Twitter founder and CEO Jack Dorsey tweeted for the first time:
● just setting up my twttr (I’m just setting up my Twitter)
A word of the world’s first tweet on Twitter was bought in March 2021 for about 300 million yen ($ 2,915,835,47 cents). In other words, the words “just setting up my twttr” sold for 300 million yen.
The CEO of the IT company who bought it said, “In the future, it will be as valuable as Mona Lisa” (* 1).
The difference between the 300 million yen “just setting up my twttr” and the “just setting up my twttr” I’m writing in this article is whether or not it has an NFT.
NFT proves that the 300 million yen “just setting up my twttr” is genuine, and at the same time, the “just setting up my twttr” I’m writing here is just a copy. ..
NFTs have the potential to turn digital data into a new asset, but some have already criticized it as a bubble.
NFT proves that electronic data is genuine
NFT is an acronym for Non Fungible Token, which translates to non-fungible token.
Fungibility and tokens are unfamiliar words. A token is a technology that authenticates “that is it”, and there are various types of tokens.
Token is a technology that authenticates “that is it”
For example, credit cards have a mechanism to ensure security such as card numbers and passwords, but if these are in the hands of someone, they will be misused.
Therefore, if you use a disposable password when paying with a credit card via online shopping, the password will no longer be usable after the payment is completed, so there is no problem if it is stolen. This disposable password is called a token.
It can be said to be a token because it authenticates that “the disposable password belongs to the user of the credit card”.
NFT is a crypto asset that rents the Ethereum system
What kind of token is an NFT is a crypto asset. So, if NFT is a member of Bitcoin, it seems to be half, and it is half different. NFTs are crypto assets that “borrow” a crypto asset system called Ethereum.
Cryptocurrency assets In the Ethereum business, we manage cryptocurrency assets called Ethereum with a system called blockchain.
NFT rents the Ethereum blockchain (system), but it is a crypto asset that has nothing to do with Ethereum.
This explanation raises two questions:
- Question A: Why did you bother to create an NFT? Why not use Ethereum directly?
- Question B: Why use NFT? Is cash not good?
Why did you bother to make an NFT?
Why did you bother to create NFT when crypto assets include Ethereum and Bitcoin? Because it’s a new business.
NFT was born when a company started a new business using NFT. With the crypto asset Ethereum, you have to work according to the rules of Ethereum, but if you launch NFT, you can proceed with your business according to your own rules.
Why use NFT
Why use NFT? Is cash not good? The answer is that cash doesn’t work, because it’s hard to buy and sell digital property.
Digital property includes CG images and digital data of music. Character data such as “just setting up my twttr” is also a digital property.
Digital property can be copied almost infinitely on a computer, and the real thing and the copy are exactly the same. Therefore, for example, even if you buy it thinking that “this must be the original CG image”, it may be a copy. In digital property, the real thing and the copy are exactly the same, so it cannot be judged by appraisal.
This is scary and you can’t pay cash to buy digital property.
If your property is not a digital property, you can buy it with confidence. For example, there is only one genuine Mona Lisa, so if an art appraiser guarantees it is genuine, you can rest assured that you will pay as much cash as you like.
I think the following new question arises here.
● Why are NFTs convenient for buying and selling digital property?
NFTs are convenient for buying and selling digital property
NFT is an image that fits perfectly with digital property.
NFT uses the crypto asset Ethereum system. The Ethereum system guarantees that 1 Ethereum is worth 1 Ethereum. Therefore, you can exchange cash for 1 Ethereum.
Suppose a digital property is worth 300 million yen. At this time, you can buy and sell digital property with NFT for 300 million yen worth of Ethereum. The reason for this sale is that the Ethereum system guarantees that the digital property with NFTs is genuine.
Suppose Mr. A sells his digital art with NFT to Mr. B. Mr. B pays Ethereum or cash to Mr. A. Mr. B can then sell the digital art with NFT to Mr. C. Since Mr. C has an NFT, he knows that the digital art is genuine, so he can buy it with confidence.
●Why are NFTs convenient for buying and selling digital property?
The answer is that with NFTs, the Ethereum system guarantees that digital art (digital property) is genuine, so you can buy and sell with confidence.
The future of NFT: The University of Tokyo, Kyoto University, and Mercari
It is epoch-making that the originality of digital property can be guaranteed.
You can see as many Mona Lisa paintings online as you like, but the value of the Mona Lisa at the Louvre is still there. That’s because people all over the world know that only the Mona Lisa in the Louvre is original.
However, digital property has no special value in the original, as the original and the copy are exactly the same in terms of quality, quantity and value. However, since NFT guarantees the originality of digital property, the value of the original should increase gradually in theory.
NFT is a computer technology with high expectations for the future, and the University of Tokyo, Kyoto University, and Mercari, a flea market app, are also entering the market.
Investing in art IC certificate development with university funding
Startbahn, Inc. (Headquarters, Bunkyo-ku, Tokyo), which builds NFT infrastructure, has raised approximately 1.1 billion yen from venture capital related to the University of Tokyo and Kyoto University (* 2). The company will develop a system to use this funds as a certificate by attaching an IC tag to the artwork.
Venture capital is a company that invests in venture companies.
The University of Tokyo has a venture capital company called The University of Tokyo Edge Capital Partners (UTEC), which supports companies that research and develop science and technology in collaboration with university institutions. UTEC has invested in 110 companies so far, 13 of which are listed (* 3).
Kyoto University Venture Capital is called Kyoto University Innovation Capital Co., Ltd. We are investing in drug discovery companies, automatic blood sampling machine manufacturers, and companies that match human resources with AI (* 4).
Mercari aims to distribute digital second-hand goods
In June 2021, Mercari announced that it would enter the crypto asset business (* 5). Cryptocurrency still maintains high asset value, but the so-called crypto asset boom is gone a few years ago. Therefore, it was questioned why Mercari would enter the market by this time.
Mercari has several aims, one of which is to promote the distribution of digital second-hand goods.
Mercari currently offers a service that allows anyone to easily sell their own disused items (second-hand goods). In the same way, we are trying to provide a service that allows us to buy and sell used digital property.
Until now, the concept of rights has been weak in digital property. But as NFTs increase the value of digital property and expand the market, it will be necessary to clarify the rights. With that in mind, Mercari entered the crypto asset business, which is close to NFT.
Summary-Crash or a detonator for the content industry?
In the NFT business, not only the world’s first tweets, but also various digital arts are priced in units of “10 million yen” or “100 million yen”.
The crypto asset industry and blockchain industry have pointed out that NFTs are already bubbled. It’s intuitive. As central banks around the world are easing monetary policy, there is a surplus of money around the world.
It was in the aftermath that Bitcoin soared at one point, and the NFT bubble would not have occurred if there had been no surplus money.
If the NFT bubble bursts, the 300 million yen “just setting up my twttr” with NFT and the “just setting up my twttr” I’m writing in this article will have the same value.
However, the technology that guarantees the originality of digital property is welcomed by digital art writers. As a result, NFTs may be a catalyst for the content industry. You will need to keep an eye on it for a while.