In recent years, driven by digital technologies such as big data, cloud computing , the Internet of Things, and blockchain, various digital products have emerged in endlessly and dazzlingly. NFT (digital collections) is one of the typical representatives. Simply put, NFT is a digital proof of rights encrypted by blockchain technology , which is embodied in digital images, skins, props, music, etc.
Original text: "Pay Attention to the Risks of Hype of Digital Artworks"
Author | Hu Xiaopeng, Institute of World Economics, Shanghai Academy of Social Sciences
Pictures | Network
NFT first originated in 1993 In the year, an American computer programmer (also Cryptozoologist Hal Fenney used a random arrangement of one-way functions and digital signatures to get a unique string of random passwords. This is the "encrypted replacement card", which is also recognized by the industry as the prototype of NFT collectibles and triggered It has been collected by crypto enthusiasts all over the world. Driven by the innovation of digital technology, NFT has experienced the evolution of product forms such as "Rainbow Coin" and "Sad Frog", and finally the first batch of NFT works-"CryptoPunks" was born in 2017. Because these digital images are placed on the blockchain, they become personal encrypted digital assets.
From 2018 to 2020, NFT has entered the construction period, and the NFT ecosystem continues to move forward. In 2021, the NFT industry has entered a period of rapid expansion, with transaction volume and transaction volume increasing rapidly. Since entering 2022, the performance of NFT has been unsatisfactory, with both transaction volume and price falling sharply compared to before.
Data from the market analysis platform NonFungible shows that since 2022, the average selling price of NFT has dropped from the highest of US$6,889 on January 2 to US$1,263 on February 28. The activity of the entire NFT market has also continued to decline, falling by more than 90% from last year's high. At the product level, the value of the world’s first tweet NFT plummeted 99.9%. At the same time, an NFT called "Doggy #4292" (a photo of a green-skinned astronaut standing on the Hollywood Walk of Fame) was originally sold for $32,000, but there were almost no bidders in the new auction.
Compared with the foreign NFT market situation, there has been a wave of pursuit of NFT artworks in China since 2011. Until now, there are three large-scale NFT trading platforms in China, namely Alibaba Ant Chain, Tencent Zhixin Chain and NFT China. These platforms sell NFT digital artworks, and prices are skyrocketing. For example, the "Thirteen Invitations" NFT digital artwork sold by Tencent had a unit price of only 18 yuan, but the auction price soon rose to 100,000-200,000 yuan, of which the price of the special limited edition NFT rose to 260,000 yuan. Yuan.
Although China's NFT art transactions are still on the rise, and although the author never denies the high-risk nature of new things, the "roller coaster" dramatic changes in foreign NFT volume and price give us a warning that we must seriously consider the development of NFT art. Economic attributes and risk issues. In the author’s opinion, NFT digital artwork has nothing to do with the copyright of the original work. It is only a digital proof of rights and interests of the original work. Whether NFT has economic value and the level of this value completely depends on the degree of market recognition.
In an economic sense, NFT digital artwork will derive two effects: distribution and innovation . The so-called distribution effect refers specifically to the fact that the economic benefits created by NFT will form a new interest distribution relationship among multiple entities such as the original art creator, the digital platform, the original NFT buyer, and the market secondary transaction buyer. But what is known so far is that the dominant player in this chain is not the artistic creator. The so-called innovation effect means that after NFT can be monetized, major platforms will continue to increase the intensity of digitizing artworks, and art creators will also carry out artistic creation driven by profits. Regrettably, many NFTs are currently not innovative and artistic, and some are suspected of copyright infringement.In fact, behind the excessive popularity of NFT, the vast majority of people's recognition of it is not due to art, but to the rewards that it may bring greater benefits. Under such circumstances, NFT is just a tool for financial speculation, and it does not matter whether it is related to art.
In order to prevent the hype of NFT and the risk of financialization, all major platforms have issued statements restricting secondary market transactions. For example, Ant Group publicly stated that "the NFT business has 'three don'ts' and resolutely opposes all forms of speculation." However, such a statement cannot prevent market speculation. The author searched for the NFT digital works service description and NFT-related terms in the Alipay "Ant Chain Fan Granule User Service Agreement" and found the terms involving NFT transfer. Although re-gifting is not a transaction, if a consumer purchases NFT digital art from the Ant platform, he or she can communicate privately with other consumers and reach a private transaction contract on other platforms, and then formally trade on other platforms, and finally go through Ant The chain platform completed the transfer. It is obvious that this wave of operations has given NFT digital artwork a secondary transaction function. Although it is a bit troublesome, the strong profit-seeking motive is enough to drive the generalization of this kind of transaction. In addition, according to the author's observation, many NFT holders have several NFT WeChat trading groups. They rush to buy the first NFT digital art just to make money. No one will hold it for a long time.
Of course, in the face of new things on the Internet, we cannot hold back because of risks and stifle the motivation for innovation in new business models with the excuse of avoiding risks. NFT can indeed create huge wealth, but the digital dream transformed from the association of wealth cannot escape the curse of human greed. If the popularity of NFT is accompanied by getting something for nothing and low-quality innovation, then how can digitalization empower the real economy? The article
is an original product of Social Science Journal’s “Thought Workshop” Fusion Media. It was originally published on Page 4 of Issue 1812 of Social Science Journal. Reprinting without permission is prohibited. The content in the article only represents the author’s opinion and does not represent the position of this newspaper.
Extended reading
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