This article breaks the biggest misconception about NFT

We’ve been hearing about NFT every day in recent months, and billions of dollars have been pouring into the NFT market as proof of ownership of so-called digital objects has reached a fever pitch.For some, these NFTS are the hottest new collecting hobby, for others a powerful investment vehicle, and still more see them as the future of the Internet.The reality is more complicated. NFTs don’t actually do a lot of complicated things. The way NFTs, blockchains and cryptocurrencies work is extremely technical, and it’s easy for the media to simplify the explanation of technology to mislead the audience about the NFT itself.NFT is not an authoritative certificate of ownership The most misleading claim about NFTs is the one that is closest to the truth:Since NFTs are fundamentally unique and stored on an immutable blockchain, which constitutes proof that you “own” a digital asset, there is only one token like this, and your cryptocurrency wallet has it, so what it symbolizes must be yours.This framework is misleading. First, NFTs can only convey ownership of the token itself. As software engineer Molly White explained to WIRED, “For NFTs,What you buy does not tend to give you ownership of the underlying items (graphics, game assets, etc.) in the same way that you would normally transfer physical or digital art.In contrast, NFTs typically contain only links to managed assets, and NFT does not own copyright, storage, or use rights to the assets themselves.Furthermore, the Ethereum blockchain (currently the most common blockchain that mints NFT) does not distinguish between owning a token and owning it.If someone steals your bicycle, the general understanding is that it is still yours.For NFT, the “owner” is the person who owns the token in their wallet.So if someone’s ape NFT is stolen through a phishing scam, the blockchain treats the thief as the new owner.Centralised marketplaces like OpenSea occasionally step in to freeze the sale of stolen assets (on their own platforms), but this puts the power of “real” ownership not in the NFT itself, but in the markets where they are traded.An NFT is also unique only in the context of the blockchain it creates.For example, the NFT market Rarible offers a choice of three different blockchains when minting tokens, but what happens if two different people mint the same NFT project on different blockchains?An artist can decide to cast their artwork on multiple blockchains, thus having an “original” on each, but deciding which of these blockchains is “authoritative” or “authentic” is still a social and platform issue.Twitter recently started supporting NFT profile pictures, which are displayed in a unique frame, but it currently only accepts NFT from the Ether chain.Twitter could change that in the future, and other platforms could also choose to support other blockchains and possibly even create their own, but this again puts the power in the hands of centralized platforms to decide which chains are the “true “NFT.Furthermore, we cannot prevent someone from casting an image multiple times on the same blockchain.Twitter user NFTTheft has documented numerous cases of users stealing artists’ work on the OpenSea marketplace, creating duplicate NFT, and selling it next to the original (or selling art that the original artist never intended to make NFT).Due to block chain forges NFT can’t verify whether the right of the assets they cast, so by the platform to solve this problem, White explained: “when assets are already in the state of NFT, verify its ownership is more like a social problem, not a technical question, only through the code is hard to do.”According to OpenSea’s own market analysis, more than 80% of NFTS listed on the market are plagiarized art, counterfeit collectibles or spam.The company tried to limit the problem by placing a cap on the number of free lists users could create, but reversed the decision after community opposition.Meanwhile, DeviantArt has tried to help protect its artists by using an automated tool to scan for theft, sending out more than 80,000 infringement alerts to artists in five months, but the tool apparently only works for DeviantArt users.Markets are just one way to interact with blockchain, so even if every major NFT market had tools to stop the minting of stolen art and verify all its creators (a very large and complex task) — there’s no way to stop someone from minting stolen art on the Ether chain.At best, NFTs can only be proof of ownership, and third-party systems still need to validate the external data — artwork, digital objects, etc. — to which NFTs refers.NFTs don’t let you seamlessly link between games or applications Other misleading claims about NFTs are that they will help achieve a true meta-universe, allowing users to move digital items from one game or platform to another.While this is technically possible for very simple data such as images, which are already easily moved from one application to another, it’s almost impossible when it comes to something as complex as a video game project.Game developer Rami Ismail outlined some of the challenges in a tweet, using a simple six-sided die as an example.Even a very simple 3D model involves complex data, including the shape and texture of the model itself, physical and animation information, and simple information like which way is deceiving up.Some game engines use the Y axis as a vertical axis, while others use the Z axis, which means that importing a game from one engine to another can cause the model to be flipped upside down.Game developers or animators can modify 3D model assets to work properly in different games or engines, but this takes time and effort (and labor) to complete.Having an NFT for one game’s items does not mean that another game will automatically support the model.There is also the issue of intellectual property.For example, you have wrath of Thunder, Blade of The Wind Seeker’s Blessing from World of Warcraft.The models, textures, and all related assets of this item are Blizzard’s intellectual property.Let’s say Blizzard can give the player an NFT of that item, but no other game can import it into their game without the company’s permission.And even if Blizzard allows other developers to use it, they will have to work directly with the company to provide assets and make sure everything works properly.This type of crossover is already common in games like Fortnite, which has partnered with franchises including Marvel, Star Wars and God of War to introduce characters into the game.Developers also distribute promotional items to players who own certain games, or even those who have had certain achievements over the years.But none of these partnerships need to be completed by NFTs or marketized.NFTs will Make Artists richer Another benefit claimed by NFT supporters is that they can help artists make money by selling NFT of their art, but the demand for NFT art can be illusory.In March 2021, for example, artist Beeple made headlines with his $69 million NFT sale.An analysis by the Alan Turing Institute, which focused on OpenSea data, found that 75% of NFT sales were below $15, and only 1% of transactions were above $1,500.Obviously, very few people can actually sell NFT for more than $1,500.Martino, head of IBM’s Vision ARTIFICIAL intelligence lab.It’s not a magical place where everyone gets rich, and in any other business, it’s the same problem.”Problems with money laundering a person sells NFT to his dummy account at a high price, giving the impression of high demand.CryptoSlam, an analytics firm, found more than $8 billion worth of laundering trades on LooksRare, an NFT marketplace, out of a total of $9.5 billion.”Our research paper went viral on Twitter and many people linked our observation that 90 percent of transactions are carried out by 10 percent of wallets to the characteristics of laundering trading,” said Baronchelli, associate professor at City University London.”Seventy-five percent of sales are under $15, and once you factor in gas fees and the cost of launching the NFT marketplace platform, most of your transactions are at a loss, “Martino said.”The main winners are creative teams and marketing,” said Dan Olson, a video writer and Internet researcher who published a lengthy in-depth report on NFTs on YouTube called “Line Goes Up.”They are charging transaction fees, service fees and percentage royalties.They’re the ones making the real money.”In theory, markets like OpenSea and Rarible offer artists “free” NFT casting.First, the NFT is not on the chain until it is purchased, the foundry fee is passed on to the buyer (raising the purchase price of any transaction), and the cost of doing the transaction is difficult to predict because gas charges fluctuate over time.Royalty features are another pain point for artists, NFTs have no built-in royalty per se, and market royalty is prone to bugs, compatibility issues, and manipulation.In general, NFT markets cannot monitor the transfer of NFT between the wallets of buyers and sellers.A market can enforce royalties and pay original artists on NFT minted and sold on its own platform, but transactions through other platforms can cut off royalty payments entirely, making it relatively easy to bypass royalties entirely.While there are suggested solutions that could standardise royalty payments across the market, they can be complex to enforce and, coupled with rampant fraud in the NFT space, make this more difficult to achieve.The Devil is in the Changing Details Most of this article focuses on ethereum, ethereum-based NFT, and the biggest markets that use them.However, because there are very specific details about how each project and blockchain works, it is difficult to map out exactly how any particular NFT project could be abused or become an outright scam.In the field of NFT and encryption currency, media news reports tend to simplify its main technical details and potential problem and the wealth effect brought by the exaggerated NFT, and often described completely different projects as a whole, this will simplify the expense of NFT understand the cost of making it more users is driven by the interests to enter the market, they know nothing aboutTo fall into a carefully designed trap.

Leave a Reply

Your email address will not be published.