In recent years, various ideas that occupy large portions of virtual environments such as AI and cryptocurrency have emerged. These are the core of new business items and are being used in some fields. If we are not familiar with them, we might be confused. However, most people do not know about them, other concepts continue to appear so they give up to get know about them. Therefore, today’s Cover Story will introduce the new item ‘NFT’ and where it’s actually used. Also, differences from cryptocurrency will be compared so that many people can learn and use it.
<What is NFT?>
First, it is important to understand the relevant concepts to accurately understand NFT. NFT is an abbreviation for ‘Non-Fungible-Token. Also, it is a virtual token that uses blockchain technology to prove the owner of digital assets. By putting the addresses of digital related files such as pictures and videos in tokens, they are used to represent their unique originality and ownership. It is a type of token distributed on the blockchain and each token has a special value that cannot be replaced with another token. For the reason that the value is different, also the price is different so it is appropriate to apply this technology to digital content like paintings, music and videos where authenticity and ownership are very important.
Each asset can be given a serial number or recognition value to prevent replication, forgery, modulation due to blockchain technology. This has the advantage of inserting tokens that can be authenticated by anyone freely produced content and as explained earlier. Stability is guaranteed in web risks like cloning and hacking. For example, when a bag is produced by Hermes, a representative luxury brand, it can be understood as the same concept as the name of the artisan who produced each bag with different item number. In addition, since the token itself becomes ‘transaction identification data’ the distinction between genuine and fake products is clear, making it easy to trade on the internet. This can be defined in one word as ‘NFT is a genuine certificate of digital assets’.
NFTs that have been traded so far include a digital painting collection by Canadian singer Grimes, a record of the game in which Go player Lee Se-dol beat AlphaGo only, and a resume written in 1973 by Apple founder Steve Jobs. Judging from it, we can figure out that the NFT market is gradually expanding and active transactions are taking place.
<Differences between NFT and Bitcoin>
The most frequently mentioned concept along with NFT is Bitcoin, and both have something in common that they use blockchain technology. Recently, investment through Bitcoin has continued to be popular and various news on this topic are frequently covered. Among them, NFT, called the second Bitcoin, has emerged, but we often wonder whether to invest without knowing their clear differences. Therefore, this time, we will look at the difference between them.
First, the biggest difference is whether there is a unique recognition value. Bitcoin has the same price per coin and can be replaced as a currency, so it can be exchanged for the same value of bitcoin. As the stock is measured at the same price per share, the number of bitcoins is priced according to the number of bitcoins. But an NFT is irreplaceable because it has its own recognized value. NFT assets mean that there are no substitutes exchanged for the same price anywhere.
Simply, Bitcoin is ‘concept of money’ and NFT is a ‘concept of assets’. The concept of money means that two 10,000 won bills can be exchanged no matter who has them because they have the same value of “10,000 won” even if they have different serial numbers. However NFT is ‘concept of assets’ can be explained as an example of apartment ownership. It means that even if two people each have the same apartment and assets with the same structure. They are divided into different contracts, so they cannot be replaced or exchanged.
<How is NFT being used?>
NFT is being used by various companies with the great advantage of ‘irreplaceable tokens’, and I would like to introduce some of the types.
The first is the art market. According to NFT research firm Non-Punable(논펀저블), collections and artwork accounted for a large proportion of NFT transactions. The reason is that asset information and creators are put on digital art works, giving them the uniqueness of digital art works. Moreover, unlike existing artwork, royalties will be paid to both collectors and creators when NFT artwork is resold. NFT artwork ownership worth investing in, but because they can buy and sell online, they are easier to trade than existing artworks, and there are expectations that their value may continue to rise like coins because it does not take the time and cost to store and move.
In addition to buying and selling artwork, there is an art platform called ‘Art Token’ which plans and provides technical support solely for NFT art. ‘Art Token’ is a new digital art platform that supports Korean artists to expand overseas and links E-commerce and NFT platforms. It archives real works along with NFT works. As an opening event, 100 NFT special commemorative coins containing the works of Rye Jae-chun were issued through AirDrop as a gift to buyers on a first-come-first-served basis.
In addition to these works of art, Kakao and Naver, which are well-known companies, also have started NFT businesses. These two companies announced plans to launch a market that can buy and sell NFTs through blockchain subsidiaries. Naver said they plan to open a market called “Line NFT” in Japan in the first half of this year, which can be stored in Line Messenger or in its own virtual asset wallet, “Bitmax Wallet”.
Kakao is also preparing in various ways to open the NFT market, and Ground X, Kakao’s blockchain affiliate, has been providing an official service to the market called “Clip Drops” since November 2021. In the market, NFT issued by Ground X’s blockchain platform “Clayton” can be bought and sold, and we can store NFT in “Clip”, a virtual asset wallet saved on Kakao Talk.
So far, we have learned about the basic definition and concept of NFT and where NFT is being used. The NFT business is on the rise in earnest, but it has not been approached by the general public so far. Also, I think related information is insufficient. NFT is gaining huge popularity as it can clearly prove ownership of digital content. However, there is also a disadvantage that only the unique identifier and the link of the location where digital content is stored are recorded because it is not possible to put all of the data into the blockchain in the NFT. Accordingly, if a company that provides the cloud stops operating or if data is deleted due to server problems, the contents of the NFT may be permanently deleted. As well, the NFT marke soon after it became active, it can cause great confusion for copyright holders, owners and market managers due to the problem that the transaction-related laws are not accurately specified.
As the advantages vary, we should not overlook these problems, and we need a lot of effort and improvement in the future to ensure that content can be safely protected and stored through accurate and honest procedures. If any of Gachon University's students want to register their content or own other people's content, I recommend you to jump into the NFT market.
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