Economic Information Daily: NFT rides the Metaverse, develops rapidly, beware of speculation

At the beginning of the new year, the popularity of NFTs (non-fungible tokens) continues unabated. With the entry of domestic and foreign stars, artists, and some Internet "big companies", NFT has become a "dignitary" in the investment field for a while.

There is no doubt that NFTs diversify the way in which the value of artwork is presented. From the perspective of technology neutrality, NFT can connect real world assets and digital world assets, and will become a new carrier of industrial blockchain. However, it should be noted that NFTs relying on blockchain technology have also been distorted and used for speculation.

Experts call for the introduction of relevant policies as soon as possible. While preventing risks, it is more important to guide the healthy development of NFTs under the correct technical path within a relatively reasonable framework.

Artwork takes on digital expression

The streetwear brand founded by Jay Chou and his friends recently announced the sale of the NFT project Fantasy Bear, limited to 10,000 pieces, priced at 0.26 Ethereum, all sold in less than an hour, with a total price of more than 62 million yuan. Not long after, the price of Fantasy Bear NFT skyrocketed, and the lowest price once rose more than 25 times, which was staggering.

With the entry of domestic and foreign stars, artists, and some Internet "big companies", NFT has become a "nobleman" in the recent investment field. However, what exactly is an NFT?

According to industry insiders, NFT is the abbreviation of Non-Fungible Tokens in English, which means non-fungible tokens, that is, non-fungible tokens. Tokens are products that are attached to the blockchain and use smart contracts to record the ledger. The well-known Bitcoin and Dogecoin are homogenized tokens, and there is no difference between each one of the same type. NFT is a special case, each of which can be different, just like a fingerprint, so it has the so-called scarcity.

"From the perspective of technology neutrality, NFT can become a 'value machine' that empowers all things, a bridge connecting real world assets and digital world assets, and NFT will become a new carrier of industrial blockchain." China Mobile Communications Federation Metaverse Yu Jianing, executive director of the Industry Committee, believes that if this technology is used properly, it can solve many problems in the real world.

NFT provides a more convenient way to confirm the value of artworks. NFT is registered on the open blockchain ledger, and the entire circulation process of a piece of art can be recorded in it, making it very simple to trace the source and verify the authenticity. At the same time, NFT diversifies the way the value of artwork is presented, so that creators can get more benefits. Creators can directly attract consumers and make profits through NFT, no longer need to sell through the platform as an intermediary, and the platform will participate in the share.

Linkin Park co-leader Mike Shinoda auctions off a piece of music he made as an NFT; NFT game NBA Top Shot sells NBA-themed digital collectible cards, turning stunning moments from NBA games into digital collectibles you will own forever Artifacts... There seems to be no art form that cannot be released in NFT form.

NFTs can be anchored to any commodity in the real world, which is especially suitable for the uniqueness of artworks. With its empowerment, the forms of valuable works of art are richer and more diverse. Art is not limited to a static traditional work, it can even be a famous social platform message, and many things that seem "weird" can be sold. Twitter CEO Jack Dorsey's first tweet "Just set up my Twitter" was minted into NFT and publicly auctioned.

Beware of speculation and hype leading to new technology development

Technology is innocent. Although it belongs to the "compatriots of the same mother" with virtual currency, there is no "original sin" in NFTs. The real evil lies in distorting the behavior of speculative speculation using the characteristics of NFTs.

Looking for the source of NFT, a widely accepted statement in the industry is that its birth is based on a pixel avatar project called CryptoPunks in Ethereum in 2017. The total number of these pixel avatars is capped at 10,000, and no two characters can be the same. It didn’t take long for the blockchain game Crypto Cat to become popular. This is a “cat raising” game based on Ethereum, which is similar to an electronic pet in design. What makes Liu Peng, a former virtual currency investor, still fresh in his memory is that the enthusiasm for "raising cats" in the market at that time was crazy. Liu Peng said that each of these virtual pet cats is different, and buyers who own two or more can breed new cats, and the price of cultivating rare characteristics is more expensive. There have been virtual pet cats sold for millions of yuan. But as the gaming bubble burst, prices quickly fell, and the entire game gradually faded out of sight. Some of the current hot NFT projects will probably end up in the same way as the "cat raising" game.

The reporter's investigation found that a considerable number of NFT project issuers are not transparent, and the threshold for project issuance is extremely low. Even an Indonesian man made NFT issuance by "creating" his own selfie, and the "market value" was as high as nearly 4 million yuan. As for who is on the project side, where is the registration place, and what is the contact information, few investors seem to care. Once a large amount of money is collected, the project party may run away at any time, and the vast sea of people has nowhere to go. In addition, many NFT projects need to use virtual currency to participate. Under the existing domestic policy framework, there is a high probability of touching the "high voltage line" and being deceived.

It is worth noting that NFT hype has taken the Metaverse Express and played new tricks. In some illusory scenes created by the metaverse, virtual land, houses, etc. have become so-called scarce resources. They are marked as NFTs, hyped to be unique, and cater to speculation. The data shows that some of the more mainstream metaverse projects have grossed as much as $106 million in sales on virtual land. The price of a piece of virtual land was recently fired at $4.3 million, constantly refreshing people's perceptions.

When metaverse concepts, standards, etc. are not yet clear, such hype is somewhat irrational. "The Metaverse was the earliest sensation in my country's capital circle, and the reason for the concept's popularity is the 'wealth effect'." said Xing Jie, the author of "Metaverse Token". Metaverse platforms are constantly emerging, and they are bound to undergo a process of shuffling.