COO of MoonXBT: NFT, a milestone for easy, liquid ownership of your creations
Updated: Feb 25, 2022
Youtube’s Chief Product Officer Neal Mohan said in a blog post recently that the company will be exploring Web3 ventures, as new technologies like blockchain and Non-Fungible Tokens (NFT) can allow creators to build deeper relationships with their fans. His comments reaffirmed Youtube’s plan to expand into the Web3 business. Earlier in January 2022, Youtube’s CEO Susan Wojcicki also indicated that the site will be expanding in ways that can help creators capitalize on new technologies like NFTs.
Youtube’s announcement has made it another tech giant jumping on the NFT bandwagon. Previously, Twitter, ByteDance, and Meta have announced that they are all-embracing NFT, the most heated topic in Web3.
According to market tracker Cryptoslam.io, around $24 billion worth of NFTs has traded to date, including more than $4 billion in January 2022. NFT marketplace OpenSea, which has captured 97% of all NFT sales, raised $300 million in funding in early January 2022. The platform is now at a valuation of $13.3 billion.
NFTs are widely used by creators, particularly in digital arts featuring popular themes. Even Bing Dwen Dwen, the official mascot of the Beijing Winter Olympics, has its own themed NFTs launched by the International Olympics Committee in February 2022. NFT can ensure “the creators are rewarded equitably for their creations”, said George Lee, COO of MoonXBT, “this was the purported solution for several problems associated with conventional intellectual property law.” Lee continued that the time limit related to the validity of a patent is overstepped by an NFT, which lasts permanently. The exchange and trading of an NFT are also marked by great convenience, which could take place in a matter of seconds.
However, like any other new technology, NFT has been mired in a high degree of speculation. Lee highlighted that there is a direct correlation between publicity and the hype associated with an NFT. One example can be found in February 2022, when CryptoPunks sold its #5822 “punk” collection for 8000 ETH, equivalent to about $24 million. The price of an NFT rises as it is being exchanged from one owner to another, with the latter bidding for a higher price. However, this also means that the exchange could demote its price if the bidder and the owner have arrived at a deal that is much lower than its original value.
NFTs are also subject to skepticism for their anonymity nature. Many NFT creators use pseudonyms, making it difficult to verify their credentials and therefore leaving limited room for proper due diligence.
A recent Fortune article wrote that emerging technologies are always “rife with scams, lack of legal clarity, and regulatory concerns”. There have been criticisms that NFTs could be used as tools to fuel a Ponzi scheme, whereby unsuspecting investors with fresh funds were drawn in and became the only reason for the sale cycle to continue. Lee recognized NFT frauds are still possible, as the majority of the population is still in the process of being educated about NFTs and their characteristics. However, he took the view that an abusive utilization of a good product could only happen when there is a deal between a fraudster and an uneducated victim.
Some mainstream and cryptocurrency-focused media have published articles educating investors to avoid NFT scams. A Rolling Stone article in January 2022 highlighted some straightforward ways such as “turn off your discord DMs” and “keep your private keys private”. The article quoted RAC, founder of a Web3 consulting firm, who believed that being scammed is “the risk you take” by entreating into the relatively “uncharted territory”. RAC is confident that with better education, such skepticism about NFTs shall pass.
Lee is of a more optimistic view that if research has been done properly, the purchases of NFTs could welcome a rewarding experience. For example, an NFT serving as an identity proof of a highly sought-after item in a popular game would most likely increase in value over time as more players join the gaming environment. “GameFi NFTs would accelerate the participation of gamers as their efforts and investments could be much more value-added,” he said. Simultaneously, this catalyzes the marketing of such a GameFi ecosystem.
NFTs offer participants of a crypto ecosystem the permission to own items they are truly fond of. This was “not possible in the obsolete and highly bureaucratic legal system under which we live,” Lee said, “where the equity of rewards concentrated in the hands of the creator of the environment or platform”. The underlying assumption was that the developer of a game should profit from the sale of the hardware or downloaded software which powers the game. The transaction was that of a seller and a buyer, with the seller getting funds from their efforts and the buyer obtaining an entertaining experience.
Lee believed that NFTs represents “a milestone for an easy, liquid and accessible ownership of your own creations”. Although skepticism about fraud and losses may still occur, for the time being, he said that the best way is “centered around a three-pronged test: product research, owner research, and utility research”.
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