It is becoming more and more difficult to tell who is the true label of NFT, art, game, blockchain, meta universe, currency circle, or hype?

This year is called the “first year” of NFT, but what exactly is NFT?

A 12-year-old kid made about 2.5 million yuan in a summer vacation by selling a series of pixel art. The co-founder of Twitter auctioned a tweet with only 5 words in the form of NTF, and the transaction price exceeded 2.9 million US dollars. Wan Jin”; the digital work “First 5000 Days” of encryption artist Beeple was sold for US$69 million on a single auction at Christie’s; Justin Sun in the B circle spent US$10.5 million to buy an avatar…

With NFT, a picture, a video, a painting, a song, and even an emoticon package can exponentially increase in value.

Including the continued hype of the meta universe concept this year, the market has also seen the business opportunities of NFT. In the opinion of some people in the industry, Metaverse provides more diversified application scenarios for NFT, and NFT will become an important tool for realizing digital assets and circulation transactions of virtual items.

The new nuggets in the currency circle have once again ignited the public’s literary enthusiasm. In fact, the earliest digital artwork created can be traced back to emoticons. On September 19, 1982, the professor of computer science at Carnegie Mellon University, Coster Falman, invented the two most widely used symbols since humans entered the information age: the smiley face and the crying face symbol. The famous little yellow face emoticon in the chat software now comes from the creativity of Professor Falman.

Now these two text emoji packs are being auctioned on the homepage of the world’s largest collections auction company-American Heritage Auction House. The current price has exceeded 350,000 US dollars. Because this set of text emoticons only has six characters per set, the price of each character is close to 60,000 US dollars.

It is not easy to create groundbreaking works, and NFT has become popular, and is increasing the value of a large number of ordinary digital artworks.

From the initial unintentional attempt, to the beginning of hype and bubbles in digital art, we have sorted out several pieces of NFT digital art and traced the development history of NFT to restore this gradual transformation of the carnival.

After reading this article, you will know:

1. How did NFT quickly become popular from an emoji package and join the meta-universe camp

2. What is the relationship between the currency circle, blockchain, meta universe, and NFT

3. What are the valuable things that can be precipitated behind the NFT carnival

01

CryptoPunks: an unintentional attempt

CryptoPunks is considered the earliest NFT project . This is a set of pixel style icons, there are 10,000 in total. The resulting punk has 5 types: aliens, zombies, apes, males, and females, with 87 different attributes (hairstyle, hair color, glasses, facial features, skin color, etc.) . Influenced by the London punk movement in the 1970s, most of the characters have flamboyant hairstyles.

The author claims that no two avatars are the same, and each can only be sold to one person.

In May of this year, nine of these works were auctioned for the first time at an offline auction house and finally sold for a total of more than 16 million U.S. dollars, causing a sensation.

In the Christie’s auction on September 28, the picture below was sold for HK$33.85 million (approximately RMB 28.76 million), far exceeding the estimated price of HK$6.8 million.

In addition to the auction house, in the world’s largest NFT trading platform opensea, CryptoPunks has also ranked first in the last 7 days of transactions.

The project was unsuccessful at first.

In 2017, John Watkinson and Matt Hall, the founders of Larva Labs, designed a program to automatically generate an avatar. It was originally intended to be used as a backup image for games or social software, but there was not much response . In order to enrich the diversity of avatars, they ran and adjusted the original program hundreds of times. Later, they tentatively uploaded the images to the currency circle. The uniqueness of the works began to attract the attention of collectors and gradually became famous.

Judging from the recent orders of opensea, each avatar now sells for about 100 ETH, which is equivalent to RMB 287,000.

As the first project to eat crabs, behind the sky-high price is more the collection value of the characteristic of “first”.

Not long ago, the domestic news related to this, “Punk Avatar Justin Sun” was on the hot search.

On August 31, 2021, Justin Sun bought a Tpunk NFT work for $10.5 million and set it as his WeChat and Twitter avatar.

Justin Sun is the one who spent 30 million to photograph Buffett’s lunch, and finally put the Buffett pigeons. This avatar, worth 10 million, has a size of 24*24 pixels. It can be said that this is a digital image containing only 576 pixels, and the price of each pixel is as high as more than 17,000 US dollars.

The Tpunk project is actually Justin Sun’s own company, the NFT project in the TRON ecosystem, similar to CryptoPunks, with a total of 10,000 and a punk style. Whether this high-profile purchase is an impact on the CryptoPunks pixel avatar moat is to promote its own business, there is a lot of speculation from all walks of life.

NFT is divided into two categories. CryptoPunks is the first item in the category of “non-reproducible NFT”, which is unintentional. Another type of “reproducible NFT”, the first project CryptoKitties also happened to start in the same year.

CryptoKitties sells NFTs of various cats. Each cat has a different color, size, and breed, and cats with different genders can be reproduced for the next generation and continue to be sold. This kind of gameplay is widely used in games in the later stage. The popular meta-universe game axie infinity is the most prominent. In the game, pets are the core. Each pet is an NFT, and its category, size, skill, etc. are different. Each time this reproducible NFT reproduces, the original owner will receive a royalties commission. As a result, a group of professional players who make money in the game have been spawned.

Although the beginning of digital art did not come from professional artists, the development of these projects opened up a new model and found a possible solution for copy and paste in the digital age.

02

the first 5000 days: digital artist enters the game

When it comes to NFT artworks, “the first 5000 days” cannot be avoided. It is currently the world’s highest price peak work.

The author’s name Beeple (Bi Poole) . According to the author’s statement, starting from May 1, 2007, a digital artwork was created and uploaded every day, and named “everydays”. Some of these works are his essays, and some are highly detailed works of art. As of January 7, 2021, for 13 and a half years, I lasted for a full 5,000 days, and finally collaged these 5,000 digital works together, named “the first 5000 days”, and completed this digital masterpiece .

On March 11, 2021, this painting was sold at Christie’s auction house at a price of 69.346 million U.S. dollars (approximately RMB 450 million) . This work is also the first purely digital art auctioned by Christie’s auction house in the form of NFT.

Unlike the above, the characteristic of this work lies in its artistry. Bipper put together works with similar themes and colors when combining them on the basis of chronological order. The left half of the whole work is brighter and the right half darker, with a strong personal artistic style.

This graphic designer and dynamic artist from South Carolina is known for his innovative and avant-garde works and is good at integrating pop culture, technology and current affairs into his creations. Bipper has over 1.8 million Instagram followers.

The professional value of an artist is the foundation of the sky-high price, and this combination of masterpieces is an added element to it. Moreover, this artist made his name in an NFT sale last year.

In October last year, he sold a 10-second video work-“Crossroad” (“Crossroad”) on the NFT trading platform Nifty Gateway for US$6.6 million , refreshing the transaction record at the time. In this work, a giant is lying on the ground, and there are people coming and going around, but no one stops, even if you look at it more.

This work is relatively abstract, and attracts many media to interpret the connotation behind it.

Bipper is just the most representative figure. Since 2017, the NFT transaction method has gradually been accepted by more and more artists, because its core value-copyright protection, is exactly what is lacking at the moment. The cost of copying a work in the digital age is very low, and sometimes a few seconds after the original is released, piracy can be seen. And NFT can easily help authors complete a completely unalterable copyright statement, that is, confirm the rights. This provides reliable evidence for the settlement of copyright disputes in the future.

This time, after Bipper’s work “the first 5000 days” was sold at a sky-high price, he made an unexpected move for the audience. He actually hit the iron while it was hot and cut the painting into 105 small pieces, and then registered another NFT work for each piece and auctioned them separately. As a result, every small piece was sold for a good price of more than 100,000 US dollars.

Although paintings are divided into completely different works, they are completely different NFTs, and there are no technical and legal issues in operation. Generally, practitioners will not re-sell works due to liability considerations. I don’t know how the buyer for the first $69.34 million of “the first 5000 days” feels.

In addition to the advantages of painting technology occupying the NFT art, if the object of the work has its own characteristics, then there will definitely be people who will follow it, just like the flow of celebrities.

03

NBA Top Shot: Traffic Monetization

This NBA-authorized NFT star card includes a short video of a few seconds—recording the wonderful moments of the star on the field, as well as a text description of the corresponding star cover. Rookies, popular superstars, and retired veterans are all involved. The more famous the star, the more exciting the lens, and the more expensive it is.

According to Babbitt Information, it is common for this kind of cards to sell off soaringly. For example, a fan bought a Series 1 James card with a few hundred dollars and sold it for 1,000 dollars. On February 23 this year, it was sold at a price of US$208,000, setting the highest price for a single NBA Top Shot card. Many fans even summed up the truth of “cannot sell”.

In essence, traffic represents public acceptance and is also the most accurate compass in the market. Proper use is the best marketing. As a large traffic pool, the NBA has countless loyal fans around the world, among which a large number of young and middle-aged men already have a certain economic strength and are able to consume around the stars.

This is a market with clear consumer groups and huge potential. After the new NFT gameplay is added, the rapid expansion is indeed reasonable. The same principle applies to celebrities who are interested in trying to build their own NFT.

Yao Ming owns the winery “YAO FAMILY” located in the Napa region of the United States. This year, he released his top wine brand “The Chop”, and also adopted the method of auctioning limited edition NFTs.

The NFT collectibles are traded on Opensea, and most of them are priced between 0.2ETF-0.3ETF (approximately RMB 5,000-8,000 ) . The winner will receive this physical wine and a fidelity certificate. The characteristic is that this certificate will be autographed by Yao Ming. Yao Ming’s sales this round, although the price is slightly higher, but with the advantages of star effect and NFT hot spots, the platform sold out in the end.

In addition to celebrities, Twitter is a well-known platform, and the Twitter NFT earlier this year is the realization of platform traffic.

On March 23, 2021, Twitter co-founder and CEO Jack Dorsey auctioned off his first tweet on Twitter, and the final transaction price exceeded US$2.91 million. The content of this tweet from March 2006 is: I just set up my Twitter.

Dorsey announced that the auction proceeds will be donated to charity.

It is precisely because the platform has a large traffic base that the relevant commemorative nodes have collection value.

Behind the sky-high prices, more and more people are beginning to worry about whether NFT artworks will eventually become a fleeting bubble? Is the “only” represented by NFT artwork reliable?

04

“Idiot”: The Hype of Artwork

In order to satirize the auction house’s hype of artworks, the famous British street artist Banks once specially created a print called “Idiot”. In his painting, he thought that the auctioneer was talking eloquently, inciting collectors in the audience to bid, and the work being peddled was just an empty picture frame, and it said: I can’t believe you idiots bought this thing.

Ironically, this painting was bought by a blockchain company for US$95,000 (approximately RMB 610,000) and burned on the spot during a live broadcast. Then its electronic version was made into an NFT artwork. It was auctioned on opensea, the NFT trading website, and its turnover was more than RMB 2.4 million, which quadrupled. It’s ironic.

So, what is the principle of the high price?

We can generate a fixed-length string from the uploaded picture, text, word document or any piece of digital information through a mathematical process called a hash algorithm. The most important feature of this string is that it is irreversible.

That is, no one can use this string to reversely deduce what the original file is. And as long as there is a slight difference in the original information, even if it is only a byte difference, the generated string will be completely different. Finally, the owner’s identity information is attached. For each work owner, an irreplaceable token, namely NFT, will be generated .

Therefore, Bipper’s “the first 5000 days” and the divided 105 copies are completely different works. Strictly speaking, it does not count as a second sale. Take advantage of the technical loopholes.

Can NFT technology ensure that the buyer is the sole owner of this work? Actually not.

Because as long as there is a difference of even one byte, the final digital fingerprint will be completely different. This “uniqueness” is flawed. For example, if you want to copy a work, make a slight modification in its hidden place, or even just add a frame to it, a new NFT work will be formed, which is not a copyright issue. The real guarantee of the seller’s rights and interests depends on the transaction agreement with the author and the integrity of both parties.

05

Meta universe: Let everything really be NFT

When the concept of meta-universe gradually became popular, NFT was no longer limited to works of art, and had become a key key to the world of meta-universe.

Metaverse, or Metaverse, is also the concept of this year’s fire. The list of companies entering the game includes Facebook, Microsoft, Tencent, Alibaba, ByteDance, Station B, NetEase, Nike, Dyson, LV, Samsung, LG… Facebook and even all in Meta universe changed its name to Meta.

The most commonly cited concept is that the meta universe is a virtual space that can mirror the real world and is independent of the real world. To put it bluntly, it is actually an immersive experience, to develop another “real” life in the virtual world.

With the upsurge of Metaverse, the outside world is looking forward to its linkage with NFT.

“Just like the importance of asset certificates in the physical society, the meta-universe ecology also has a large number of digital assets, and asset certificates are needed to promote the economic cycle of the meta-universe.” Li Ming, director of the Blockchain Research Office of the Institute of Electronic Technology Standardization, believes that digitalization Asset certificates are a key element of the metaverse ecology, and NFT can become a form of expression of digital asset certificates in the metaverse, and will gradually evolve with the development of metaverse.

At that time, it may be as large as physical assets, artworks, business ideas, intellectual property rights, as small as personal Weibo, Moments, videos, games, toys, pets, photos… It seems that everything in the real world can be connected through NFT Blockchain world.

In other words, the meta universe will become the best container for NFT.

During the bonus period, ordinary players entered the game one after another. As long as it is a unique work, it can be uploaded. The value of the work is measured by the purchaser. Someone uploaded a simple color block.

Similar to the way of Twitter founder Jack, some people made their own Twitter screenshots into NFT to commemorate special moments. The picture below is to commemorate the number of Twitter subscriptions 888 and the number of followers 88.8K, both composed of the number 8, and even the price is positioned at 0.8ETH.

Some people also uploaded a few simple texts.

However, this is a layout about the future.

The first thing that needs to be faced is that Metaverse has also brought a lot of space for NFT to hype.

According to a report by Phoenix.com, the digital torch for the 2022 Hangzhou Asian Games with an original price of 39 yuan has a price of 3.149 million on the auction platform. The Dunhuang Feitian NFT, with an initial price of “10 Alipay Points 9 RMB 9”, has the highest price of 1.5 million yuan.

Under the carnival, NFT is deviating from its original value. For ordinary people, it is also difficult to distinguish who is the real label of NFT, art, game, blockchain, meta universe, currency circle, or hype?

In the Internet era with a high degree of mutual trust based on blockchain technology, the opportunity to get rich overnight is becoming more and more illusory.