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This article comes from the official account of Wechat: SF Chinese (ID:kexuejiaodian), author: SF

Introduction

In recent years, words such as NFT, Bitcoin and blockchain have flooded the Internet. Before most people figure out what these are, they see that some people get rich through bitcoin and some people lose their money because of NFT. Some people say that NFT is a hoax, so what on earth is NFT? What's the use? Where will it go in the future?

(translated by MeravOzair / Meraf Ausseil / Li Yi)

This article is published in Science focus, No. 3, 2023.

Some valuable or high value-added goods, if through the traditional way of trading, need a lot of manpower, material resources, financial resources, it is difficult to promote. Through the NFT transaction, there is no need to carry physical goods to successfully complete the transaction. The core advantage of NFT is authentication 2021, Non-Fungible Tokens (hereinafter referred to as NFT) has been in the media spotlight.

There is no doubt that it is the celebrities who are contributing to the flames. They auctioned their NFT holdings at "sky-high prices" of hundreds of thousands or even millions of dollars, putting NFT on the "hot search" again and again. For example, Jack Dorsey, one of the founders of Twitter, sold his first tweet in the form of NFT, which sold for as much as $2.9 million.

Under the double blessing of the constant hype of people with ulterior motives and the influence of celebrities, many people have formed the illusion that no matter who it is, they can create their own NFT and sell it at sky-high prices.

As Marx said in Das Kapital, once high profits are found, some people will take risks. From "fishing" fraud, to fake auction, and then to NFT fraud, illegal incidents involving NFT have emerged one after another in recent years, and many people have suffered losses. According to OpenSea, the world's largest NFT trading platform, more than 80 per cent of the NFT assets "cast" on the OpenSea platform are actually fake.

Photo source: pexels, however, not all bad news about NFT, NFT stakeholders have been trying to put an end to all kinds of fraud, do their best to protect more and more NFT consumers, related technology is also improving. Moreover, in the commercial field, we also find that NFT technology has a great application prospect.

Although it is not too late to mend, it is clear that prevention should be taken before it occurs, and it is more crucial to fundamentally put an end to the hype and scams related to NFT. Moreover, the core advantage of NFT is authentication, and all kinds of identity fraud should be banned.

As a new technology with great potential, the future of NFT should not be limited to digital products such as celebrity tweets and creative pictures. The future of NFT lies in business and economics.

Why would you say that? In today's society, all kinds of daily behavior are inseparable from trading. No matter what the transaction is, it is accompanied by the transfer of ownership.

Only by confirming the identity of both parties to the transaction (whether individuals or other entities) and the authenticity of the transaction, can the transfer of ownership be completed reasonably and legally. This is precisely the advantage of NFT-providing the authentication required during the ownership transfer process to facilitate the completion of the transaction.

Does NFT change the future business model? NFT can break the original mode of ownership change and rekindle the hope of commercial transactions that can not be carried out due to the difficult problem of ownership change.

BlockBar, a liquor trading platform, is a good example.

Photo: many rare and valuable wines on pexels's online platform, such as 50-year-old whisky or 40-year-old rum, are so demanding that even if someone buys them, they are not easy to transport, not to mention the possibility of changing pillars during a long period of transportation. So how can the rich who buy these wines to show their prestige status prove that they really hold these famous wines?

BlockBar precisely discovers this core need of users, so they store all the famous wines in a winery in Singapore, which is properly preserved by advanced temperature control equipment, and each bottle of famous wine has a NFT corresponding to it, thus establishing a connection between physical and virtual wines. In this way, the trading of famous wines between the rich and wealthy only needs to "show" the NFT certificate, instead of taking the valuable physical famous wines around.

In this way, the change of ownership of famous wine can continue until someone decides to open the bottle of wine. At this time, BlockBar only needs to destroy the NFT certificate under the witness of the owner, and the change of ownership of famous wine has come to an end.

In the traditional trade of famous wine, this is obviously not the case-because the identification of wine requires a lot of manpower, material and financial resources. Today, NFT makes it easy and efficient to trade famous wines at a much lower cost. This also allows other goods with higher added value to find a new business model.

In fact, like BlockBar, digitizing ownership through NFT can also be applied in many fields. Whether it is physical items such as famous wine, or virtual or digital products such as pictures, videos, sounds and tweets, ownership can be proved through NFT. NFT can prove that the car belongs to you, and even your marriage certificate and your college graduation certificate can be stored in your exclusive blockchain account in the form of an NFT certificate.

Of course, these certificates will not involve transactions, but proof of identity, but you can also use the blockchain account as a "cloud safe" to keep these certificates.

NFT technology can also be applied to the real estate industry-through NFT certificates, real estate ownership can be displayed, completely replacing complicated documents such as traditional land leases and property certificates. Even through the NFT certificate, you can trace the history of real estate transactions, all the information is clearly visible, real estate transactions are more transparent. As a result, the time cost, labor cost and transaction cost of real estate transactions and land ownership changes will be greatly reduced.

Another typical example of the wide application of NFT technology is the raging creation and trading of virtual images on the large online community Reddit. At first, Reddit launched the NFT certificate in the hope that users could sell their own works of art like real-life artists. With NFT certificates, these online artists can trade works of art and get paid accordingly.

Even when these virtual images are sold for the second time on other Internet platforms, online artists can still receive corresponding royalties. The value that online artists gain through these virtual images is no longer just to create and sell a work.

Photo source: pixabayNFT technology has great potential and broad prospects in the commercial field. NFT technology can make transactions smoother, safer and more transparent, and the legitimate rights and interests of creators in different fields can be most effectively protected by NFT certificates, so there is no reason to doubt its future-- as long as it is used in the right place.

Introduction to the author

Meraf Ausseil is a leader in blockchain and cryptocurrency research with a deep background in data science and quantitative strategy. She received her doctorate from New York University's Stern School of Business, where she focused on global financial markets and their microstructure. At present, Ausseil mainly studies the block chain ecosystem.

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