The incredible magic of NFT makes the whole world "crazy"

A JPEG picture was sold for US$69.34 million! ? $2.9 million to buy a tweet! ? Self-portrait created by humanoid robot Sophia sells for nearly $700,000! ? These commodities, which were not considered valuable in the past, broke the tradition and were auctioned at a high price. What made the whole world "crazy"! ?

NFT (Non-Fungible Token) is a non-homogeneous token, which is similar to Bitcoin's technology. The difference is that it is indivisible, irreplaceable and unique. In short, it uses a virtual token as a product Cryptographic "endorsement" of blockchain art.

Three years ago, the market value of the entire NFT did not exceed 42 million US dollars. Now, according to the latest report from NonFungible.com, the sales of NFT in the first quarter of 2021 exceeded 2 billion US dollars, and the total value of circulation has exceeded 2020. With its unique properties and wide application scenarios, it is exploding.

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What triggered the explosive growth of the NFT market?

There are speculations that this technology is becoming more and more mature. Since its birth in 2012 to 2019, its market value has been increasing year by year. Especially after the advent of CryptoKitties, more people realized the value of NFT. In the short history of the encryption world, from 2017 to 2020, there have been several waves of upsurges such as ICO, stable currency, and DeFi. As an extension of people's interest in DeFi, NFT has naturally received more attention.

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Source: Google Images

Another reason may be that under the high debt and serious deficit, the United States tried to eliminate domestic risks by printing money, which led to a greater concentration of global wealth, a large number of dollars pouring into the market, and the bubble after the skyrocketing cryptocurrency, It prompted investors to turn their attention to the NFT market.

Who is watching the NFT market?

“It attracts people who have built their own audience, maybe on social media, and sell the work to that audience,” says London-based artist Benjamin Gentilli. At the end of last year, he sold the NFT at Christie's auction house for nearly ten times the estimated price of $131,250. In the American art circle, more and more mainstream artists have also bound their works to NFT.

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In February of this year, Mike Shinoda, the founder and co-lead singer of the American band Linkin Park, auctioned a piece of music he produced as an NFT, which was finally sold for $30,000. The NFT app has also made its way to the NBA, being used to purchase famous highlights from iconic basketball games, such as Lebron James' slam dunk.

NFT provides a secure proof of ownership of digital items, which can protect the value of the buyer's goods, and the seller can obtain permanent income through auction transactions. Unlike the proceeds of traditional works of art being auctioned, NFTS can be coded to allow the original creator to earn a return on each token transaction, typically between 2.5% and 10% of the sale price.

Undoubtedly, the auction of Christie's auction house gave these digital artworks a kind of legitimacy. At the same time, driven by celebrities such as Musk, Twitter CEO Jack Dorsey, bull market queen Catherine Wood, and artist Beeple's high-priced encrypted paintings, NFT has become one of the most popular capital entrances in the first half of 2021.

In addition, a number of digital asset trading platforms, such as Binance, Huobi, MXC Matcha, etc., have begun to actively deploy NFT projects.

However, all prosperity is bound to be accompanied by bubbles, and NFT is no exception.

Are these so-called "scarce" works really commodities with high-value investment attributes? In fact, the “instigator” of the 400 million yuan auction that attracted global attention in March this year was one of the founders of the NFT fund. Most of the remaining more than 30 bidders are Generation Z who participated in the collection auction for the first time.

In fact, investing in alternative markets is more risky and less rewarding than investing in more mainstream markets such as stocks. The NFT market is largely speculative, and the probability of buying high-value assets at low prices is not high. In order to increase The market hype for returns is probably only a short-term benefit, and it is difficult to sustain repeated transactions.

Some people say that this will be another "tulip bubble".

For celebrities looking to expand their prestige earning potential, the true value of the auctioned items may not matter as much as being the one who cuts the leeks, not the one who gets snapped on the beach before the economic crisis hits. This may also be one of the reasons why Takashi Murakami temporarily withdrew the auction, and Musk announced in the middle of this month that he would stop buying cars with bitcoin.

The circulation of traditional artworks is not easy. When artworks have absolute scarcity, convenient trading and circulation mode, and creators can obtain higher profits, an unprecedented enthusiasm for artistic creation will also be generated. With the surge of digital art works, people are more and more aware of NFT, and the bubble will also become smaller. When people's expectations for the value of NFT gradually become stable, the risk of holding NFT will also decrease, and eventually develop into a benign The digital art commodity trading market, born in line with the aesthetics of the current generation Z, unique digital art masterpieces, has truly become a new blue ocean worthy of global investment.

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