Is the NFT sold by Alipay a JPG?

On June 23, Alipay released two limited-edition payment code NFT skins:”Dunhuang Feitian”, and “Nine Coloured Deer”. These NHT are released on the “Ant Chain" app with a limited copies of 16,000 copies, which were quickly sold out. On June 24, Alipay once again launched two NFT Alipay payment code skins themed with the well-known domestic anime "scissor seven", which were also limited to 16,000 copies, which were also being quickly sold out.

Image Source: Internet

Based on Alipay's 1 billion user scale, the concept of NFT has spread rapidly, However, because the platform clearly stipulates that “NFT must not be used for any commercial purposes unless otherwise obtained with the written consent of the copyright owner.” Many professionals in the crypto world believe that the NFT sold by Alipay violates the free circulation nature of the blockchain. What Alipay sells is not NFT, but JPG.” Some people said that in the future, Alipay may become China's largest NFT trading platform.

Although there are different opinions, this does not seem to affect users' enthusiasm for buying NFT on the Alipay platform. As of June 25, Alipay’s "Digital Art" auction website page has contains hundreds of digital works of different styles. All of them are being auctioned according to time, and bids range from tens of Yuans to hundreds of Yuans. Some of these artworks has also lined up for action appointments. Among all of the art works, an art work titled "Junmingdi" is ranked first with a maximum bid of 17,000 yuan.

Since 2021, with the upsurge of DeFi, NFT has shown an explosive trend. Now working with traditional finance, its influence has once again upgraded. Traditional industries are now entering the NFT market, and Alipay’s move to sell NFTs will definitely have practical significance for the current NFT market.

The Difference Between Alipay NFT and EAncrypted NFT

The biggest difference between Alipay NFT and encrypted NFT is the underlying blockchain technology. According to the degree of decentralization, blockchains are divided into public chains, consortium chains and private chains. The NFT issued by Alipay is based on the AntChain. AntChain, as a consortium chain, is essentially different from the NFT products in the blockchain industry. This is also the biggest difference between the NFT sold by Alipay and the NFT we usually talk about. The difference in chains also derives the difference in agreement protocols and in buying methods.

First, the nature of the blockchain is different. NFT is a non-homogeneous token which has the characteristics of indivisible, irreplaceable, and unique. It shares similarities in its attributes with the conventional artworks. The combination of the two strengthens the possibility and practicality of artworks being turned into digital assets. Therefore, the essence of NFT is an asset which possesses blockchain attributes and enjoys the rights and benefit of owing digital assets such as encryption, and free circulation. After an NFT user in the crypto field buys it, this is equivalent to owning the ownership of the NFT, including the rights and interests of collection, sharing, circulation, transfer, and commercial use. Whereas"Alipay's current NFT product" can only be used for collection, download and viewing.

Second, the on-chain protocols are different between Alipay NFT and encrypted NFT. Relying on the consensus of everyone, the public chain is composed of blocks of different creators. It is highly decentralized where each node can freely join and exit the network, and read is free and transparent. Most of the NFTs of public chains are based on on-chain protocols such as ERC721, ERC720, and ERC1155. The Ant Chain technology is based on the public cloud technology service platform, which is independently developed and operated by the Ant Group. Therefore, the written permission of each node in the chain is controlled internally by the central platform. This is why Alipay NFT which is based on blockchain technology can be sold, but the users cannot use them for commercial reasons.

Image Source: Internet

Third, the payment method is different. The "Token" in the public chain is the reward mechanism for the creators, and it is also the circulation certificate on the chain. We call it "coin". The circulation of digital assets requires these "coins" to purchase. Whereas, AntChain is independently owned by the Ant Group. Any researches, developments, independent operations no longer need everyone's consensus on the chain agreement, and no need for a certificate mechanism. The rules are set by the central platform, so it can be purchased by RMB and Ant Points.

What Makes NFT So Popular?

Even if it is not commercially available, Alipay’s "Dunhuang Feitian” and “Nine Coloured Deer" payment code NFT skin and "Assassin Wu 67" NFT Alipay payment code skin can also be sold in seconds, and this also makes users being enthusiastic about the "Gather Fun" platform for NFT bidding and buying. So, what makes people so obsessed with NFT? What is the reason for the rapid popularity of NFT? Simply summarized as the following:

First, technological innovation has promoted the upgrade of the NFT experience. The development of new public chains and side chains has largely solved some of the problems of high rates, congestion and poor experience, and expanded the breadth of the NFT market.

Second, a large number of excellent NFT projects continue to attract new users to join. NBA Top Shot, CryptoPunks, Hashmasks, CryptoKitties, Sorare, Axie Infinity, Art Blocks, MyCryptoHeros and Gods Unchained have a large number of excellent NFT projects, allowing people to see the potential and great value of NFT in the future.

NBA Top Shot-Image Source: Internet

Third, the success of DeFi and the wealth-generating effect of NFT itself. Beeple's "Everydays: The first 5000 days" was sold for US$69.3 million, and "CryptoPunk #7523" was sold for US$11.754 million. The sky-high transaction volume and turnover continue to refresh people's perceptions and stimulate people to join the NFT market.

Fourth, the market continues to increase with a large amount of capital flows in and the industry largely supported by its viral trend brought by celebrities, KOLs, traditional artworks, traditional finance, luxury goods.

NFT is like a superstar that stands in the center of the stage like a star, attracting people who have already entered and are ready to enter in market. This NFT trend has made more people drawn to the market and Alipay’s NFT has a low barrier of entry, convenient payment, and low value, which provides users who want to try NFT a window and it is why Alipay’s NFT can’t be circulated or resold, but users are still paying for it.

The Practical Significance of Alipay's NFT Sale

The combination of traditional finance and blockchain and the sale of NFT by Alipay are matters of great significance themselves. Although the voices are mixed on these NFT products, Alipay NFT has far-reaching practical significance in promoting the healthy development of the entire NFT market.

With over 1 billion users of Alipay, the concept of NFT has successfully moved out of the circle of the crypto world which would guid more people to understand and try NFT. For a long time, the copyright issue of digital works has not been effectively resolved. The plagiarization of works is very common. Nowadays, data can be traced through blockchain technology to protect creators’ economic rights and copyright. The sale of the NFT skin has deepened the public's awareness of the importance of intellectual property rights, and has a positive effect on motivating art creators. In addition, the application scenarios and application levels of blockchain technology have also been more developed and used.

In today's digital revolution, new technologies and new functions are constantly changing our lives. As the underlying technology of Bitcoin, blockchain aims to create an open, transparent, and free circulation system that everyone can participate in. Alipay's practice and expansion of selling NFTs through Antchain has opened up a new idea for future blockchain exploration.

In 2017, Cryptokitties made NFT go viral. In 2020, NBA TOP Shot went online for only half a year and has achieved a transaction volume exceeding 42 million U.S. dollars, accelerating the initial development of the NFT ecosystem. In 2021, NFT will continue to explore and practice integration, and develop applications in the fields of traditional art, finance, entertainment, ticket admission, sports, identity authentication and other channels. As asset forms and application scenarios continue to expand the ecosystem, various types of NFT platforms have also emerged and launched online. For example, Binance NFT, which was just launched on June 24, focused on top-quality encrypted digital art. Additionally, there is also a Gate.io NFT box that was launched on June 22 and dedicated to have everyone participate.

Innovation comes from practice, and the road of development requires various attempts. In the end, the Alipay NFT marks the landing of multiple possible applications of blockchain and the beginning of the horizontal development of NFT. In the future, more people will be get involved in the practice and creation of NFT. The continuation development of NFT will turn the market from the carnival for a few people into the ordinary daily life of the public. The future of NFT will eventually require everyone's efforts!

Extended reading: "Gate.io NFT Magic Box Official Launch (NFT Creation and Auction Platform for Everyone)"

https://www.gate.io/en/article/21304

Author: Gate.io Researcher Hannah.H

*This article only represents the views of researcher and does not constitute as any investment advice.

*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.