Although Bitcoin and other digital currencies have risen and fallen sharply, they have become a resident hot topic in the financial circle. However, the currency circle really does not rely on Bitcoin.
Uniswap sold a pair of socks for US$160,000, Twitter founder’s five words sold for US$2.5 million, and crypto artist Beeple received a bid of US$9.75 million at Christie’s NFT auction...
Relying on the NFT, the blockchain, which is relatively unfamiliar to the general public, succeeded in getting out of the circle.
What is NFT? What does NFT have to do with blockchain and Bitcoin?
What is NFT?
The full name of NFT in English is Non-Fungible Token. Translated into Chinese, it means: non-homogeneous tokens, which are indivisible, irreplaceable, and unique.
On the blockchain, digital cryptocurrencies are divided into two categories: native coins and tokens. The former, such as the familiar Bitcoin and Ethereum, has its own main chain and uses transactions on the chain to maintain ledger data; tokens are attached to the existing blockchain and use smart contracts to record the ledger. Such as a token issued by attaching to Ethereum. Tokens can be divided into two types: homogenization and non-homogeneity.
Homogeneous tokens, namely FT (Fungible Token), can replace each other and can be close to infinitely split tokens. For example, there is no difference in essence between a Bitcoin in your hand and a Bitcoin in my hand. This is homogenization and homogenization.
Non-homogeneous tokens, namely NFTs, are unique and inseparable tokens, such as encrypted cats, tokenized digital tickets, etc. It is equivalent to a numbered renminbi. There will be no two renminbi with the same number in the world, nor will there be two exactly the same NFT.
Therefore, compared with FT, the key innovation of NFT is to provide a way to mark the ownership of native digital assets (that is, assets that exist in the digital world or originate in the digital world), and this ownership can exist in centralized services Or outside the centralized library.
The ownership of the NFT does not prevent others from inspecting it or reading it. NFT does not capture the information and hide it, but only captures the information and discovers the relationship and value of the information with all other information on the chain.
At the same time, due to its non-homogeneous and inseparable characteristics, NFT can be bound to some commodities in the real world. In other words, it is actually a digital asset issued on the blockchain. This asset can be game props, digital artwork, tickets, etc., and is unique and non-copyable. Since NFT has natural collection attributes and is convenient for trading, crypto artists can use NFT to create unique digital artworks.
How was NFT born?
The birth of NFT is based on a pixel avatar project called CryptoPunks in Ethereum in 2017. The total amount of these pixel avatars is capped at 10,000. No two characters can be the same. Anyone who owns an Ethereum wallet can receive it for free. Trade in the secondary market. Six months later, the small blockchain game Cryptokitties (fascinated with cats) quickly became popular. This is a game of smashing cats on Ethereum.
Cryptokitty is a virtual cat. Buyers who own two or more can breed new cats, and the price of breeding rare features will be more expensive.
This kind of virtual cat has experienced several rounds of skyrocketing and plummeting prices, and at the same time it has also made NFT known to more people.
The starting point for the design of Cryptokitty was to popularize the NFT gameplay. As a result, people opened a zoo on the Ethereum blockchain. Virtual rabbits and virtual dogs became popular one after another, and then there were virtual trees. Mining, buying cats, selling cats to earn coins to buy mining machines, and then mining, may be a brand new way of life in the virtual world. Don't underestimate the obsessed cats. The market generally believes that obsessed cats games are revolutionary for the proposal and practice of NFT-the value can not only be carried by cryptocurrency, but also can have another new and unique way of carrying.
How did NFT get out of the circle?
Many people started paying attention to NFT last week.
On March 6, Twitter CEO Jack Dorsey seemed to want to sell his first tweet published in 2006 as a non-homogeneous token NFT.
On the afternoon of March 6, Dorsey posted a link to the platform "Valuables". After the page opened, his first tweet in 2006, "just setting up my twttr" (just setting up my twttr) is now Auction above. The highest bid came from Sina Estavi, CEO of the digital currency trading company Bridge Oracle, who bid 2.5 million US dollars on the afternoon of March 7. Prior to this, NFT also attracted the attention of Catherine Wood, the queen of the bull market. She said that she was very excited about NFT.
In the American art circle, more and more mainstream artists have also tied their works to NFT.
Last month, Mike Shinoda, the founder and co-lead singer of the American band Lincoln Park, auctioned a piece of his own music as an NFT, and finally sold for 30,000 US dollars. Shinoda established a scholarship with the funds obtained from the auction to fund the financial Difficult art students. The NFT application has now entered the NBA, used to buy famous highlights from iconic basketball games, such as Lebron James's slam dunk.
What are the advantages of NFT?
When an artist wants to sell a work, they will create or "cast" an NFT, and it will be a requirement for the ownership of the work from then on.
NFTs are registered on an open blockchain ledger so that they can track ownership (or "source" as they call it in the real world), previous sales prices and the number of copies that exist. The security provided by blockchain technology means that it is almost impossible to sell fake tokens.
What are the advantages of artists and a large number of self-media people who started to contact and use NFT?
ARK wrote in a recent opinion sharing:
Today, to monetize digital content, content creators can upload it to Instagram, YouTube, TikTok, Spotify or other social media platforms. These centralized platforms then monetize the content through advertising or subscriptions, and pay a certain percentage of profits to content creators.
In contrast, digital creators can directly use NFTs to profit from their followers and sell unique digital content without intermediaries.
In other words, nowadays, if musicians want to release new songs, they must go through the record company, and a large part of the profit must be given to the record company; if they publish their works on the short video platform, they will eventually attract advertisements and subscriptions, but in the end The creators do not get all the profits, and the platform will definitely extract a large proportion of profits-the same situation also occurs in other art and creative fields.
However, from ARK's point of view, if NFTs become popular in the future, creators will not need to let the platform commission. How much money their works make on the blockchain is how much money is put into their pockets.
Will NFT have wider applications?
In addition to artistic creation, what other fields can NFT be used in?
There are many fields that can be applied.
First, it may be in the field of intellectual property. NFT can represent a painting, a song, a patent, a film, a photo, or other intellectual property rights. In this field, the NFT plays the role of the patent office: helping each unique thing to register the copyright and helping it to identify the patent.
Second, physical assets. Real estate such as houses and other physical assets can also be tokenized by NFT. It can be used in financial markets such as the circulation of assets.
Third, records and identification. NFT is unique, so it can also be used to verify identity and birth certificates, driver's licenses, academic certificates, etc. These can be safely stored in digital form to prevent abuse or tampering.
Fourth, financial papers. Various types of financial bills carry a large amount of information in the process of circulation and transactions. If combined with NFT, it can not only confirm rights, but also facilitate tracking. In addition, the future transactions of various NFT assets can themselves form a segmented financial market.
Finally, ticketing. Concert tickets, movie tickets, drama tickets, etc., can all be marked with NFT-tickets that look the same, but actually have different seat numbers, naturally NFT can also be used here. . All tickets are the same, but the seat numbers are different.
How to view the NFT boom?
Nowadays, those relatively mature exchanges that trade digital currencies such as Bitcoin have begun to start the "spring layout" and actively deploy NFTs.
At present, traditional centralized digital currency exchanges such as Binance, Kucoin, Huobi, OKEx, Matcha MXC, Bittrex, etc. have begun to participate in the deployment of NFT projects.
In fact, since most users are not yet familiar with on-chain operations, the threshold for trading NFT assets is relatively high.
In addition, the current NFT is mainly based on the Ethereum network for issuance, transaction and circulation, but the Ethereum network is congested and the handling fee is high, which restricts the further development of NFT. At present, the application field of NFT is still relatively single, concentrated in niche circles such as games, encrypted artworks, and card collections, and has not yet achieved large-scale application landing.
Lu Jun, a senior researcher at Huobi Research Institute, believes that NFT has the typical problems of early products in the crypto world, such as easy foaming.
However, Lu Jun also pointed out that time is the biggest enemy of bubbles. As the market develops and people become more aware of NFTs, it will become difficult to generate large bubbles. The issue of liquidity is similar. When people's expectations for the value of NFTs gradually become stable and the risk of holding NFTs decreases, more people will join the market to contribute to liquidity.