Startup Legal Talks (13)
Are NFTs really valuable? Are NFTs worth investing in? The relationship between NFT and cryptocurrency, blockchain, metaverse
A word that everyone must often hear on online media platforms now is NFT. Although everyone has heard about blockchain and cryptocurrencies for so many years, it has always been a game for a few people. Although facebook changed its name to meta last year, the concept of the metaverse became popular, but we always feel that this is a commercial gimmick for facebook to save itself. . In this wave of buzzwords, NFT has become the real hottest keyword in 2021. It also makes the concepts of Web3, DAO, DeFi, and white papers that we have heard a little about but don’t understand sound really interesting.
Maybe you have read a lot of articles explaining NFT, but you still don't know what NFT is? This is a sadness of the information age we live in. In the age of information scarcity, we cannot acquire knowledge because we have no information, and in the age of information explosion, we cannot make judgments because of too much information. Is NFT a new economic growth point in the next decade, or is it a Ponzi scheme that spreads flowers? Today we will talk about NFT together.
1. NFT from the beginning to the present
NFTs were originally born in 2017. But the real popularity of NFTs will be in 2021.
Twitter CEO Dorsey auctioned off his first tweet as a non-fungible token NFT for $2.5 million.
Sotheby's auction house sold an NFT "headshot" called "CryptoPunk" for more than $11.7 million.
After seeing the success of Cypherpunk, the Yuga Labs team also worked overtime to create 10,000 ape heads in various shapes. Then NBA star Curry bought an ape pattern for his social account avatar for $160,000.
And Cryptokittie, the obsessive cat born as early as 2017, has also become popular again, with a turnover of 7 million US dollars within 24 hours.
Seeing this, we seem to think that anything can increase in value as long as it is combined with NFT. So are NFTs really worth so much money? Can every NFT product sell for such a high price? Or is this another wave of games where the rich cut leeks from the poor?
2. Is NFT a commodity or a currency?
Everyone knows that NFT mainly comes from the field of art and collectibles, but in fact, NFT can be any commodity or asset in the metaverse world, so there is a saying that "everything can be NFT".
All the articles that introduce NFT will say what is NFT? Non-Fungible Token, other cryptocurrencies, are all Fungible Tokens, right, homogenized tokens. But when it comes to this, many people wonder, why is art still considered a token? That is to say, NFT, a commodity or asset, is essentially a token with cryptocurrency?
To refine it again, can it be said that commodities are money and money is commodities?
Does this sentence sound familiar? Have all of us learned that currency is also a commodity in middle school, but it is only a special commodity, because currency can be used as a general equivalent, which can change the previous inefficient way of barter, and is more conducive to transactions happened.
Currency is a special commodity, and commodities can also act as currency to a certain extent (and can also be directly exchanged with others).
In this way, it will be easier for everyone to understand this way. Currency and commodities are essentially the same. In the context of blockchain, it is not surprising that they are both called tokens.
Since the birth of cryptocurrencies, they have been dominated by homogenized currencies, which makes people feel that blockchains are all rigid, rigid, and emotionless numbers and algorithms. That is to say, there are only various currencies in a market, and there are no commodities that can be purchased with currency. Tokens are also at the stage of exchanging money in the virtual world with money in the real world. It sounds boring to exchange money for money, right?
And the birth of NFT is like giving a world of pure money with only money a variety of consumer goods. The cryptocurrency I got is not only a number on the virtual world account, but also gives I exchanged for various commodities in the virtual world. NFT makes the world of blockchain suddenly colorful, and allows the metaverse to generate infinite imagination.
3. NFT proves that you are you
In the real world, if you hold a glass of water in your hand, a computer is on your desk, and you live in a house, then you can probably judge that it is yours, or at least you have the right to use it. It only takes a few simple steps to determine ownership.
The intangible assets in the virtual world are very difficult to confirm. A glass of water went from my hand to yours, you have it, I don't have it. A computer moved from my desk to yours, you have it, I don't have it. I move out of a house, you live in, you have it, I don't have it. But there is a document I pass on to you, and I still have it here. I'll pass on a piece of music to you, and I still have this piece of music here. A video I pass on to you, and I still have it here.
Piracy is still rampant, even with the crackdown on intellectual property laws in various countries. It is because the way of confirming the rights of tangible assets in the real world is difficult to apply equally effectively to intangible assets in the virtual world. This is a physical gap, and no matter how intellectual property law is written, it is pale and powerless.
The emergence of NFT has solved this problem very well. So I say that NFT is the real power artifact in the metaverse world.
4. What is the value of NFT?
So after talking for a long time, is NFT really a new economic growth point for the next 10 years, or is it a Ponzi scheme that spreads flowers? My answer is neither, he's not as hyped as he is currently hyped, but he's not a pure bubble either.
And if you want to ask another question, is the value of NFTs inflated now? My answer is - obviously inflated.
The value of any commodity conforms to the basic laws of economics. As we said just now, NFT does have cross-era significance, because it can perfectly solve the problem of confirming the right of intangible assets in the virtual world. But it's only worth that.
Just like in the real world, the value of the real estate certificate itself is almost zero, and the real value behind it is the house. The real factor that determines the value is actually the location, area, design and other factors of the house, not that the house has no value at all, and it is only valuable with this real estate certificate. If your name is on a small dilapidated house in an extremely remote location, then your property value will not be added much because of this title deed.
The same is true for NFTs in the Metaverse. Jay Chou auctions a song in the virtual world in the form of NFT. The real value is still Jay Chou’s song, but the ownership of this song in the virtual world is further determined through NFT. . That is to say, a song of Jay Chou presented in the form of NFT will be very valuable, but a song of yours is also less valuable in NFT.
What I just said is the value of NFT in a broad sense. But there are still some NFTs that do not fully conform to this law of value. For example, obsessed with cats, cypherpunk, boring ape, these are not as simple as a song by Jay Chou that has a high degree of recognition in the real world and put it into the metaverse world. Cat-obsessed, cypherpunks, and boring apes were unknown before NFTs appeared, but those who bought them at high prices were not just fools.
So why are these NFTs more valuable than those with similar content and time? Because they occupy many "firsts" in the NFT category.
Cypherpunk is the earliest NFT, Boring Ape is the NFT with the fastest increase in transaction price, and Infatuated Cat is the NFT with the fastest increase in traffic. These "firsts" are like the first astronaut Armstrong to set foot on the moon, yes One small step for him, one giant leap for mankind, and the second man on the moon, even by a few seconds, no one knows his name. Therefore, these many NFTs that occupy the first place in different segments do have higher value than NFTs of the same type and appearing at the same time.
What is the real value of NFTs? Is it going to wait a few years, until the dust settles, and the day when it's worth it back to know the answer? It doesn't take that long to wait, the tulips of the 17th century were a bubble, but tulips weren't totally worthless. When the tulip bubble was the hottest, in fact, everyone knew in the deepest part of their hearts that the real value of tulips was just a pot of flowers for decoration in your home. The value of NFT, if you put aside too many dazzling noises in the information age, you will find that its real value lies in the confirmation tool of the virtual world, and after years of impetuousness in the market, the value of NFT will eventually return to a The value of the right tool.
More dry goods, less verbose, here is the American company law, I am the American lawyer Liu Xiaoxiao. See you next time.
