emergence in the industry - a set of works by digital visual artist Beeple, "Everydays: The First 5000 Days", was sold at Christie's for a sky-high price of US$69.35 million in the form of NFT; The "world's first tweet" consisting of only five words posted by the CEO of Twitter was auctioned for US$2.9 million. Currently, there are four crypto artists in the world who are worth hundreds of millions because their works are popular in the NFT field.

All kinds of strange things have been cast into NFTs, such as Steve Jobs’s handwritten “job application”, NBA highlights, sneakers, WeChat/QQ avatars, virtual stones, Buddhist amulets, real estate, World Wide Web source code, Nobel Prize papers, Time Magazine covers, etc.

In the scene of “everything can be NFT”, what exactly is NFT?

NFT is a Non-Fungible Token, and its “non-fungible” means that each NFT is unique and indivisible. This means that when a work is minted into an NFT, it becomes a unique digital asset on the blockchain.

Technological revolution, copyright protection variables, speculative bubbles, the prelude to the metaverse... the meanings carried by NFT in the eyes of different people are very different. As NFT is making rapid progress in overseas markets, more and more domestic players are embracing this new thing. After the rise of the art field, domestic Internet giants have also sought to enter NFT. What changes will it bring about, and what do the major manufacturers intend to do?

Judging from the most practical technology implementation results, the entertainment and art industries are currently the most enthusiastic embracers of NFT.

NFT provides new ideas for solving copyright issues. When a work is cast into an NFT and put on the chain, the work is given a unique code that cannot be tampered with to ensure its uniqueness and authenticity. In this way, no matter how many times the work is copied or distributed, the original author remains the sole owner of the work.

Not only that, compared with the traditional form of art trading, when NFT circulates, every transfer of its ownership means that the creator can profit from it. Taking the trading platform Super Rare as an example, In the first transaction, the artist gets 85% of the income and the platform gets 15%; in the second transaction, the seller gets 90% and the artist gets 10%. In the traditional trading method, even if the original work is sold to sky-high prices in multiple circulations, it is difficult for the artist to profit from it again.

The potential for profit has attracted speculators. Coupled with the existing high-return cases of NFT, many players hope that the value of the NFT they buy will increase overnight.

Data from nonfungible.com, a website that tracks NFT market activity, shows that after Beeple’s work was sold at Christie’s this year for more than $60 million, the NFT market transaction volume that week reached $100 million for the first time. Although the subsequent decline in the cryptocurrency market had a certain impact on NFT transaction volume, in early May, the NFT market's transaction volume soared to nearly $200 million that week.

With the enthusiastic support of artists, geeks, investors and other parties, a mature NFT trading mechanism has gradually formed overseas - after the creator releases the NFT for the first time, other buyers Everyone can continue to make secondary transfers and purchases on the NFT trading platform.

The process of an NFT being sold for the first time occurs in the primary market. There are many popular NFT projects in overseas markets. Data from nonfungible.com shows that in the second quarter of 2021, three NFT projects have sales of more than 10 million US dollars in the primary market, and there are currently four projects in the market worth With more than 10 million, MeeBits, the most valuable NFT project among them, is worth US$90.76 million.

In addition, NBA Top Shot, which sells highlights of NBA stars, and CryptoPunks, which sells pixel avatars, are also very popular NFT projects.

The circulation process after issuance is the secondary market transaction. In addition to OpenSea, the world's largest digital collection trading platform, trading platforms Nifty Gateway, MakersPlace, Rarible, etc. are also very active. Most NFT trading platforms are based on the public chain "Ethereum". However, due to Ethereum's low throughput, high transaction fees, and crowded channels, some platforms will also choose to be based on new public chains such as Flow and GSC. In addition, large NFT trading platforms such as OpenSea and Rarible also have the "issuance" function of the primary market.

Compared with the popularity overseas, the development of NFT in China is a little late, but now more and more domestic players have entered the NFT game.

The popularity of NFT in China also starts from art. Chinese crypto artist Song Ting is the 2020 Chinese NFT crypto art auction record holder. Since March this year, musicians Gao Jiafeng and Aduo have released their own NFT digital music works and been bought at high prices.

However, what is more conspicuous and influential is the entry of enterprises and institutions. At present, one of the institutions most actively embracing NFT is the music copyright agency:

In May of this year, Alibaba The auction launched a special session for NFT digital art. Later, in June, Alipay jointly launched 4 NFT payment code skins with the Dunhuang Fine Arts Institute and the domestic animation "Assassin Wu Liuqi"; in July, NetEase's game "Eternal Tribulation" IP also authorized the release of NFT Tencent launched the NFT trading software Huanhe APP in August, with the first limited sale of 300 "Audio "Thirteen Invitations" Digital Art Collection NFT". Tencent Music (TME) also announced that the first batch of limited-edition "TME Digital Collection" will It will be released one after another on QQ Music.

However, unlike the public chains chosen by most overseas NFT trading platforms, when Tencent and Alibaba entered the NFT field, they were based on the alliance chains of Zhixin Chain and Ant Chain built by their own companies respectively. Compared with public chains, alliance chain participants are controllable and have stronger privacy protection capabilities. In addition, NFTs launched by Tencent, Alibaba, NetEase, etc. cannot be traded for secondary transactions.

For example, after users purchase the "Audio "Thirteen Invitations" Digital Art Collection NFT", they can only view and collect it. The platform does not provide opportunities for secondary transactions, and currently users cannot purchase it on the platform. Launch your own NFT works. Similarly, users can only view and collect Alipay payment code skins, and cannot transfer them to gifts or make secondary transactions.

Under the background that the development of domestic NFT is still immature, the caution of major manufacturers is obviously to prevent the test of waters from turning into a hype craze for speculators. However, the signals revealed by the successive entry of entertainment industry and technology companies are equally obvious: NFT is an existence that cannot be ignored.

People’s attitudes towards NFT are divided into two extremes: supporters believe that NFT will not only affect copyright protection methods, but also from a longer-term perspective, NFT will make the concept of the “metaverse” a reality; but opponents I feel that NFT is just a new way of speculation.

Both are not unreasonable. The impact of NFT itself is multiple.

The metaverse refers to a virtual world that is born out of the real world, parallel to the real world, affects each other, and is always online. NFT can serve as an important infrastructure of the Metaverse, capable of mapping virtual items and becoming the main carrier of native assets in the Metaverse.

In March of this year, because the game company Roblox wrote in its IPO prospectus that "Metaverse (Metaverse) is being realized", in the next six months, the game industry ushered in the Metaverse boom. According to the Financial Associated Press, in the first half of 2021, NFT blockchain games have raised US$1.4 billion in financing, and the number of daily active users of the NFT blockchain game Axie Infinity is as high as 250,000.

Some participants who have nothing to do with blockchain are also getting involved in the NFT game. On August 4, French fashion giant Louis Vuitton announced the launch of its own NFT mobile game; in July, Coca-Cola has released an NFT virtual device that can be worn on the decentralized virtual reality platform Decentraland.

William Quigley, the former co-founder of USDT issuer Tether, said in an interview in July: “NFTs, as a unique form of entertainment, will coexist with movies, music and video games. All cannot All consumer goods will become NFT.

Supporters regard NFT as part of their faith, but there are also many people who are cautious or even negative about the development of NFT.

Speculation is NFT. The most obvious chaos in the craze. The rising prices of NFTs have made more and more outsiders jealous, and many new players are eager to enter the market. Many voices compare NFTs with the "air currency glut" in previous years. As an analogy, at that time, exchanges at the top of the food chain did not strictly review air coins, resulting in a large number of air coins. As a result, exchanges were questioned for wantonly "harvesting" project parties and investors.

NFT Will it follow in the footsteps of air coins? There is no answer yet. Although many celebrities support NFT, the voice of questioning NFT is difficult to ignore.

Fred Ehrsam, the founder of Coinbase, said earlier. 90% of NFTs produced may lose value in the next 3 to 5 years and become almost worthless. This is the same situation as the early Internet companies in the late 1990s. "The artist Beeple, whose works were auctioned for high prices earlier, also said in an interview with CNN's "First Move" that NFT being sold for $69.35 million is "crazy."

Litecoin founder Charlie Lee He also believes that only a few NFTs have extremely high value, such as works created by well-known artists such as Picasso. However, “since the cost of creating NFTs is almost zero, if artists flock to this field in order to make a profit, then the market will Overwhelmed by the frenzy, supply will overwhelm demand and prices will eventually collapse. ”

Regulation is another pressure that NFT may face. The cautious attitude of major domestic manufacturers in promoting NFT reflects their emphasis on compliance. Alibaba and Tencent have repeatedly emphasized the scope and scope of their deployment in the NFT field. Boundaries.

In response to the misunderstanding of whether NFT is equivalent to issuing tokens, Ant Chain has made it clear that NFT is not a virtual currency. “NFT is an effective and reliable technology to resolve the issue of digital artworks. The means is unique and indivisible, does not have the characteristics of equivalent exchange items, and is essentially different from virtual currencies such as Bitcoin. "

In an online roundtable forum held by Tencent Research Institute, Qin Qing, director of Tencent Cloud Blockchain Products, also said that issuance of NFT on the alliance chain can truly remove the attributes of currency, "We It is inferred that the NFT issued by the alliance chain can be issued in compliance with regulations. ”

NFT is complex. Although it is a better way to protect copyright, it also has potential hype attributes, and it is inevitable to face supervision during the domestic development process. How can the development of NFT maximize its strengths and avoid its weaknesses? , all Chinese participants need to explore the appropriate development path for NFT.