Where does the value come from? Is it inherent to tangible objects? Is it in manufacturing; is there an advertisement behind it? No matter what you believe in, it all comes down to effort. The effort someone puts to create something is the input and output of human creativity. This article explores the efforts in the digital art space and the role of non-fungible tokens (NFTs).
What is NFT? In short, it is the only verifiable digital object that cannot be changed in the system in which it was created . Think of it as a "support contract" or "appreciation contract" to encourage creators and provide a source for their digital works.
Digital Dadaism
Digital assets appear in many forms: authenticity certificates, ringtones, music, audiobooks, videos, downloadable content (DLC), and now NFTs. The basic motivation of the people is some people's demand for collection and others' demand for customization . In the past month, there have been several high-profile high-priced NFT sales. Although the US dollar currency is the framework, these are actually paid in Ethereum (ETH). In the past five years, the dollar value of Ether has ranged from US$10 to US$2,000.
Who wants to be a Pixelaire! ?
Expensive pixels-three pictures (the third is 1x1 transparent pixels), a total of about 46255ETH (46,000-92.5 million US dollars).
The following is an analysis of three sales situations using input and output, the above dollar range, and the'price per pixel' (PPP) of each image above:
Knowledge pixel
The common denominator here is that all participants have a particular interest in the currency used and its supporting system. Those cryptocurrency enthusiasts want to support new online markets that rely on their shares. The most interesting is the sale of Beetle and Metakovan, both of which are business partners of a company (holding 2% or 200,000 tokens and 59% or 5.9 million tokens, respectively), which sells tokens for the art of Beele , Used in its open art projects.
What are you actually buying? artwork? Token? Strictly speaking, this is a data link representing NFT . Some NFT projects do better than others. For example, CryptoPunks is an index of an address array. All data is unique and stored on a chain in a centralized server. In addition, CryptoKitties actually includes unique data in their NFT and adds gamification elements to their contracts. There are other platforms that allow further creativity, such as Async.art and their programmable art methods. In terms of data (metadata), the best method is to decentralize file storage, and the most popular is InterPlanetary File System (IPFS). This technique considers the content of the file rather than the location or name. The format of metadata files has not yet been standardized.
Unfortunately, most markets and platforms use the Ethereum network. Currently, this is an expensive traditional decentralized blockchain, which is a layer-1 network at the base layer. The rapid development of technology makes it difficult to believe that major changes in scalability, safety, and sustainability can be avoided in a reasonable period of time.
Energy consumption lies in the inefficiency of using Proof of Work (PoW) to provide a safe state for all participants. The result of the trade-off is that safety is higher than availability . The most basic analogy is to imagine that if participants A and B own an acre of forest, they both have a business opportunity to reward the person who cut down 100 trees first. Suppose A reaches the goal and wins the business contract, B throws away all the 99 trees they cut, and the competition starts again.
The cost is high, not only because of the environment, but also because of the transaction procedures. Even before the sale, a creator has already paid the cost of minting NFT on the Ethereum network. According to the recent U.S. dollar prices and some additional fees on platforms and markets, the range is 100-600 U.S. dollars. Any future contract owner must consider these costs before supporting the creator. Even before that, creators and their supporters had to go through a process of creating a wallet and obtaining cryptocurrency, and its user interface (UI) still needed improvement.
Of course, when selling an NFT at the high price of ETH (thousands of dollars and millions of dollars), this cost is negligible. As a new creator, this is a huge barrier to entry . The absurd thing is that this process even advocates waiting for the right time of day so that transaction costs will be lower. The current popular planning platforms and markets have become invitation-based to prevent the torrent of hype that attempts to use robots and flippers to amplify. The rankings amplify the sales of top creators through a positive feedback loop. This creates further barriers to entry for legitimate creators.
Virtual symbiosis
Let us step out of this scene and focus on the positive side. The output data is visible, but the underlying technology is invisible. The greatness of the modern blockchain field, and the beauty of decentralization, is that no one is subject to any particular technology ; especially when there is no staking. Using the most popular blockchain is only to truly support the technology, not to support the efforts of creators. It is fascinating to see enthusiasts insisting on using outdated and inadequate technology because of their special interests. Technology prioritizes individual sovereignty rather than centralized control and interests .
There are already better low-cost and eco-friendly technologies. EOS and Wax sidechains are already available. Polkadot and NEAR are being tested and released and are more decentralized than EOS. Wax advertises itself as the "King of NFTs" with the goal of video games and entertainment attributes. AtomicHub uses Wax and allows finer control in the construction of NFTs. It works harder than some platforms and markets, but it has the ability to serve single and multiple creators. Multiple creators can act as a collective and can be hosted on a portfolio or a series of portfolios to create a network circle. When making a sale, a 2% platform commission fee will be charged; this is very different from the method seen before.
You need to create a wallet and get the corresponding cryptocurrency, which cannot be bypassed. But 2-3 clicks are always better than browsing the setting creation or support on a different website. If Ethereum can act together one day, there will be bridges in all these implementations that allow transfer from one blockchain to another.
It is becoming more and more obvious that browsers are the main observers entering the digital world , and supporting this attention will benefit browser creators. Brave is the only browser that is positioned as the default gateway for individuals to interact with cryptocurrencies without the friction mentioned earlier. Imagine that a creator uses attributes on semantic tags to allow patronage and purchase of certain data? This will bypass websites that use virtual currencies to visualize appreciation, and these virtual currencies cannot be exchanged for monetary value. The preferred end result is a micro-transaction system, if done well, currency can provide support. This opens the door for creators who create value on the platform and benefit from this mutual relationship.
Scarcity is a lie
In mature tangible markets, the term "scarcity" is used to express value. Further value comes from the owner's protection of this scarce resource. Tangible collectors can buy, sell and trade, but cannot copy. Digitization removes all of this and preserves production efforts. The traditional market ideology is not applicable in virtual space. Only through artificial means can the word'scarcity' exist in the numbers . Scarcity means technically unpopular and obsolete. This is the democratization of the market that is difficult for ordinary people to understand. The new system requires new terminology. The new perspective is different from the way society treats concepts. Stop selfishly setting up warehouses with a total of $100 billion for tax collection purposes on the port.
Multiplicity is prestige
Technology allows information to spread. The perfect copy can be transferred without restrictions. It is not a single copy, but anyone can make a copy according to their needs. Value is determined by the number of content holders, not by unique owners . There is no longer any incentive to restrict usage rights. One person's output can be enjoyed by everyone. Think of it as free advertising; digital word-of-mouth. The real psychological change is that popularity conveys value in society.
Dissolution of institutions
The auction house shows that 96.1% of sales come from male creators. There are no women among the 40 highest-selling artists. 80% of creatives in New York’s top galleries are white. According to statistics, a maker has very little chance of success, because there are many factors beyond their control.
Secondary market
Most makers make a living by serving their customers. Now through NFTs, they can directly reach supporters. In the traditional market, these creators usually only get paid from the initial sales, and supporters have the ability to resell the creator’s output, which usually generates higher value. NFTs allow creators to be paid in the secondary market. Currently, platforms and markets have a 5-15% royalty range, but the real power lies in the creative community; a sustainable and transparent platform is required to allow makers to get most of the sales returns, and supporters get 5-15% of royalties. What they can do.
Here is an opportunity for creators to unite, stand on their own beliefs, and make this opportunity more fair . As mentioned earlier, the overall goal should be to bring a micro-transaction system that supports creators. The focus of this article is on digital art, but this applies to all creative undertakings: cultural creativity, fashion, jewelry, music, etc. If the maker liberated us from the system, the enterprise and the corruption, it would be a beautiful story.
Reviewed by Nischal Lal Shrestha
on
November 26, 2021
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