Do digital collection NFTs really have collection value?

NFT digital collections have become a hot topic recently, and many people have poured into this market, hoping to gain collection value from them. However, PHP editor Xigua believes that whether NFT digital collections are really valuable for collection is not easy to answer. Although some works in the NFT market have been sold at astonishing prices, this does not mean that every NFT has collectible value, nor can it be compared with traditional works of art. Before discussing the collection value of NFT, we need to have an in-depth understanding of the nature of NFT.

Are digital collections really valuable?

Digital collections really have collection value. Any item that can become an "art piece" or "collection" should meet at least two conditions, namely scarcity and indivisibility. The basic feature of Internet data that can be copied freely makes it difficult to reflect the scarcity of "artwork"; on the other hand, there is no "indivisible" restriction on data. Therefore, before the emergence of NFT, even if an artist created a digital artwork online, no one would pay a high price to buy it. However, the emergence of NFT has provided new ideas for the development of digital collections, and it has also enabled digital collections to have the characteristics and high-value attributes of real works of art.

NFT as a digital collection has various types and forms, which is mainly due to the different ways of casting NFT. Two of the most common methods are original creation mode and the combination of digital technology and encryption technology. In original creation mode, NFTs are made directly from digital technology and encryption technology.

The "Every Day: The First 5000 Days" mentioned in the previous article is a work created by Beeple. He started producing one digital picture every day on May 1, 2007, and until January 7, 2021, he produced a total of 5,000 digital pictures continuously. Each picture is an independent work named "Every Day", and the collection of these 5,000 pictures constitutes the work "Every Day: The First 5,000 Days". Another creation model is the derivative creation model, where NFT digital collections are connected to real-life artworks. For example, an original painting by artist Banksy was burned during a live video and then sold as an NFT for $380,000. In this case, the NFT represents the ownership and uniqueness of the destroyed artwork, allowing it to be traded and have value on the digital market. This innovative method of art trading is gradually attracting people's attention and exploration.

What should I pay attention to when trading digital collections?

Be aware of the risk of copyright infringement when trading digital collections. Globally, digital collections are traded in various forms, and may even be circulated as “securities.” However, according to my country’s regulatory trends, token financing activities are expressly prohibited. While the government’s ban mainly targets fungible tokens such as Bitcoin and Ethereum, it can be inferred that non-fungible tokens will also not be allowed to conduct financing activities. Therefore, platform parties involved in NFT transactions must always pay attention to the compliance of transactions. Currently, the most mainstream transaction method is through online platforms, which is also the digital collection transaction method permitted by Chinese law.

Transactions through online platforms are mainly divided into two forms. First, there is a category where the issuer of digital collections is the same party as the platform. For example, the "NBA's Top Shot" project is a digital collection officially produced and sold by the NBA, and users can purchase it directly on the NBA's official website. Secondly, the more common form is to use large blockchain websites such as Ethereum as intermediary platforms to use their wide influence and advanced technology to trade digital collections.

Digital collections are synonymous with NFT. Like digital currencies such as Bitcoin, they are all created based on blockchain technology. Therefore, since its inception, digital collections have been labeled as easy to speculate, buy low and sell high, attracting a large number of players to participate. Although the secondary market trading of digital collections is prohibited according to current domestic regulations, various platforms for trading are still springing up. According to statistics, as of July this year, there were 820 NFT platforms on the market.

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