[줌인] 2.8 billion won in a single tweet?… What is the’Impossible’ NFT?

Input 2021.03.09 13:10

The tweet posted by Jack Dorothy’s CEO (CEO) at an auction using a non-replaceable token (NFT) transaction hit a quote of $2.5 million (about 2.8 billion won) on the 7th (local time). The protagonist with the highest bid was Sina Estavi, CEO of BridgeOracle, a cryptocurrency-related company. The tweet the city said it was going to sell was the first tweet he posted in Twitter history in March 2006, saying, “Creating a Twitter account.”

The industry sees it as a’natural thing’ for cities to reach out to blockchain technology, which has recently attracted attention in the virtual asset market. The city is a leading cryptocurrency advocate, because the amount of bitcoins he has accumulated through its subsidiaries so far amounts to 170 million dollars. When the city launched a tweet auction on the 5th, the US economic media business Insider said, “It is not surprising that he, who has been advocating cryptocurrency for a long time, jumped into the NFT craze.”

NFT refers to certain cryptographic digital assets that are non-fungible to replace one token with another. Unlike general cryptocurrencies such as Bitcoin, each token has a unique value, so it has scarcity. Metadata containing information about the product and a timestamp that prevents illegal copying are combined to create the only existence in the world.

NFT is in the spotlight in the field of digital art and online sports and game item trading because it allows you to transparently know to whom and how much it was sold. The characteristics of the blockchain, which cannot be forged or altered, are also attractive. In short, if a work is made NFT on the blockchain, no one can follow it or touch it.

So where is the NFT used? It is the metaverse. A representative example of metaverse, which is a compound word of’Meta’ meaning abstract and’Universe’ meaning universe, is Nintendo’s sensational popularity in the early days of the novel coronavirus infection (Corona 19). It is a forest of animals (Modong Forest). The battle royale action game’Fort Knight’, in which more than 40 million users from around the world gather and communicate in a virtual space, and’Minecraft’, where users can directly create a new world, are also metaverses. These days, where concerts by famous singers are also held, NFT recreates the real world economic activities.

With the rise of the NFT, the fear of falling behind in the market, or FOMO (Fear of Missing Out), is spreading. First of all, the efforts of blockchain platforms stand out. Being aware that the majority of NFTs are currently being issued based on the Ethereum blockchain, they started to’attract users’. Among overseas platforms, Tezos is making various attempts, such as issuing color NFTs based on its own blockchain. Among domestic platforms, Clayton is active. Clayton has a token issuance standard KIP-17 for NFT issuance.

The prospects for the future of the NFT are largely divided into two. The most weighty is the opinion that growth will continue through the combination with Metaverse. Pierce Kicks of Delphi Digital, a blockchain consulting firm, explained this as “because NFT proves ownership with blockchain in a digital world where there is no supervisory function and the revenue flow is uncertain.”

In fact, the trading volume of the NFT surged from $62.86 million in 2019 to $250.85 million last year (approximately 285.8 billion won). The number of digital wallets used for NFT sales and holdings was also counted at 22,2179, which doubled from the previous year. Regarding the rise of the NFT, Katie Horne, partner of venture capital Andrison Horowitz, said, “Do you remember the people lining up in front of the store to buy Nike Air Jordan sneakers?” “The heat surrounding the NFT is digital.”

On the other hand, some point out that the supply of NFT will soon exceed demand. This is because issuing an NFT doesn’t cost too much. In this regard, the founder of Litecoin Charlie Lee said, “The biggest problem with NFT is that there is no cost to issue it, so it can be issued unlimitedly.” “If the NFT artwork overflows, the price will inevitably fall.”

Some voices are concerned about the bubble. Investors are flocking to the NFT market too quickly. “The NFT market is showing a price bubble,” Reuters warned. “Like many niche investments, if the excitement of investors subsides, it can cause huge losses.”