If the development of blockchain in the past few years is not well-known, then the NFT that has attracted much attention recently has attracted the attention of the public, and the word "blockchain" has finally appeared again in major The media ranks, of course, this time not because of Bitcoin, but these three weird letters - NFT.
As early as half a month ago, the world-renowned auction house Christie's (CHRISTIE'S) sold a sky-high price work called "Every Day: The First 5000 Days", and this painting is from the NFT work of the well-known digital artist Beeple. It was sold at a price of approximately RMB 450 million, which also made the artist Beeple one of the three most expensive living artists after David Hockney and Jeff Koons.
This "Every Day: The First 5000 Days" was generated by Beeple by combining the painting photos it posted on the Internet every day from May 1, 2007, and combining them in the form of NFT after filling up 5000 pictures, which means that these Paintings are not works that are within reach in reality, but paintings that only exist in the digital world.
The transaction of Beeple's sky-high NFT work was immediately listed on the homepages of major media, and at the same time, it also led a group of artists to enter the NFT world. This time, the word "blockchain" is completely "" After all, if you don't understand what NFT is, most people can't understand the mystery, and even those who buy NFT works will be called "fools".
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1. Getting to know NFT for the first time
With the outbreak of the third industrial revolution, mankind has entered the era of science and technology, and some emerging technologies and industrial revolutions have become forces that change the world. With the rapid development of the blockchain, it seems that it is only a matter of time before NFT appears in the public eye.
More and more people are betting on this. Twitter CEO Dorsey’s first tweet was sold as an NFT for a sky-high price of 2.5 million US dollars. AC Milan joined Sorare, the Ethereum digital football NFT collection platform, not to mention the popularity The global NBA Top Shot, NFT has exploded out of the circle with an unstoppable attitude.
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1. Definition of NFT
The full English name of NFT is Non-Fungible Token, that is, non-homogeneous token, which has the characteristics of non-tamperable, indivisible, irreplaceable and unique.
Before explaining NFT, let's first review what is a homogeneous token Fungible Token. The concept of FT came into being with the emergence of the blockchain. All tokens are attached to the existing blockchain, using smart The contract is recorded. The familiar Bitcoin, Ethereum, Polkadot, etc. are all homogeneous tokens, which can replace each other and be split.
To give a simple example, if a person has 10 bitcoins, there is no difference between these 10 bitcoins, and these bitcoins are Fungible Tokens (homogeneous tokens). After a bitcoin is numbered, we cannot say that the No. 2 bitcoin is the No. 1 bitcoin, and the numbered bitcoin is an NFT, as if there will not be two RMB with the same number in the world, nor will there be two Exactly the same NFT.
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2. The origin of NFT
The emergence of NFT is not a coincidence. In recent years, artists and related markets have gradually fallen into a dilemma. With the advent of the digital age, piracy can be completed with a camera button or double-clicking the mouse when copying. How to protect the interests of artists, Copyright protection has always been an issue actively explored by the art market.
Because of the decentralized, non-tamperable, secure and privacy-protecting features of the blockchain, as early as 2013, some encryption artists created through Bitcoin transaction scripts and tried it in the form of ASCII character paintings. However, limited by the number of script bytes, its application is not favored.
Things continued until 2017, when the Ethereum token standard ERC721 began to enter the community discussion, making it possible for NFT to become popular today. The token standard ERC721 makes each token correspond to a unique item, allowing its works to be given a unique identifier on the blockchain, and also giving NFT unique characteristics.
The earliest application of this standard was a pixel avatar project called CryptoPunks developed by Larva Labs. The total number of these pixel avatars is limited to 10,000, and people with Ethereum wallets can claim them by themselves.
Unexpectedly, 6 months later, the small game Cryptokitties developed by Dapper Labs quickly became popular and detonated the NFT market.
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2. The current hot business model of NFT and the reasons for its popularity
The development of NFT has experienced several ups and downs. In the five years since 2017, different project parties have actively explored it in many aspects and achieved certain achievements. With the iteration of technology, the multi-token standard ERC1155 that supports FT and NFT at the same time also brings the possibility of the prosperity of NFT.
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1. NFT+ art auction
There is no doubt that the recent frequent outings of NFTs are inseparable from sky-high auctions. In the previous article, we mentioned Beeple's NFT works, Dorsey's first tweet and so on.
In fact, as early as the beginning of 2018, encrypted art exhibitors SuperRare and KnownOrigin started to help artists distribute and promote their works on-chain, while OpenSea, one of the world's largest NFT trading platforms, provided an auction platform for artworks.
Sky-high auctions are derived from their scarcity. NFT enables digital artworks to have a unique ID on the chain, making digital works traceable and confirming their rights, ensuring the scarcity of digital artworks. At the same time, the separation of control and editing rights is carried out, and artists can retain the right to modify the work and obtain permanent equity in the work.
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2. NFT+ sports card
Officially licensed by the NBA, NBA Top Shot, a video-based virtual basketball trading card built on the Flow blockchain, has generated $200 million worth of sales in the last month, with more than two-thirds of the transactions in the past month , in which famous star LeBron's highlights in the 2019 Western Conference Finals set an all-time transaction record of $208,000.
The emergence of NFT of sports cards stems from the huge market of fans. Fans collect NBA "moments" just like collecting NBA star cards, and they thrive under the influence of sports superstars.
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3. NFT+ blind box
In recent years, blind boxes have attracted the attention of many people because they are both artistic and exploratory, and have become a new way of decompression and collections. Opening a blind box is like choosing a new candy from a chocolate box. You can never be sure what the next piece will be. This uncertainty makes people feel more satisfied after getting a more satisfactory product.
Created by more than 70 artists around the world, Hashmasks, an NFT digital identity blind box project with a total supply of 16,384 pieces, was sold out within 5 days of its launch. Created a transaction volume of more than 14.34 million US dollars, once ranked first in the OpenSea platform data. After purchasing Hashmasks, users can name them, increasing the scarcity of Hashmasks and making them a digital identity portrait of users.
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4. NFT+ games
As the first field to try NFT, games have made many attempts with its in-depth development. At present, it has made in-depth development in virtual worlds, online games, collection games and card games.
Gods Unchained, one of the hottest blockchain-based NFT games recently, has the same style as Hearthstone. However, unlike Hearthstone, players have the ownership of cards and can trade them freely. This is a fanatic hobby for related games. Provides a better gaming experience.
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5. NFT trading platform
The mainstream trading markets for NFT include OpenSea, Rarible, Nifty Gateway, MakersPlace, Super Rare, VIV3, etc.
OpenSea compares itself to eBay in the NFT world, and is currently one of the largest NFT trading platforms in the world. On this platform, users can buy most of the current mainstream NFT products, including Axies, CryptoKitties, ENS domain names, etc., many of which are NFT Art auctions are also conducted on it.
Similar to OpenSea, Rarible operates in a completely decentralized manner through RARI governance, the native governance token that users get when selling or buying NFTs.
Nifty Gateway is a regulated NFT platform. Users can directly purchase NFT with a credit card, and when selling, they can directly convert the benefits into US dollars and distribute them to personal bank accounts.
MakersPlace is dedicated to generating blockchain fingerprints for each work of artists and creators, and is one of the currently active digital art marketplaces.
Known as a digital art marketplace with a global network of digital artists, Super Rare provides new sources of income for artists and a place for collectors to store and trade art assets.
As this year's rookie, VIV3 is the first comprehensive market on the Flow public chain, which can be directly integrated with artists' smart contracts, which is a brand new experience.
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6. NFT+ other business models
In addition to the business models mentioned above, NFT can also be combined with related fields such as identity authentication, music, finance and insurance, intellectual property, and ticketing.
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3. Why is it said that NFT will be the next trillion market
First of all, let's take a look at the market size of several popular business models combined with NFT in the traditional field.
In the "2021 Art Market Report" written by economist Clare McAndrew (Clare McAndrew), the art market will shrink by 22% in 2020 due to the impact of the epidemic, from 64.4 billion US dollars in sales in 2019 to 501 in 2020. One hundred million U.S. dollars.
According to Newzoo's 2020 Global Game Market Report, the global game market revenue will reach US$174.9 billion in 2020, and the total number of players will reach 2.68 billion in 2020. By 2023, these figures will become $217.9 billion and $3.05 billion, respectively. The revenue forecast of console games in 2020 is US$51.2 billion, a year-on-year increase of 21.0%, more than twice Newzoo's previous forecast.
The combined market size of the two has exceeded one trillion yuan. However, such a calculation method seems simple and crude, but it is difficult to accept. So what is the actual situation of NFT now?
According to the industry report of Dapp Radar in February, the transaction volume of the NFT market has exceeded 340 million U.S. dollars, setting a historical record, of which NBA Top Shot occupies the largest share, with a transaction volume of more than 225 million U.S. dollars.
At first glance, compared with the above data, it seems far away. It is a bit of a joke to say that NFT is a trillion-dollar market, but it is worth noting that the current number of users of the global NFT platform is only less than 400,000, contributing 3.4 100 million USD market, with a per capita consumption of USD 850, far exceeding the USD 65 per capita consumption in the traditional game market.
image description(Google searches for the term "NFT" are at an all-time high)
So, why NFT can bring such great empowerment, thanks to the changes that some characteristics of NFT itself may bring to the business world.
First, the NFTization of the traditional business model can greatly reduce the transaction threshold and attract more people and funds to participate. For example, in traditional art auctions, only a small number of people can participate, and the threshold for participation will be very high. On the other hand, the result of NFT+ artwork is that anyone in the world can participate in the auction of NFT artwork, and more bids can boost the auction price to a new high. At the same time, NFT is not limited to master-level works, anyone can Turn your own works into NFT and auction them. Although they are not as good as master works, this will not only bring a large number of auction targets to the entire market, but also provide a lot of small auction markets. Can become a dragon.
Second, NFT can capitalize virtual items that could not be realized before, and bring a huge market-the virtual item trading market. To give a simple example, gold coins and items in online games can only be traded in the in-game market, and they can hardly be changed into cash. But if it is an NFT game, the virtual assets obtained, such as equipment or gold coins in the game, can be cashed in. This will be a very huge market, which is equivalent to adding a huge expansion to the game’s revenue method. market.
Third, combining with offline entities can quickly realize the influence. The popularity of NBA Top Shot is a manifestation of the realization of NBA's official influence. An officially authorized digital asset can be naturally constructed due to some mechanisms, such as the opening card package mechanism (similar to blind boxes, and the probability of rare cards is lower). Scarce assets, coupled with an open trading platform behind which anyone in the world can participate, can make the price of scarce assets magnified to a very high number. Not only companies, but also individuals can quickly realize their influence. The encryption artist Beeple mentioned above is a living example. After all, the total amount of his works has sold more than 100 million US dollars.
The above are just some of the salient features of the current NFT, but the existing NFT business model is still in its early stages, and there are even voices saying that "everything can be NFT" in the future. If it is really realized, it will surely open up more markets. At that time, the market estimate of NFT may not only be a trillion-level market.
