An article to understand the deep nature, operation principle and development trend of NFT

In March, the post-80s Internet artist Beeple's work "Every Day: The First Five Thousand Days" was sold as an NFT by Christie's, a famous art auction house, and sold for a sky-high price of US$69.3 million. Since then, NFT has become a hot spot in the blockchain field all over the world. Because of the characteristics of breaking the circle of NFT, it has even caused a huge sensation in many fields such as art, venture capital, and finance. Is NFT an outlet or a bubble? What changes will the NBA, Samsung, McDonald's, Marvel, and Binance enter the game one after another? Is it really "everything can be NFT"? What are the problems and risks of NFT now, and what will happen in the future? What is the essence and operating principle of NFT? Recently, Jinse Finance interviewed Gao Zelong, deputy secretary-general of the China Mobile Communications Federation Blockchain Special Committee and author of "Blockchain Thinking" by Beijing University of Posts and Telecommunications Press, about some deep-seated issues of NFT. Let him talk about NFT The essence, principles and trends point out the future direction of NFT. Golden Finance: NFT is so hot now, do you feel normal? Gao Zelong: As a phenomenon, this is quite normal. After some iconic events detonate, naturally many people around the world will follow suit and imitate. I have been engaged in the Internet since 2003, such as Weibo, blogs, group buying, etc. have experienced similar phenomena. After the GroupOn model became popular in the United States, thousands of regiments and tens of thousands of regiments were staged in China, which is very normal. NFT is now extremely hot in China, and it is similar. Jinse Finance: A GIF animation or JPG picture has been fired for hundreds of thousands of dollars. You can often see reports like this. Are NFT works really valuable? Gao Zelong: This question is actually asked by everyone. The image of Rainbow Cat may be used by hundreds of thousands of people for free, but it seems incredible why the corresponding NFT can be sold for nearly 600,000 US dollars. However, in another way of thinking, the author designated an NFT as the "only genuine" version of his image, which instead created scarcity and made it valuable for collection. In addition, people are now used to paying - even for a virtual thing, we pay for the QQ show, game props, VIP advertising account of the video website, etc. we buy. Now many post-90s and post-00s will buy their own virtual portraits, which make it natural for people to buy NFT. Kaiko launched market data products to track Aave, Compound, and MakerDAO: Jinse Finance reported that encrypted data provider Kaiko launched market data products to track DeFi lending agreements Aave, Compound, and MakerDAO. According to Kaiko data, these agreements currently hold about $15 billion, accounting for more than 78% of the total global liquidity locked in lending agreements. Kaiko's new product will track borrowing, deposit, repayment, withdrawal and liquidation, which can be used to monitor the lending market, optimize trading strategies, analyze earnings and track wallet movements, etc. Philippe Redaelli, managing director of market data at Kaiko, said that the collapse of FTX has led to an increase in the use of DeFi protocols, which are needed now more than ever because of the transparency and financial opportunities offered by DeFi protocols. (the block) [2022/11/29 21:10:08] In January, the daily turnover of NBA TOP SHOT reached 1 million US dollars, and these transactions are videos that can be seen everywhere, which shows that NFT is a real In the existing market, users will be willing to pay for beliefs, emotions, and relationships, even for virtual things. Also, people who buy these NFT digital artworks can often make a profit. The media reported that an Australian named Daniel Megard said that he had spent millions of dollars to buy NFT artworks. Megard did not buy these works just to collect them, but to sell them at a high price after waiting for the value of the works to increase. Those who bought Beeple's works in the early days are believed to have made a lot of money. Jinse Finance: I heard that you have a relatively deep understanding of concepts such as the rights and value of NFT, can you share it with everyone. Gao Zelong: Words such as rights and value are difficult to define and describe, so Baidu Encyclopedia lists no less than five viewpoints on the entry of "value". There is a sentence in Marx's "Das Kapital"-use value is the relationship between people and things, and value is the relationship between people! Former Chanel European Marketing Director Frederica Tompkins will serve as OKX Global Marketing Director: According to official news, on August 11, Seychelles time, OKX announced the appointment of two female executives, Frederica Tompkins as Global Marketing Director, Kim Murphy as Global Marketing Director Event Director. It is understood that Frederica Tompkins has rich experience in luxury goods and fast-moving consumer goods. She used to be Chanel's European market and customer insight director, serving well-known brands such as Ralph Lauren and Jimmy Choo. Also an active-zce member of "She-Fi", an educational initiative to bring more women into the new financial economy. The person in charge of human resources of OKX said that OKX has always been adhering to the principle of recruitment regardless of race and gender, and currently has about 40% female employees. Previously, the "Global Blockchain Talent Report" jointly launched by LinkedIn and Ouyi showed that the ratio of men to women in the blockchain field was 8:2. [2022/8/12 12:21:02] I think that with the development of science and technology, rights and values will undergo tremendous changes in the process of digitization, which people in the previous era could not understand at all. For example, the Internet promotes the birth of the sharing economy. When there is no Internet, we can only obtain the right to use the car if we own the ownership of the car. You can’t drive a stranger’s car. Now we can see shared cars, shared bicycles, etc. In fact, ownership and use rights are split. I think NFT is a kind of mapping right, which has mapping value. After a higher degree of informatization, new types of rights and values that we cannot imagine now may arise. I started in 2017, giving some speeches and sharing, often mentioning a point of view, the blockchain will realize the migration of human beings to the digital world on a larger scale. In the future, mapping rights or reality anchoring rights may have huge value. Rights may be split into ownership, use rights, income rights, mapping rights, etc., and values may include use value, relationship value, recognition value, mapping value, future value, etc. wait. Golden Finance: In theory, this may be the case. Can you give an example other than the blockchain to prove it. Gao Zelong: NFT is actually very similar to blind boxes and IP derivatives. Blind boxes have reached a market size of 30 to 40 billion per year in China. What is the use of blind boxes? They can’t be eaten, worn, or used, but many people will purchase. This shows that materiality and practicality are no longer important, and fun, virtuality, and spirituality may be more important than materiality in the future. In fact, people's expenditure on the Internet is less and less material and practical, this is the trend! Although NFT is useless, I believe that NFT will become a huge market. Ethereum has completed the Gray Glacier hard fork: June 30 news, according to data from ethernodes.org, the Ethereum mainnet has reached and exceeded the Gray Glacier hard fork activation block height of 15,050,000. 700,000 blocks (about 100 days) have been postponed. At present, 65.1% of the nodes in the entire network have updated their versions. [2022/6/30 1:42:45] Golden Finance: Virtuality and reality are discussed and appear in many sci-fi movies. You have been talking about virtuality. What other insights do you have? Gao Zelong: I often go out to talk about NFT recently, and I have become an NFT preacher. I often say something like "One day in the future, you bought a car in the game. Maybe this car really belongs to you in reality." "I believe this is achievable through NFT, and the real and virtual worlds may have a one-to-one correspondence in the future. How to achieve it? It is definitely not the Internet, nor is it the homogeneous TOKEN of the blockchain. It must be better realized with the NFT non-homogeneous TOKEN. It may also need to cooperate with the Internet of Things, the Internet, big data, cloud computing, artificial intelligence, etc. Many technologies can be realized, but NFT must be very critical to realize the key technology of one-to-one correspondence. Just like a scene in a sci-fi movie, a hundred years later, people may not even be able to distinguish between virtuality and reality, or the boundary between the two will gradually weaken or degenerate. I also have a point of view that human beings will become more and more distant from nature. A highly developed civilization will achieve a high degree of virtualization and digitization! We are increasingly reducing our dependence on the real world, and digital survival is also possible in the future. It is not difficult to understand, now we go to the cinema less and less, iQiyi, Youku can watch movies and TV from all over the world; we go to supermarkets and shopping malls less and less, open Jingdong Tmall to buy all over the world. In fact, this is the trend, we will be farther and farther away from reality, so in the future, virtual things will be more valuable! The floor price of Azuki broke through 34ETH, a record high: Jinse Finance reported that according to OpenSea data, the floor price of Azuki series NFT broke through 34ETH, and is currently 34.45ETH, a record high. [2022/4/3 14:01:46] Jinjin Finance: These sounds scary, but they are also logical. We talked a little far, back to the blockchain and NFT. What stage do you think NFT is in now, is this market real, or is it just a flash in the pan? Gao Zelong: I just talked about my in-depth thinking, analyzed the principle of the correspondence between the virtual world and reality, and described the future scene. This seems to have nothing to do with NFT, but it is actually very important. I think NFT is a real market, and this market is very, very large, tens of billions, hundreds of billions, or even trillions! Looking at the essence through the phenomenon, the operating foundation and logic of NFT exist objectively and can withstand scrutiny, so I am optimistic about NFT. NFT is not a pseudo-concept like the previous Moutai blockchain traceability. But this does not mean that the development of NFT will be smooth sailing, or it may burst just like the early Internet bubble. The NFT industry starting now may go through a bubble stage, and the last few companies may become technology giants like a thousand regiments, or they may undergo multiple adjustments (may include model adjustments, economic environment, laws and regulations, etc.), but I I think that in the end, there will be many giants in this market, and they will become huge technology giants in the future, just like Alibaba, Baidu and Tencent today. Golden Finance: Talk about NFT from the perspective of venture capital. Gao Zelong: I think that there will be a large number of NFT projects born in the future, and a large amount of funds will enter the market, including Sequoia Capital, IDG, China Cultural Investment, CICC, Poly, etc. will invest in this field. In the future, Baidu, Tencent, JD.com, Alibaba, etc. will deploy NFT battlefields. The opportunities and challenges brought by NFT are no less than the opportunities and challenges of the mobile Internet to the Internet. We can see how many companies with hundreds of billions and trillions of dollars have been born on the mobile Internet. Jinse Finance: NFT is now generally concentrated in the fields of games and art. What will happen in the future? The construction of digital renminbi consumption scenarios is in full bloom: According to news on November 12, "there are more than 3.5 million pilot scenarios, a total of 123 million personal wallets have been opened, and the transaction amount is about 56 billion yuan." transcript. A few days ago, a reporter from the China Securities Journal investigated multiple consumption scenarios in Shanghai and found that the digital renminbi has already flown into the homes of ordinary people along with various consumption scenarios, and various market participants are actively involved in "eating, housing, transportation, travel, shopping, entertainment, and health". " and other aspects to build digital renminbi usage scenarios to meet user consumption needs. Industry insiders said that with the continuous advancement of the digital renminbi pilot, the scope of the future pilot is expected to continue to expand, and the types of scenarios will be further enriched. At the same time, the digital renminbi ecology will be more complete, and the specialization and activity will be greatly improved. (China Securities Journal) [2021/11/12 6:47:56] Gao Zelong: I think NFT in the future will enter all walks of life, including identity documents, real estate cars, luxury goods, biological genes, bill contracts, etc. NFT may It will be the beginning of blockchain truly becoming a general-purpose technology. Recently, IBM's blockchain strategy has completely failed. IBM, as the initial evangelist of the blockchain, invested billions of dollars, but ended up sadly. To some extent, it is because the blockchain was used as an information system before. and the solution is not practical enough. However, in fact, NFT can be used in various identity management, bill management and other scenarios that require a unique identity and cannot be split-this may cover most of the information system and IT outsourcing market. From games, calligraphy and painting and other fields that are acceptable to the public, NFT may be widely used in large-scale commercial use in the future. NFT is now being discussed hotly, and it will become a common technology in the future because it is ubiquitous. Of course, future games, artwork, derivatives, etc. may be part of the NFT market for a long time. Jinse Finance: What NFT platforms do you know abroad, and what are their different models? Gao Zelong: OpenSea, GENIES, SuperRare, MakersPlace, etc. Models include: self-operated B2C, Tmall-like store B2C bazaar, C2C free trading market, etc., and may also include industry tool platforms and aggregation platforms. In the future, MCN institutions and broker models similar to Internet celebrity live broadcast may be derived. This ecological May include technical service providers, digital art dealers, MCN institutions, marketing and market makers, training institutions, etc. Golden Finance: You said that NFT is expected to become the biggest channel to break the blockchain circle. How do you understand this. Gao Zelong: Both NFT and DEFI are hot spots. NFT has broken the circle far more than DeFi. This is because the groups that DeFi reaches must be high-risk investors, while NFT can reach almost all "fan groups". Some fashion cards, some collectibles, and some entities are combined. It can actually bring a lot of traffic and funds outside the chain, and it can greatly promote NFT projects. Let me focus on why breaking the circle is important. Whether it’s Weibo, blog, WeChat, Michat, or Xiaomi mobile phone, it was originally used by people in the industry (IT communication and Internet practitioners, media editors, etc.), because I was early in the Internet, and I have used the beta version of these. After breaking the circle, the whole society and the whole people are using it, and it becomes infrastructure. The Internet was originally used by scientific researchers, and finally became the digital foundation of the entire human being. Weibo, 140 Chinese characters plus pictures, what's the point? But when many people and everyone use it, it will be interesting and become a part of our life.

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