Author: Professor Michael Mai

A few days ago, a news broke out in the currency circle, financial circle, literary circle and collection circle-a digital collage was auctioned at a sky-high price of 69.3 million US dollars (about 45 million yuan), and NFT also entered the public's field of vision, which aroused many people's interest. This article sorts out and summarizes some important events and knowledge points related to NFT. I believe it can answer many questions about NFT. Students who want to know please continue reading.

NFT, whose full name is non-homogeneous token, is a digital encryption currency based on blockchain technology, such as Bitcoin (BTC) and Ethereum (ETH) which are familiar to everyone. However, NFT is different from cryptocurrencies such as BTC and ETH. There are two types of cryptocurrencies in the blockchain, namely coin and token. The former (such as BTC) has its own main chain and is based on the original "coin" of the public chain; The latter (such as NFT) is attached to the existing blockchain and uses smart contracts to record books, which is essentially a proof of rights and interests. Tokens can be divided into homogeneous tokens and non-homogeneous tokens (NFT).

Homogeneous tokens refer to tokens that can be substituted for each other and can be split nearly infinitely. For example, there is no difference between one bitcoin and another bitcoin, or two RMB with the same face value in the same version. A bitcoin can be subdivided into 8 decimal places, .1 bitcoins, that is, 1 cong. Non-homogeneous tokens have the following characteristics:

they are not interchangeable: one NFT is not equal to another NFT, and their values are different. There will not be two identical NFTs, and each NFT is unique.

indivisible: NFT cannot be divided into smaller denominations like bitcoin. They can only exist as a whole project.

Verifiability: The advantage of storing historical ownership data in the blockchain is that digital works of art and other items can be traced back to the original creator, which enables the works to be authenticated without third-party verification.

At present, the main application scenarios of NFT include games, digital assets, identity authentication, decentralized finance (DeFi) and souvenir collection.

games: NFT is very popular in the game industry because it solves some inherent problems. For example, some games prohibit the sale of rare features and accessories, such as weapons and skin. However, with NFT, these features can be easily transferred and used in different games. Therefore, NFT can help promote the development of game economy.

Digital assets: For example, Decentraland, a decentralized virtual reality platform based on the Ethereum blockchain, allows users to create, experience and monetize the contents and applications.

authentication: because of the uniqueness of NFT, it can be used as a proof to verify identity, including identity qualification, medical report, etc. Digital creators can also turn products into NFT for copyright marking to avoid being stolen and forged.

Decentralized Finance (DeFi): NFT has great application potential in the rapidly developing world of decentralized finance (defi). For example, they can be used to use art, real estate or other valuable assets as collateral for loans, or as financial contracts for insurance, stock options or bonds, and can be traded as products in the secondary market. Although NFT has been around for several years, it is probably the development of DeFi that makes it more attractive as a digital asset with a series of applications.

collecting souvenirs: NFT has brought new ways to the collection industry, and traditional professionals are now paying attention to digital assets. NFT is the same as other cryptocurrencies. The record of who owns what is stored in the * * * ledger of the blockchain. These records cannot be forged because ledger books are maintained by thousands of computers all over the world. Therefore, in addition to scarcity, NFT also adds a layer of security to the collected assets. NFT can also include smart contracts, which can provide artists with a share of future sales.

the value of NFT: as with all assets, the relationship between supply and demand is the key market factor driving the price. Due to the scarcity of NFT and the high demand of gamers, collectors and investors, there will always be people in the market who are willing to spend a lot of money on it. If an item is very popular, its value will go up. The less the quantity of the item, the more exclusive it is, and it is likely to promote its value.

traditional works of art, such as paintings, are valuable because they are unique. You can take a picture of a painting or buy a copy, but there is always only one original painting.

But digital files can be copied easily and endlessly. Virtual digital artwork has a rather embarrassing place. Because it can be a picture or a video, it may be downloaded, copied and shared for countless people to see. And for digital works of art, there seems to be no difference between the replica and the original, so how can we ensure its value and scarcity? What is the significance of people buying it?

NFT emerged. NFT is a "unique" asset in the digital world. With NFT, works of art can be "marked" and a digital ownership certificate can be created. Therefore, NFT can be regarded as the ownership certificate of virtual assets.

NFT is designed to provide something that cannot be copied: the ownership of the work (although artists can still retain the copyright and reproduction rights, just like physical works of art). From the point of view of physical art collection: anyone can buy Monet's prints. But only one person can own the original.

therefore, the significance of purchasing NFT works of art depends on its target audience, and there are mainly three kinds: artist, simple buyer and collector.

As an artist, he is probably interested in NFT works himself, and NFT can also provide artists with a way to sell their works, and NFT creators also have the opportunity to earn royalties when NFT works are sold or changed hands. And if the work is very popular, the creators, buyers and collectors will get benefits after the value expands.

For pure buyers or collectors, NFT can be a financial investment, an emotional purchase, a collection, or a way to make buyers feel more closely connected with NFT creators (such as artists or brands), representing a unique and scarce identity symbol.

in addition, some artists will let buyers enter the private channel of the chat platform, and only the NFT buyers of the artist can enter, thus forming a private exclusive club.

does anyone really spend millions of dollars on NFT art?

yes, and the price is more than several million dollars. Although it is not uncommon for artworks to sell at sky-high prices, some emoticons, such as GIF, pictures, videos and even a tweet, that anyone can easily view, download, take screenshots, share and forward online can also sell for tens of millions or even tens of millions of dollars, which really refreshes many people's cognition.

On February 19th, Nyan Cat's animated GIF, a flying rainbow kitten expression pack, was sold for more than 5, dollars.

subsequently, musician Grimes sold some of her digital art works for more than 6 million dollars.

Jack Dorsey, the founder of Twitter, also auctioned an NFT debut tweet for $2.5 million.

but even after the auction, the post will still be made public on Twitter. The buyer will receive a certificate signed and verified by Doce Digital, as well as the metadata of the original Twitter. These data will include information such as the release time and text content of Twitter.

the most shocking thing is the digital collage auctioned at Christie's on March 11th, which finally sold for $69.3 million. It is the most expensive NFT art in history, which is $15.3 million higher than Monet's painting Nymphéas in 214.

NFT artworks sold to sky-high prices

On March 11th, a mysterious buyer bought a digital collage for $69.3 million. This auction was called a historic moment in the art world, and it was also the third highest transaction price for the works of living artists. The art being auctioned is a digital collage created by the artist Mike Winkelmann, whose better known name is Beeple, which contains 5, digital illustrations from his Everydays series-Beeple has created a painting every day for the past 13 years.

it is worth noting that before October last year, Beeple rarely sold more than 1 dollars, but today's works can be sold at sky-high prices. As soon as this news came out, it immediately detonated the art collection circle and the financial technology circle. Pablo Rodriguez-Fraile, a collector, bought Beeple's works for $66,666.6 in November last year, and resold them for $6.6 million at the end of February this year, with a value of 1 times in just a few months.

Beeple is a digital artist and graphic designer. Because digital art can be copied infinitely, making his works worthless, he has been looking for a better way to sell his works. When a friend told him that there was a way to change this situation and mark his illustrations as unique and single works of art, Beeple listened and began to study NFT. Because of this, more and more artists flock to the NFT market, because they want to seek greater success outside the traditional art world.

There are many controversies about whether Beeple's sky-high work has the artistic value that matches its price. Apart from the NFT's own value, different people have different opinions on its artistic value, just like the saying in Art Story that "there is no such thing as art, only artists".

By the way, Beep's works have a rough and straightforward attraction, full of all kinds of absurd "wonders" and metaphors. Many famous politicians are the protagonists in his works (usually naked and with mutated robot bodies), and the images of classic cartoon characters such as Buzz Lightyear, Mickey Mouse and Pikachu in his works are also very shocking, which can be said to be "destroying childhood" for some people.

The explosion of sky-high NFT artworks has attracted more and more people to discuss or participate in it. According to the data of CryptoArt, an analysis platform focusing on the artistry of cryptocurrency, in the last month of 22, the total turnover of NFT-based artworks reached 8.2 million US dollars. Compared with the previous month's turnover of only $2.6 million, it is a significant increase. At present, the market value of the whole collection exceeds $13 billion. With the increasing market value and the deepening of people's understanding of NFT, people regard collectibles as simple hobbies and turn them into large-scale financial investment behaviors.

Many famous artists began to pay attention to NFT and use it in their works, indicating that NFT is entering the mainstream. Of course, some people think that these are all hype and gimmicks, and some puzzling "artistic expressions" have been derived. At the beginning of March, after an original work by the famous British street graffiti artist Banks was sold as NFT, the original work was burned by a group of people who claimed to be encrypted fans in the live broadcast.

"Burning paintings is also" burning money "

This work of art is called Morons, which was made in 26 and satirizes the sales record set by Van Gogh's Sunflower in 1987. The work reads:

"I can't believe you idiots would buy this kind of thing. (I can't believe you morons actually buy this shit.) "

" Idiot "was originally bought from Taglialatella Gallery in new york, but now this value is in the air.

"Banks' Morons"

Before burning artworks, encryption fans used blockchain technology to digitize their works on SuperFarm and saved them in digital form. One of them said that they chose Banks' work because he had shredded one of his works of art at the auction. They regard this burning event as an expression of art itself, and are creating this unique NFT to produce a new art form.

Ossian Ward, the author of The Way to Watch: How to Experience Contemporary Art, thinks that this is totally a stunt. He said, "You can say that everything is a work of art, but if you burn a Bank's work and then spend money on it, it is very low-level for me."

Everything can be NFT, so is NFT a bubble?

At present, a series of events about NFT must contain speculation, but the speculation shows signs of fading soon, because most of them are artificially priced. In addition, there are concerns about the existence of cleansing transactions.