Over the past few months, non-fungible tokens (NFTs) have evolved rapidly and have become a phenomenon in the world of crypto assets.
With digital items ranging from tweets to artworks selling for staggering dollars (sometimes in the millions of dollars), a significant number of people may think this is another turbulent vehicle. not.
The latest figures suggest that the bubble may have already collapsed, as NFT weekly sales have plummeted by more than 90% from their peak in early May.
However, business players, artists and entertainers, including Japan, are interested in this trend as NFTs have the potential to create a new kind of digital economy. And, for example, Japan internationally Given that it boasts successful pop culture, anime and manga, many believe that the country has great potential to advance the NFT movement.
However, some experts point out legal uncertainties and risks, and there are reservations.
Mai Fujimoto, known as “Miss Bitcoin” for her activities as a cryptocurrency evangelist, said she has a busy schedule with many meetings with people who are interested in the latest trends in cryptocurrencies these days.
“There were some bubbles in the cryptocurrency industry, but I’ve never been so busy,” said Tokyo-based, which provides consulting services on cryptocurrency assets and blockchain, which is a ledger for recording cryptocurrency transactions. Mr. Fujimoto, who heads the startup company Gracone, said.
From artists to publishers to tech companies, Fujimoto has met with different types of people seeking information about NFTs.
Japan’s NFT market isn’t as vibrant as the United States yet, as Japan is still in its infancy, but behind the scenes there is already a struggle to team up with popular intellectual property owners among companies. Mr. Fujimoto says that.
Some well-known companies have launched NFT Marketplace and have announced their intention to do so in the last few months.
Coincheck Inc., one of Japan’s leading cryptocurrency exchange companies, introduced the NFT Marketplace in March.
“Many people want to make NFT goods but don’t know what to do. We thought we could help them,” said Yusuke Otsuka, co-founder and executive of Coincheck. Stated.
“I think these assets work very well with NFTs,” Otsuka said, as Japan has a rich culture of content that can be converted into digital tokens, such as manga and anime.
“Some publishers want to come and take advantage of their sleeping assets.”
Mercari, another tech company that operates Japan’s largest flea market apps, announced in April that it would also enter the NFT business.
NFTs are digital assets that essentially act as certificates for digital items.
“Before the advent of blockchain technology, it was impossible to create irreplaceable digital items because it was easy to make accurate copies,” said Tokyo-based, which promotes the use of blockchain. Pina Hirano, who heads the organization’s blockchain collaboration consortium, said.
“NFTs can publish copyrights and ownership of digital works, which can facilitate the development of new digital markets,” he said.
This is possible because NFTs run on blockchain technology, the backbone of cryptocurrencies. Blockchain works on peer-to-peer networks that directly link people’s computers and record each transaction from the beginning, without the use of a central server. The system is monitored mutually and simultaneously by individuals or organizations called miners. Miners use computing power to validate transactions and make tampering virtually impossible.
Cryptocurrencies and NFTs are very similar because they are both digital tokens, but the decisive difference is whether they are substitutable.
Let’s say you own 1 Bitcoin and exchange it for someone else’s. The value of each Bitcoin is the same, so nothing really changes. However, in the case of NFTs, each token is different, so even though they are basically the same, you cannot exchange your driver’s license for a friend’s driver’s license.
With this NFT technology, almost any digital work can be tokenized to show its authenticity. As a result, NFTs can add a rarity element to their digital work.
Bubble or game changer?
The high-profile sales of NFTs have made headlines over the past few months.
The most prominent example was in March by artist Mike Winkelman, known as Beeple. Selling Digital Art Works for $ 69 Million To crypto investors.
According to NFT market data provider NonFungible.com, weekly sales of NFT items plummeted from more than $ 175 million in early May to about $ 10 million, weakening the heat of investing in NFTs so far. And it seems.
Soaring prices for many NFTs are showing a bubble, some say they may have ended with a plunge in sales, while NFTs are the next big thing, creating a new ecosystem of digital items. There are also people.
“NFTs have made it possible to add value to digitally produced items. There is no turning back on this,” said Fujimoto of Gracone.
Some Japanese artists are already interested in the potential of NFTs.
“I don’t know if NFTs will really take hold, but NFTs are renewing values that didn’t exist in the past … it’s about being able to do art,” said Tomokazu Matsuyama, a contemporary artist based in New York. Told.
Attending a preview event for a new exhibition in Tokyo last month, Matsuyama introduced an example of Andy Warhol’s unconventional screen printing use in the 1960s.
“What he was doing is no different from NFT. The history of art is an artist who creates works that were denied in the past but have the power to convince people that they are new.” He added that he hopes to see artists gaining fame through NFTs.
Creators who are already on the wave of NFTs include Aimi Sekiguchi, a VR artist who caught the attention of the media by selling NFT virtual reality works for 13 million yen in March.
famous Contemporary artist Takashi Murakami Started an NFT auction of his work in April, but canceled it because he wanted to think more about the “best format” for exhibiting NFT art.
“Through the preparation and discussion so far, I have become more convinced of the great potential of NFTs, and I am looking forward to working on NFT’s digital art,” Murakami said in an Instagram post.
At the same time, Fujimoto, who runs the NFT Art Charity Auction, said some Japanese artists are hesitant because of the potential environmental impact of NFTs.
Many NFTs are generated using the Ethereum blockchain, which requires a lot of computing power to maintain the system.
Bitcoin, which also consumes a lot of electricity in blockchain systems, is often seen as a threat to the environment, and Tesla’s CEO Elon Musk explains why Tesla has recently stopped accepting Bitcoin payments. Is listed.
Despite growing interest, some hurdles may need to be overcome before NFTs can become a popular asset.
According to Fujimoto, it’s still a bit too specialized for non-cryptocurrency enthusiasts to use casually, adding that, for example, installing and managing crypto wallet services is difficult for such users. It was.
“Improving usability for the average user is a challenge,” she said.
In addition, some legal experts have pointed out the uncertainty surrounding NFT ownership.
“If it’s a physical painting, you know you own it,” says Sa So So, the director of Sato Law Offices and Sato Law Offices in Tokyo.
“But with Beeple’s NFT art, anyone can see it on the Internet with the click of a link …. It’s often unclear what the person who bought the NFT actually owns. But they are sold at very high prices. “
Sa Sa Sa Fuji also said that the law does not currently cover ownership of digital items, so lawmakers are strongly encouraged to begin discussions on ownership of digital items.
“Ownership under the Civil Code applies only to something important,” Saito said. “Even if (NFT) could confirm the owner of this data, it is still unclear what rights they have in accordance with civil law, as the law is not designed to regulate such situations. is.”
For example, it is legally uncertain how NFT owners will be protected if the company that publishes and sells NFT digital products goes bankrupt.
While Hirano of the Blockchain Collaborative Consortium believes that NFTs will be game changers in the long run, NFTs “will face some bumps,” as cryptocurrencies have experienced some difficult times. I warned.
“We believe there will be NFT fraud and hacking cases … most of what cryptocurrencies have experienced will happen to NFTs,” Hirano said.
He added that the NFT industry is likely to experience healthy growth through such challenges.
“There will be victims of such an event. We need to think ahead of time how to protect it,” Hirano said.
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