At 10:45 p.m. on May 20, 2021, the seventh phase of Huobi Prime project APENFT (NFT) was officially launched for trading. After two rounds of price-limited trading, according to Huobi Global data, a total of more than 26,000 people around the world participated in the matching transaction. Enthusiasm runs high.

Among them, the number of participants in the first round was 12,984, and the number of winners was 1,448; the actual number of orders placed was 41,710, and 1,500 were drawn, with a probability of 3.59%. The number of participants in the second round was 14,489, and the actual number of transactions was 13,910.

As of 23:10, the highest price of NFT rose to 0.00000522 USDT, with a maximum increase of 40 times.

Under the background of Bitcoin plummeting and NFT soaring, NFT has entered the public's field of vision. NFT has become the new darling of artworks out of the circle. NFT solves the problem that "copy and paste" in the traditional Internet era cannot effectively protect intellectual property rights.

The price discovery mechanism of NFT is currently in its original stage. Everyone can use and appreciate digital artwork. Only one person/organization is the owner of the digital artwork, which can be transferred through negotiation and auction.

This price discovery mechanism will eventually flow to exchanges (like mainstream currencies, all players bid together), and the price of NFT will rise.

At present, "King Fried" NFT has appeared on the market

For example: On March 11, Christie's online auction of NFT artwork Everydays: The First 5000 Days was sold at a sky-high price of US$69.34 million.

After NFT entered the public eye, due to factors such as chainization, currencyization, internationalization, and irreversibility of smart contracts, it is not easy to supervise this new technology product. Some experts assert that NFT will become the next legal disaster area, using the concept and banner of new technologies to carry out pseudo-innovation.

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What are NFTs

NFT (Non-Fungible Token), translated as: non-homogeneous tokens, which are indivisible, irreplaceable, and unique. On the blockchain, cryptocurrencies are divided into two categories: native coins and tokens.

The native currency includes the well-known Bitcoin, Ethereum, etc.; the token is attached to the existing blockchain and uses smart contracts to record the ledger, such as the Token issued by attaching to the Ethereum.

Tokens can be divided into two types: homogeneous and non-homogeneous.

Homogeneous tokens (FT), Tokens that can be substituted for each other and can be split almost infinitely. For example: A has a bitcoin and B has a bitcoin, there is no difference in essence, this is homogenization, it is a homogeneous currency.

Non-homogeneous tokens (NFT) are unique and indivisible tokens, such as encrypted cats, tokenized digital tickets, etc. It is equivalent to a numbered renminbi. There will not be two renminbi with the same number in this world, nor will there be two identical NFTs. Common bills (invoices, network domain names, etc. are non-homogeneous).

The key innovation of NFT is to provide a way to mark the ownership of native digital assets (that is, assets that exist in or originate in the digital world), and this ownership can exist outside of centralized services or centralized libraries.

Ownership of NFT does not prevent others from reading it, NFT does not capture information and hide it, but captures information and discovers the relationship and value of that information with all other information on the chain.

Due to its non-homogeneous and indivisible characteristics, NFT can be bound to some commodities in the real world.

In other words, it is actually a digital asset issued on the blockchain. This asset can be game props, digital artwork, tickets, etc., and is unique and non-replicable. Since NFT has natural collection attributes and is easy to trade, encrypted artists can use NFT to create unique digital artworks.

NFT is based on a pixel avatar project called CryptoPunks in Ethereum in 2017. The total number of these pixel avatars is limited to 10,000. No two characters can be the same. Anyone with an Ethereum wallet can receive it for free. secondary market transactions.

The small blockchain game Cryptokitties (obsessed with cats) is rapidly becoming popular, which is a game of pawing cats on Ethereum.

Cryptokitties is the first Ethereum-based game

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Types of NFT scams

As NFT continues to gain popularity, the number and scope of scams has exploded. There are mainly: counterfeit NFT platforms, fake NFT platforms, NFT counterfeiting, fake NFT airdrops and free social media scams.

l Fake NFT platform

Counterfeiting NFT platforms is a common method of online fraud. Users look like the website is the same as the official platform website, and scammers will try to obtain the user's login information or credit card information.

l Fake NFT airdrop

A fake NFT is a counterfeit, and a fake limited edition is really issued. Since the content carrier of NFT is public, there is basically no cost for counterfeiting, which leads to continuous counterfeiters. Everyone must carefully confirm the issuer account and NFT records.

l NFT social media scam

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1. Investors must do their homework before investing, analyze calmly, and invest rationally. You can calmly analyze and observe in relevant NFT media and communities, so as not to be tricked by scammers (childcare).

The packaging routine of NFT fraud is to package on the chain, fabricate a story (such as the signature of a certain celebrity before his death), let the participants form emotional resonance, push up the price, and hype. Do a reverse image search on your NFT to make sure the NFT you want to trade doesn't appear on other NFT exchanges/markets.

2. When purchasing NFT, try to choose to buy it on a large NFT trading platform, and carefully identify whether the website you visit is the official website of the trading platform, so as to prevent money loss and information leakage caused by visiting fake phishing websites.

3. Do not easily click on unknown links sent or pushed by strangers, unfamiliar emails, communities, social software, etc. When you need to enter account and bank card information, you must carefully identify the authenticity.

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Suggestions for combating and preventing NFT fraud

1. For the monitoring and information collection of suspicious websites or domain names, it is recommended to strengthen the automatic information monitoring and manual feedback channels of such websites. Pay special attention to information monitoring such as digital artworks, electronic co-branded cards of football stars, and digital pets.

2. Provide official reporting, reporting, and identification services, include this type of NFT identification into the clue database for detection, and continue to update and disclose it to the public.

3. The domain name of the NFT practitioner’s website is subject to strong filing supervision, and cooperates with the relevant departments of the filing. For website filing, practitioners will have a sense of awe and traceability.

4. Strengthen the supervision of NFT practitioners' technical teams, offer anonymous rewards for case detection and clues, and increase crowdsourcing technical services for emerging fields.

Faced with the explosive growth of NFT, Zhifan Technology believes that: on the one hand, investors are advised to invest rationally, keep calm, and weigh the pros and cons before taking action; on the other hand, they hope that relevant regulatory agencies will establish a risk supervision system for NFT and other blockchain businesses as soon as possible , to regulate its development.