For the encryption field, 2020 is an extremely important year, and the most exciting and eye-catching part of it is the rise, decline and recovery of Ethereum 2.0 and DeFi, and many well-known institutions like PayPal have begun to truly Locally accepted and adopted cryptocurrency. In addition, NFT can be called a hidden surprise, which has grown steadily during this turbulent year.
In short, NFT is actually a piece of code, which extends the fundamental innovation of hard supply, self-custodial, and censorship to all “digital assets” instead of just “currency”. The difference is Critical. NFT enables any unique asset or project to be tracked and traded by people, and has all the functions of a homogenized token. Although this asset class is still in its infancy, it has amazing potential.
Take the video game industry with a market value of 100 billion U.S. dollars as an example. In the past three years alone, we have seen hundreds of millions of U.S. dollars in venture capital invested in blockchain game companies to compete for the leadership in this emerging field. Sheep status. In addition, other NFT verticals are also rapidly emerging. In 2020, the number of new projects in the field of digital art and the tokenization of physical assets has shown explosive growth. From sneakers to Cezanne to Saint Laurent, almost everything can now be packaged into a unique and unique NFT and It can be traded.
NFT represents the “ownership” of an asset, and the scope of this ownership is not limited to games or works of art. Any illiquid asset or “unique” asset in the world falls within this scope, such as Financial assets, diamonds and other commodities, and even 3% timeshare rights for a yacht. And the market value of all these asset classes can reach trillions of dollars.
Although the NFT asset class is rising rapidly, it actually has a fatal weakness: scalability. Like most other encryption tools, the biggest difficulty of NFT lies in the deployment of tokens in the real world. Limited transaction throughput, high transaction fees and slow transaction time are all hindering this technological revolution.
Many different blockchains are persisting in solving these problems and creating themselves as a unique digital asset “paradise”. However, if people make a wrong choice and hand over the reins of the future of NFT to a centralized, insecure solution, it will destroy all the future possibilities of a true “community”.
Ownership dispute
All of the above-mentioned block viewing projects all want to compete for the trading network and users on which NFT depends. This is a huge cake. Many people want to get a share of it, but it is far from simple as they think.
The cost of trading an NFT is ridiculously expensive compared to trading ordinary homogenized tokens. If you want to trade one million ERC20 tokens, their transaction fees are the same as the cost of trading one ERC token, but the cost of trading one million NFTs is one million times the cost of trading one NFT. Moreover, these scarce digital assets are inherently illiquid, and each NFT is an independent order book. For example, 15 million Gods Unchained cards correspond to 15 million independent markets, and each market must have its own bid and ask price, which are not connected.
Better technology can provide better scalability and liquidity, and there is no need to compromise on decentralization and security. Therefore, a large number of Layer 1 and Layer 2 solutions are thinking of upgrading their own technology to establish a leading position in the NFT field.
So, who are the candidates?
Layer1 supported by VC
In the past year, we have seen the emergence of many projects known as “ETH killers”, many of which have impressive-sounding technologies and hundreds of millions of dollars in VC investment. Emerging blockchains like Flow have publicly declared that they will become the home of all NFT and blockchain games, and have already reached cooperation with many famous IPs.
But what are their “weapons”? In the end, the three major problems of the blockchain still cannot be solved: the only fundamental expansion and improvement is at the cost of security and decentralization. Although the transaction is always the user’s personal decision, the user must know what they are trading.
Side chain extension scheme
The side chain is trying to run on the existing Layer 1 (mainly Ethereum) in order to provide a low security scalability option for NFT, such as Matic, Ronin, and xDai. However, these expansion schemes fundamentally achieve this throughput by removing the security and decentralization properties necessary to support high-value assets. What’s the point of this?
Rollup: Immutable X and Optimism
“In the short term, I don’t think rollup is one of the “many choices”. I think rollup is the “only” choice. “——V God
A pen is better than a gun
Today’s competition no longer depends on force, but on information. Token holders and investment companies often use an extremely fanatical attitude to spread their chosen projects to others. Anonymous users on Twitter can become a “thought leader” overnight, sometimes they The popularity will last for a long time and witness their predictions come true.
But such marketing has to pay a lot of price. Usernames must know what they need to give up when they use a technology. We are facing a terrible risk of transferring the future of digital asset ownership to the blockchain owned by centralized operators and VCs, and running them with insecure technology.
If we really want developers and financial institutions from mainstream associations to consider joining the NFT field, it is not enough to just build a market with high transaction frequency. The core of NFT’s future needs security and censorship resistance, just like Ethereum today, and can safely support up to a billion dollar project economy.
In the past 6 months, the so-called “Ethereum Killers” have announced their intention to attract NFT liquidity to other chains. Right now, crypto developers, gamers and artists are actively promoting products that can be separated from Ethereum. The most important thing at this moment is: whoever wins in the NFT blockchain war will have the dominance of all future games, entertainment and collection applications.
The competition for NFT in various blockchains is intensifying. Who will win this “war”, let us wait and see.
