I believe that one of the most popular applications in the blockchain field in 2021 will be NFT.In February alone, the total volume of NFT transactions reached USD340 million, exceeding the full year volume in 2020.
NFT Is So Hot!
People's lives become more and more digital with the development of science and technology.In fact, in the past few years, we have owned unique digital products such as game tokens, game props and other collections, all of which are uniquely marked and can be converted into NFT in essence.In fact, any unique digital "asset" can be labeled as NFT. In the current market boom, these NFT can obtain higher valuation in a short period of time, and the asset range is also comprehensive.
Recently, the interest in the market has been greatly stimulated by the boom in cryptocurrency and the high price of digital artworks sold through the NFT.Lebron James and other NBA players' game "highlight time" video NFT has created more than USD230 million of sales on the NBA Top Shot; the well-known music DJ Justin Blau's music collection has also released NFT and sold at Origin DShop for $USD 12 million; and more digital artist Beeple's NFT work "Everydays: The First 5,000Days was successfully sold at Christie's for $69 million 340 thousand.
It is undeniable that the launch of NFT has indeed solved the sole problem of digital targets to a certain extent, which is also one of the many problems existing on the current Internet.As everything becomes more digital, it is necessary for the digital world to replicate physical attributes such as uniqueness, scarcity and proof of ownership.The owner information of each NFT will be recorded in the public blockchain and can be easily verified by anyone.Artists and other producers not only have access to the global market through NFT, but also can retain the ownership of their works and even directly request for resale fees.Maybe in the future, the NFT can also be used as collateral for decentralized loans.
Is NFT Really As "popular" As Publicized By The Outside World? But We Must Be Alert!
However, we have to maintain a certain degree of vigilance against NFT when some media hype over NFT, even industry leaders such as Jack Dossi (Jack Dorsey), the founder of twitter, and Elon Musk, the founder of Tesla, actively promote the trend of NFT.
On the one hand, the NFT is essentially the only label on an asset, and the value of the NFT should not be increased simply by having a label.If a comparison has to be made, the NFT may be similar to the only bar code attached to a package in a courier service, with each package having a bar code, which is useful but does not have any impact on the value of the package itself.In essence, NFT is no different. They are like unique barcodes, but are decentralized and based on the blockchain.
On the other hand, because everyone can create unrestricted NFT tokens, and in the real world, artworks are not produced at "zero cost", which is the biggest difference from NFT.However, once the "zero cost" NFT finally floods the market, it will lead to more and more producers trying to profit from the boom, and the supply will overwhelm the demand, which will eventually lead to a price slump.
Moreover, the NFT value may in essence be completely separated from the digital goods they label, thereby undermining their original value.If an NFT marks a painting, after the NFT is sold, the original owner can actually change his painting, and all the "only NFT of new painting" can still get a free copy, then what is the value of the NFT sold in the past?In addition, although the intrinsic value of NFT is a kind of "proof of authenticity", the problem is that people can even create NFT for a "completely nonentity".If an artist has never created a painting, but has published a fictional NFT online, who can verify it?
Finally, from the perspective of energy use, both cryptocurrency and NFT transactions appear to be unsustainable. The energy consumption of a bitcoin transaction may be equivalent to the energy consumption of 700,000 credit cards; while a single NFT transaction involves multiple digital processes, from creation, purchase, sales and resale, each step requires a large amount of energy.
It is worth noting that along the way, the valuation of the NFT has experienced a traditional cycle of speculation and bubbles.If, by definition, the NFT is not even a real asset, the NFT does not provide any cash flow unless it is the creator.The only way to make money is to find other NFT buyers, which means that once the bubble bursts, you have to bear all the losses on your own.
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