Warning of 'virtual currency collapse'

Will NFTs be an alternative?

Two years after the outbreak of Corona 19 in Wuhan, China, at the end of 2019, Corona 19, which attacked the world from China to Europe, Africa, the Americas, and Asia, has infected 280 million people and infected 5.5 million people by the end of 2021. made him die close. Corona 19 has literally become a pandemic and has become the biggest catastrophe of the 21st century, putting the whole world into a crucible of lockdown.

Asset markets such as stocks, real estate, and cryptocurrencies have been heating up even amid the COVID-19 pandemic that has destroyed many self-employed people. In particular, the price of Bitcoin reached $70,000 from $30,000 in early 2021, and its market capitalization exceeded $1 trillion.

As of the end of 2021, there are about 16,000 virtual currencies around the world, with a market capitalization of 2.2 trillion dollars. El Salvador, in South America, has designated Bitcoin as a legal currency, and even coined the term “Cryptoization” to select cryptocurrency as a legal currency. It is analyzed that the value of money has decreased as the cash balance released by the US Federal Reserve increased from $4 trillion to $8 trillion to overcome COVID-19, and the value of money fell and the liquidity was directed to cryptocurrencies.

However, there are warnings that this year will be a 'year of cryptocrash' when the price of cryptocurrency plummets.

It is predicted that the US Federal Reserve will finish tapering to reduce the amount of cash flow in the first quarter of next year, and then raise interest rates, leading to a fall in asset prices such as bitcoin.

There is also a scenario that central banks in each country will start full-scale regulation on oversized cryptocurrencies, and the blockchain-based cryptocurrency trading system, which is said to be safe from hacking, will gradually become vulnerable and will be hit by a large-scale hacking.

Some predict that the non-fungible token (NFT), which is emerging as a cryptocurrency with no intrinsic value, will replace it.

It is analyzed that NFT, which encrypts tangible and intangible assets with an Ethereum-based blockchain system, will become an essential item in the metaverse era.

The British Economist reported that the global NFT market capitalization, which was $340 million in 2020, will exceed $14 billion in 2021, and will reach $80 billion by 2025, citing market research firm DappRadar.

Find out what NFTs are emerging in the metaverse era and what you need to be aware of.

$69.3 million per digital token...

How was the 'beeple myth' possible?

On March 11, 2021, the NFT of 'Everydays: The First 5000 Days' by American digital artist Mike Winkelmann, known by the name of Beeple, will be held in 255 years. It was sold for $69.3 million (about 85 billion won) at Christie's auction with history. For a living artist, it is the third-highest bid in Christie's history.

What is contained in the NFT, for which the successful bidder paid $69.3 million, is an encrypted unique number to access Bipple's 'first 5,000 days', the title of the work, transaction records, and an address to access the original digital file. . The only right guaranteed by the NFT is the right to access, view, and personally exhibit Bipple's 'First 5,000 Days' using a computer. "This auction is a monumental demonstration of what the NFT can do," said Noah Davis, Christie's director of post-war contemporary art.

Sold for $69.3 million, 'The First 5,000 Days' is a collage of digital images of works created by Mike Winkelman from 14 years ago. Bipple is an active digital artist who creates and publishes one work every day, and the record-breaking auction was also the final version of the NFT work that had been going on for the past few months.

Beeple started releasing the NFT series in October 2021, selling for $66,666.66 per piece. By December, they had all sold $3.5 million worth of NFT series. In November of last year, Winkelman sold NFT for $66,000, and one of the works was resold for $6.6 million.

The reason Bifle's NFT was sold at a high price was the fact that Bifle's followers reached 2.5 million mainly on social media, Bifle was an active artist who produced one digital artwork every day for 14 years since 2007, and Christie's historic auction It is analyzed that this is because the company guaranteed the work. The sudden spread of the popularity of NFTs amid the cryptocurrency craze also played a part.

On March 22, 2021, 11 days after Beeple's NFT went on sale, the first tweet posted by Twitter co-founder and CEO Jack Dorsey 15 years ago when he started Twitter sold for $2.9 million. Jack Dorsey's tweet sold on 'Valuables', an NFT trading platform of 'Cent', an SNS network powered by blockchain, was posted on March 21, 2006, and 'Just setting up my twttr' (I just set up my twttr) Twitter is complete) is one sentence.

Jack Dorsey's tweet was bought by Sina Estavi, CEO of Bridge Oracle, a Malaysia-based blockchain company. Jack Dorsey's tweets remain in his Twitter account after the auction. What Estavi pays $2.9 million to receive is an NFT holding certificate signed and certified by Jack Dorsey, a kind of virtual autograph.

Like Jack Dorsey's tweet, Estavi also bid for $1.1 million to buy a tweet from Elon Musk, CEO of SpaceX and Tesla Motors, listed on 'Valueable'.

https://twitter.com/elonmusk/status/1371549960030842893?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1371549960030842893%7Ctwgr%5E%7Ctwcon%5Es1_&ref_url=https%2Fwww.cnbc.com%2F2023A%2F 2F03%2F16%2Felon-musk-is-offering-to-sell-his-tweet-as-an-nft.html The

Twitter NFT that Elon Musk was

offering to sell

was the trophies in turn saying, “Your NFT for vanity. It is a techno music that recites the lyrics, "Eternity never sleeps. It is guaranteed by proven facts."

In an interview with CNBC in the United States, Estavi said, "I bid for the NFT auction by Jack Dorsey and Elon Musk to emphasize the importance of NFTs in the future of cryptocurrency and technology. It also draws interest in the philanthropy sector in the cryptocurrency space. I wanted to,” he said. Jack Dorsey sent 95% of Twitter NFT sales of $2.9 million, excluding 5% of sales, to GiveDirectly, an African refugee relief charity, to help African refugees suffering from COVID-19. made it so

The NFT wind spread to the media world.

In March of last year, the New York Times made a bid for an NFT article written by reporter Kevin Roose on the NFT, and it sold for $560,000.

The New York Times NFT column, which was put up on an auction site for 0.5 ETH (800 USD), was sold for 350 ETH (560,000 USD) a day later. donated

The winner of the New York Times column NFT was Farzin Fardin Fard, the CEO of a music production company based in Dubai, who was found to have collected and possessed several expensive NFTs.

On October 25th last year, the British Economist made the cover of September 18th as an NFT and sold it at an auction for $400,000.

All profits, excluding transaction costs such as minting to make NFT and listing on auction sites, were donated to The Economist's education foundation.

Due to such NFTs, the market capitalization of NFTs, which was $340 million in 2020, exceeded $14 billion in 2021, and is expected to reach $80 billion this year.

According to a survey conducted by market research firm Harris in March of last year, 11% of Americans said they had purchased NFTs.

That's the equivalent of Americans investing in commodity commodities.

A must-have item in the metaverse era...

How NFTs were born

NFT is a digital record implemented in a blockchain system, and was developed in 2014 by American venture entrepreneur Anil Dash and digital artist Kevin McCoy to help prove the authenticity of a work of art.

In 2017, as the game Cryptokitties based on the blockchain system became popular, digital image cats implemented in NFTs sold for thousands of dollars. However, NFT's attention was paid to when Bipple's digital art was sold for $69.3 million at a Christie's auction in March last year.

Non-fungible tokens NFTs are digital records encrypted like cryptocurrencies. However, unlike cryptocurrencies that have the same value and can be exchanged for each other, they are different, such as airplane tickets or ballpark admission tickets. The token stores data such as the name of the NFT and a link to the digital image. Each token is stored in its own digital wallet. Digital images connected by NFT can be viewed, copied, and downloaded by anyone, even if they are not NFT owners.

The NFT proves that the owner has a particular digital image, but does not grant any copyright or exclusive rights to use the image. Even Anil Dash, the creator of the NFT, is reacting intriguingly to paying a huge sum for being able to list a specific digital image holder on a blockchain system, the Economist reported.

NFT is a record that exists in the block chain system, and it is shared transparently so that anyone can know the transaction record, and it also has the advantage of being able to receive a certain amount of royalties for each transaction.

Although it is possible to link a certain level of legal rights contract to the NFT, the trading conditions and rights for actual works of art are stipulated separately by the trading platform.

NFT is in the spotlight as a means to implement a new digital economy in that it is implemented in a decentralized blockchain system that is safe from duplication, tracking, and hacking, allowing direct transactions between parties without a centralized administrator.

It is expected that large-scale real estate or specific technologies and rights can be sold by dividing it into multiple NFTs, and loans can be made without an intermediary company.

The Economist introduced that in June of last year, TechCrunch founder Michael Arrington sold an apartment in Kiev, the capital of Ukraine, through an NFT trading platform authorized by the Ukrainian government.

In the sense that NFT stores only the link linked to the digital image, not the digital image itself, the separately stored original digital image may disappear (Link-rot), and the blockchain system in which all participants share transaction details is inefficient and It is also pointed out that it is not eco-friendly in that it consumes a lot of electricity.

Since the identity of the person making the NFT transaction or the source of the transaction funds cannot be known, there is also a concern about the side effect of being used for crimes, etc.

Rice NFT in the Metaverse Era...

Urgent need for system and system improvement

Joo Jae-beom, one of the nation's best pixel art artists, announced in August that about 5,000 NFT works that have partially modified his pixel art Mona Lisa work are being sold on the account of Monas of OpenSea, an NFT trading platform. found. It has been confirmed that more than thousands of Mona Lisa works made with NFT have been sold, earning about 79 pieces of Ethereum (about KRW 310 million) in profit (source = CoinDesk December 17, 2021).

Marketing company Wannabe International created the digital image of Lee Joong-seop's 'Bull', Park Soo-geun's 'Two Children and Two Mothers' and Kim Whanki's 'Untitled' into NFT to create its own digital art integration platform, 'Bitcoin NFT (BTC-NFT)'. Attempted to trade with the company, but stopped due to concerns raised by the copyright owner's family and the foundation (Seoul Economic Daily, June 2, 2021).

The 'Sad Frog District' non-fungible token (NFT) project with a frog character theme has been removed from the NFT marketplace Open Sea due to copyright infringement. This comes after Matt Furie, creator of 'Pepe the Frog', requested that the project in the Sad Frog District be taken down due to copyright infringement. The Sad Frog District is an Ethereum-based NFT project that uses 7,000 randomly generated frog characters as their profile pictures, and damage is expected to occur to 1,900 people who have already purchased the NFT (Seoul Economic Daily, August 18, 2021) ).

As interest in NFTs is growing, disputes over NFTs are on the rise in Korea. At the 'Copyright Policy Direction in the Next-Generation Digital Environment' discussion held jointly by the Korea Copyright Commission and the Korea Intellectual Property Journalists Association (KIPJA) on December 9 last year, participants participated in the legal and institutional overhaul to ensure that the newly emerging NFT market is properly formed. agreed that it was urgent.

NFT utilizes the standard interface ERC (Ethereum Request For Comments)-721 that is generated and traded on the Ethereum blockchain. There are various ways to create an NFT, but it is usually made through a coin brokerage site (marketplace). To create an NFT, you need a work, cryptocurrency, and a cryptocurrency wallet. Creating an NFT is called minting, and at this time, a fee called gas is required, and the fee and transaction price are paid in cryptocurrency. To sell NFTs, you need to list them on a brokerage site. In this process, bigger problems may arise due to rights issues that are unclearly stipulated in the current laws, illegal theft due to lack of awareness, irresponsible issuance and transactions of NFTs by platform operators, and inadequate systems.

Professor Won-oh Kim of Inha University School of Law, who attended the discussion, said, "The key to realizing a sustainable metaverse is to allow people with the same interests to use NFT to create digital products and to produce, plan, trade, and invest together. NFT Although businesses using NFTs are rapidly expanding and developing, the legal status of NFTs, regulations on transactions, and establishment of rights relationships are insufficient. As there are many aspects to be done, legal risks must be reduced along with industry promotion policy Unpredictable things may occur, such as NFT hacking or double minting, disputes over rights relations between NFT art producers and buyers, etc. Legally and institutionally There are many tasks that need to be supported. It seems urgent to establish guidelines for platform trading and users for market participants at the pan-government level.”

Professor Park Kyung-shin of Ewha Womans University Business School said, "The mode of copyright infringement related to NFT can be divided into 1) when a newly created NFT is similar to or identical to someone else's work, and 2) when another person's work that exists in real life is published as an NFT without a title. In the case of art, there is a problem in the case of issuing a forgery rather than an earlier work through NFT, in addition to issuing an earlier art work through NFT without the consent of the copyright holder. Even if it is relevant content, if it is published as an NFT, a separate judgment is required as to whether or not the moral right is violated.”

Lee Joo-young, in charge of CJ OliveNetworks, said, "It is a reality that there is vague anxiety about the rights of receivers and suppliers to digital assets. In addition, platform operators must actively protect the right to originality In the limitless digital world, the current workforce-based originality check and protection activities are limited, so system improvement using technology and Together with the accredited institutions, active intervention is required. It is necessary to operate an overall rights protection, notarization, tracking, and protection system for digital assets in an accredited institution that can function like a music copyright association.”

Jeon Jae-rim, senior researcher at the Korea Copyright Commission, said, “Since NFT transactions only provide metadata, it is unclear whether this can be viewed as a valid copyright transfer or license agreement. may disappear, or you may purchase an NFT whose link is missing. In preparation for this, it is necessary to operate a separate storage system IPFS (Inter Planetary File System). In this case, it is also necessary to regulate whether the right to reclaim a certain royalty to the copyright holder will be recognized in Korea,” he said.