NFT is an artist's money game? Brief analysis of NFT value and storage method. NFT is a game where artists talk about money?

 "When bankers have dinner, they talk about art; when artists have dinner, they talk about money."

——Oscar Wilde (1854-1900)

Last week, Filecoin /IPFS founder Juan tweeted: “NFT not stored on IPFS is not your NFT”. He also reposted a post about discussing the true ownership of artworks, which described an artist creating his own artworks based on OpenSea , the NFT trading platform of the Ethereum ecosystem , and questioning the ownership storage certificate of the artworks, rather than signature confirmation.

The above exchanges have brought some thoughts to IPFS: What is the latest market status in the market? How does IPFS confirm NFT rights? How is the value of NFT defined? Explained one by one below.

There is a saying in the market that describes NFT as follows: Except currency, everything can be NFT. Those who do not have a preliminary understanding of NFT can read the article "Messari: A Comprehensive Understanding of NFT".

NFT standard definition and market direction

At present, the mainstream NFTs on the market are developed and applied based on Ethereum. The main standard definitions are: ERC-721 and ERC-1155. Among them, ERC-721 is a completely non-homogeneous token, and ERC-1155 is a semi-homogeneous token. The difference is: ERC-721 describes a single asset, and ERC-1155 describes a single asset. Take Unisocks, a socks that has recently sold for more than 30 million US dollars as an example. The socks have a total circulation of 500 pairs in the market. If ERC-721 is used as the standard definition, only one pair of socks can be transferred at a time; ERC-1155 As a standard definition, it is possible to transfer multiple quantities of socks of the same category at one time.

Briefly introduce the market direction of NFT with two products, namely: Flow and OpenSea, which represent IP and module simplified artistic creation respectively.

Simplified structure of modules. OpenSea is the largest NFT trading platform based on Ethereum, with a total transaction volume of over US$90 million in February. OpenSea was initially dedicated to the development of modular tools for NFT. As the market rises, its NFT trading platform has been picked up by waves. The advantage is: art creators can quickly create art based on OpenSea without paying gas fees, not just confirming rights. Compared with this, the market for modular tools is larger, but the drawback is that the high gas fee on Ethereum hinders the rapid development of NFT.

OpenSea official website

IP breaks the circle of business models. It is precisely because the gas fee on Ethereum is too high that Flow can emerge from the world. Flow is a public chain that focuses on NFT. The difference from Ethereum is to improve the expansion speed and throughput performance to show superiority. Flow mainly uses IP to launch products to break the circle. This mode is somewhat similar to a mobile game. At present, it has launched the NBA TOP SHOT. In the future, it will cooperate with UFC, the world's top and largest professional mixed martial arts tournament, and launch NFT.

Flow represents a business model, which is also a relatively mature business model in the market; while OpenSea represents an underlying protocol/application protocol. When the NFT commercial market is not fully marketed, solving technical problems may be more beneficial to the NFT market Really move forward.

After understanding the NFT market, let's understand why IPFS is more suitable for NFT.

Filecoin and NFT fit naturally

So how is NFT stored on Ethereum? Because it is difficult to achieve full chaining for the current Ethereum network, it is mainly expensive and difficult to implement. Therefore, it is generally mainly used to store documents with hash values ​​(centralized servers or IPFS) offline to cast NFT communication. certificate. But if it is stored on a centralized server, there is still the possibility of being tampered with or deleted.

IPFS/Filecoin itself is a decentralized storage protocol, which can store a large amount of data in various situations, and can ensure that the data cannot be tampered with. In this regard, Juan suggested that only NFTs stored on IPFS can truly ensure ownership.

pinata.cloud

Pinata: IPFS/Filecoin chain mover. Pinata is the role that connects the NFT platform to move NFT from Web 2.0 to Web 3.0. For example, Rarible, known as NFT music Taobao, and OpenSea, the world’s largest NFT trading platform, will provide a permanent storage method through Pinata’s Pin Manager service. Record the ownership of the NFT locally.

Currently Filecoin technology can only support off-chain storage in the NFT market. With the implementation of Filecoin smart contracts in the future, NFT can exchange data and value based on Filecoin itself.

After discussing the NFT storage method, what is the value of NFT? And how to determine?

NFT value = practical value + cultural value + artistic value + economic value

The recent NFT boom has repeatedly pushed the price of NFT art to new highs. Recent examples include: on March 11, digital artist Beeple’s artwork was sold at Christie’s for a high price of $69 million; Donald Trump’s animation clip was filmed. The high price of 6.6 million U.S. dollars; LeBron James and other NBA players' "highlight moments" in the NBA Top Shot set a sales of more than 230 million U.S. dollars.

Beeple's NFT collage "Everydays: The First 5000 Days" sold at Christie's

So, what are the specific values ​​of NFT? The author believes that it may be composed of practical value, cultural value, artistic value and economic value.

Practical value is the value of the NFT itself, such as tickets, real estate, equity and insurance, etc., all have actual scene value. Even works of art have their value in the study of academic attainments, such as the aesthetic principles behind the "Smile of the Mona Lisa", and the "Surfing the River on Qingming Festival" reflects the market culture at that time.

"Mona Lisa" on display at the Louvre Museum

Cultural value is relatively subjective, a bit similar to the reputation valuation of listed companies, and is biased towards a sense of value identity. Cultural value is aimed at some objects with historical, cultural and temporal significance. It is possible that scarcity will give them higher value. For example, the bronze statue of the beast heads of the twelve zodiac animals in the Old Summer Palace belongs to the historical testimony of the burning of the Old Summer Palace in the Qing Dynasty, so it has collection value. Even the beast heads that everyone imitated in the later period also have a certain historical and cultural value.

The volatility of artistic value is relatively large, and varies with each person's aesthetics. Generally speaking, the image of a work is original and not plagiarized, and the colors are naturally coordinated and pleasing to the eye, and the work has a high visual value. Suppose that coupled with the paintings by famous artists, the quantity is lacking, and the artwork itself has some cultural significance (Picasso's "Two Women Running by the Sea" created a new artistic situation of Cubism).

Picasso's Cubist works: "Two Women Running by the Sea"

Economic value is the operation of some market hype. For example, street artist banksy destroys his own work and then turns it into an NFT encrypted artwork for public sale for $95,000, etc., through some means to make the market less rational.

As for the recent art NFT, because it has not been settled for a long time, it may be biased towards cultural value and economic value, and the cultural value is not very obvious. There is a certain degree of instability in its value, that is, there is a certain bubble.

It is precisely because of this bubble that the blockchain can get out of the circle and attract more art creators to participate in creation.

End of the article: Clubhouse's voice on NFT

The author found that the topic of NFT has been popular on Clubhouse, and it is mainly divided into two groups: insiders and outsiders. The following are some views.

Views from outsiders:

The wealth effect of NFT artworks has attracted a large number of people to look for business opportunities, including art creators and other creators. During the discussion, the author found that each field (artwork, equity, etc.) has a deep gap-each field has its own problems, but how can NFT really cut into this field? It may be necessary to start from the actual situation of the track.

Insider's point of view:

Infrastructure investors: The beginning of an industry is definitely inseparable from the establishment of its infrastructure, because the vertical track develops relatively quickly and is more conducive to the development of NFT.

Art hobby holders: They like art creation and have a certain ability to appreciate art, so they will invest according to their hobbies, and will not pay much attention to the investment value of NFT in the short term.

Of course, the economic value of art will also bring many people who hope to find profit opportunities from it, but in this NFT auction, who will be the ultimate winner? It may be the blockchain and the art industry.