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What is NFT?
NFT refers to Non-Fungible Token, but this will make it difficult to understand. For simple understanding, NFT can be simply understood as a unique encryption digital product. That is, unlike fungible token such as eth, ETH in different people’s wallet can be exchanged, and the value between them is the same, not the same token is unique, and each other has different values and attributes, which is not interchangeable.
The current NFT is mainly based on the digital content distributed on the blockchain, including collection, art, encrypted games, domain names, etc. It is closely related to social psychology culture in essence. In short, NFT is naturally scarce because it has unique properties. Like art, Van Gogh’s sunflower can have many copies, but only one real one, and NFT cannot.
How does NFT come into being?
The process of generating NFT is not complex in itself. For example, artists post their pictures, audio, and video to IPFs after they make their work, and then issue a token, which is contained in their metadata. It sounds like people’s social media releases are as simple as content, but they are essentially different. If it is sent to social media, it may be deleted or banned. And released to Ethereum, it can be permanently preserved and unique.
That is, NFT is essentially the token of digital content. Because of the unique characteristics of digital content, NFT is also unique. NFT only makes the uniqueness of digital content into tamper free and permanent existence through blockchain mode.
So the core value of NFT is not the NFT distribution itself, but the content it points to. If the content that NFT points to is not valuable, it will still be worthless after the NFT’s coat is added. This is also a point that we need to pay attention to in NFT.
The background of the rise of NFT
*Ownership
NFT is a digital work that can not be tampered with. It solves the problem of ownership. Previous digital works of art are difficult to solve this problem, and can be copied at will, while NFT cannot be tampered with. The level of imitation of real art can be very high, which needs experts to identify, and the identification cost is also very high. NFT’s digital artworks can not be tampered with and can solve the problem of authenticity.
As long as users have the private key of NFT token, they can fully own the NFT product. Unlike in traditional games, the props, equipment, and even the account itself run on a centralized server. Users do not have full ownership, nor can they guarantee their permanence. Of course, NFT also has higher requirements on custody. If the private key is lost accidentally, it cannot be retrieved.
In addition, compared with physical works, NFT has permanence. It exists on the blockchain and will not have the possibility of physical damage like NBA physical star cards.
*The survival foundation of NFT
At present, most people’s life and work are related to the network. Human beings have entered the era of digital survival. In particular, the younger generation are all indigenous to the Internet, which need not be repeated. The digital age means that it needs the value media and storage of the digital age, such as bitcoin, and also needs the collection of the digital age, which is the survival foundation of NFT.
The combination of ownership and digital era, although there is short-term speculation, short-term fluctuations, there are many projects fishing in troubled waters, but in the long run, NFT is a trend. This trend, like that of WiFi, will become the third largest product and market in the field of encryption.
What is the digital age? The digital age means that people feel very natural about holding digital goods. People don’t have a second’s hesitation about the value of digital goods. This means that digital art, digital game items and digital collections all have a foundation for survival. People now use mobile phones and computers in their work, which is basically digital survival. In addition, real assets are very expensive. In big cities such as Beijing, Shanghai, Guangzhou and Shenzhen, young people are less likely to buy houses only on their wages. When offline assets are too expensive, people turn to online assets. It’s common for young people to buy content in games. In the current game, these assets do not really belong to the user; it is possible for the game to stop or the account to be banned by the company. In the world of encryption, ownership is entirely owned by the owner.
This feature of the digital age means that bitcoin, Ethereum and NFT will be regarded as natural value assets. This is the background of the rise of NFT and the foundation of its survival.
*The value foundation of NFT
Humans like things that are scarce. It’s nature, because it’s necessary to show your uniqueness, to be cooler, to have more social status, and to gain more respect from people. At the same time, scarce things also have the function of value storage, which can also bring a certain sense of security. From art collections to gold to bitcoin, this has always been the case. Human history has never changed for thousands of years. The past is like this, today is like this, and the future will not change.
Some people like to buy luxury goods and spend hundreds of thousands on a bag. It wants to show the social status of the host, so that they can get a sense of the so-called “superiority”. Why is NFT valuable? It’s a programmable asset; it represents the collection of the digital age.
Scarcity itself is not only a unique meaning, it also has a meaning of value. For a certain human group, it has the scarcity of socio-cultural psychology. For example, the NBA top shot in James’ finals highlights, these in the NBA fans, are scarce value. It is the NBA star card in the digital era, which can not only be viewed dynamically, but also can not be tampered with, will not be damaged and fully owned. Among NBA fans, having a unique moment when Jordan or James won the championship is far more fulfilling than having a bag of hundreds of thousands. In different community groups, people have their own community definitions of what is unique and what is more NB. So anything with strong IP is worth paying attention to.
In addition, the non tamperability of encryption is also an important guarantee of NFT value. In the traditional entity art collection, if a piece of art is not proved, it is difficult to have resale value. These proofs include: title, year of production, artist’s name, materials used, serial number, signature date, artist’s signature, etc. In the physical world, the identification of authenticity requires a lot of cost, and the art carried by NFT does not have such concerns.
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