Not just Twitter, Russia's largest social network VK will integrate NFT
Alexander Tobol, technical director of Russia's largest social network VKontakte, said in an interview with Russian media that he plans to integrate NFT and blockchain technology in its operations.
The full name of NFT is Non-Fungible Token, that is, non-homogeneous tokens/non-substitutable tokens, which are indivisible, irreplaceable, and unique. In contrast, the familiar Bitcoin and ERC-20 cryptocurrencies are all homogeneous tokens, namely FT (Fungible Token), which can replace each other or be split. For example, there is no difference between a bitcoin held by Satoshi Nakamoto and a bitcoin held by me.
2021 is the craziest year for NFTs. Although the blockchain game "CryptoKitties" brought NFT into the public eye as early as 2017, NFT has experienced multiple milestones in 2021. Encrypted artist Beeple's "Everydays NFT" set a record for the most expensive artwork at a record auction price of $69 million; established auction houses Christie's and Sotheby's began auctioning NFT artworks; social network Twitter's former CEO Jack Dorsey sold an NFT version of the first-ever tweet for $2.5 million.
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VKontakte integrates NFT
In Russia, when it comes to social media, people will definitely tell you that it is VKontakte. It is the most influential commercial social media platform in Russia and Russian-speaking regions, as well as the largest number of users in Russia. social software. As of April 2021, VK has nearly 650 million users worldwide, with 97 million monthly active users and 15 billion daily messages.
VKontakte was developed in 2006 by Pavel Durov, and it took only 2 years to overtake Odnoklassniki, another Russian social networking site. The gameplay is similar to the combination of Weibo and WeChat. You can follow clubs and celebrities, get customized content push, pay attention to official accounts, watch news and videos, post dynamics, and chat with friends. Payment and other various needs.
In an interview, technical director Alexander Tobol said that integrating NFT and blockchain will be part of a suite of tools to monetize user-generated content and protect copyright. To some extent, NFT is a digital certificate of unique content and cannot be forged.
However, VKontakte does not intend to create its own blockchain, but instead intends to act as an intermediary and assistant, and user-created NFTs can be traded on various NFT marketplaces:
"The history of perfect technology has passed, various platforms have appeared, blockchain has appeared. But there are not enough products to transfer it to users. As the largest service provider in Russia with a large number of users, our task is to provide An NFT that can be easily created from content and then placed on an exchange. We don't intend to choose a certain blockchain to create content, we assume that when creating NFT tokens, endorsed from VK in some way, for us That content is unique to .Users can then transact on various platforms, whether it’s Solanart, OpenSea or any other NFT marketplace.”
Although the current global market valuation of NFT is between 2 billion and 35 billion US dollars, it is expected to grow to 80 billion US dollars in 2025, but the problems of fraud, plagiarism and counterfeiting still cannot be underestimated. OpenSea, the largest NFT marketplace, has said that more than 80% of all NFTs created using its free tools are plagiarized or counterfeit.
To this end, VKontakte will use its existing Content ID system to verify the identity of all music and video creators, both within VKontakte and in the content database:
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Russia Turns to Crypto Regulation
VKontakte’s shift into the blockchain space comes at a time when Russia is establishing a crypto regulatory framework.
Russia, which for years has opposed cryptocurrencies on the grounds that they could be used to launder money or finance terrorism, finally gave them legal status in 2020 but banned investors from using them as a means of payment.
In January of this year, the Central Bank of Russia published a report titled “Cryptocurrency: Trends, Risks, Measures,” which stated that cryptocurrencies are volatile and are often used for criminal activities such as fraud and money laundering. Cryptocurrencies create the risk of weakening national economies by providing a means for private fundraising to withdraw funds from national economies and make it more difficult for regulators to maintain optimal monetary policy.
Therefore, the bank believes that the existing restrictions on the use of cryptocurrencies for payments should be strengthened and that Russian individuals and businesses that use cryptocurrencies to buy or sell products, services or labor should be penalized. A new regulation is needed that essentially bans any crypto-related business in the country, specifically, the issuance of cryptocurrencies and their circulation in Russia must be banned, including exchanges, over-the-counter dealers and peer-to-peer trading platforms.
Regarding the payment use case of cryptocurrencies, the central bank believes that the Central Bank Digital Currency (CBDC), which is currently under development, can meet the future needs of Russians for fast and cheap digital payments, while providing the same benefits as cryptocurrencies without the risks.
Russia’s central bank’s opposition to cryptocurrencies dates back to last August, when the Federal Financial Monitoring Service hired a company to develop cryptocurrency tracking tools to combat illicit activity. In September, the bank began deferring payments to cryptocurrency exchanges in an effort to prevent investors from “emotionally” buying cryptocurrencies. In December, Reuters reported that Russia's central bank was in talks with "market participants and experts" about a possible outright ban.
However, less than a week after the central bank proposed a cryptocurrency ban, the Russian Ministry of Finance expressed the complete opposite attitude, arguing that the ban on cryptocurrency would cause Russia to lag behind in the high-tech industry, and drafted a bill on the concept of regulating the encryption industry , including treating cryptocurrencies such as Bitcoin as investment tools rather than payment tools; classifying all cryptocurrency traders, holders, and investors as qualified or unqualified through banks to determine the upper limit of the amount investors can invest, In order to protect investors; in addition, foreign cryptocurrency exchanges must also obtain a license to serve customers in the country and meet anti-money laundering guidelines.
The bill is currently in its initial stages, with a notification to the government expected in a few weeks and public consultation completed by March 18.
Russian President Vladimir Putin told a meeting of government members that he hoped there would be "some kind of consensus" on banning or regulating cryptocurrencies in Russia over a disagreement between the central bank and the finance ministry. . However, Putin also said that Russia is indeed in a good position to meet the necessary power needs. “We do have some competitive advantages here, especially in so-called mining. I mean the abundance of electricity and well-trained technicians in our country.”
While the Ministry of Finance is pushing for a crypto regulation bill, the Ministry of Economy has presented its proposals for the regulation of cryptocurrency mining. The Ministry of Economy believes that cryptocurrency mining should be considered a business activity and, like Japan and Germany, impose taxes on the conversion of cryptocurrencies into rubles. Mining should be allowed in areas where there is a persistent surplus of power generation. To reduce mining costs for companies, the department proposes lower rates for connecting mines and data processing centers to energy sources and setting low tariffs for grid companies. Therefore, mining The cost of mining equipment and electricity will become very cheap. For this proposal, the Russian Ministry of Energy expressed its support.
Some government analysts estimate that Russia could collect 1 trillion rubles ($13 billion) a year in taxes from the crypto market if the industry were regulated.
It’s worth mentioning that some of Russia’s leading financial institutions have also recently floated their support for the idea of regulating cryptocurrencies in the country. For example, Anatoly Popov, deputy chairman of the executive board of the Russian banking giant Sberbank, agreed with this position and called for appropriate regulatory measures to be taken as soon as possible: all the necessary infrastructure for the crypto market already exists, including brokerage accounts, platforms for digital financial assets.
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NFT becomes a content monetization solution
The integration of NFTs by social media giants has been on the rise in recent months.
When announcing the integration of NFT, YouTube CEO Susan Wojcicki said that Web3 is its source of inspiration and will help creators take advantage of emerging technologies, including NFT, to continue to enhance and enhance the experience of creators and fans on YouTube.
The creator economy is a new model that allows creators to take the lead in obtaining labor income and interacting with users. The original model opposite to the creator economy is that creators rely on distribution platforms provided by brokers and technology companies to connect with users. The distribution platform takes advantage of its advantages in promoting creative works and obtaining user traffic, and actually has master control over the distribution and benefit methods of work resources and user traffic, and brings more advertising services such as inserting some algorithmic recommendations. revenue, so that it does not need to care whether the creator can capture loyal paying fans. This will weaken the effective dissemination ability of the creator's works to a certain extent, and the actual income of the creator will also be reduced because of the intermediary cost, and most of the profits will be obtained by the intermediary.
Industries related to the "creator economy", whether it is literature, music, video or social networking, are facing some difficulties, such as:
- Insufficient income for creators
-Excellent works are buried
-Normalized copyright disputes
Due to the non-tamperable and indivisible characteristics of NFT, and relying on blockchain technology to ensure the uniqueness, authenticity and permanence of digital assets, NFT can map any real assets such as images, music, game props, and any type of content. Can be monetized and give owners more autonomy over content.
The music industry has been quick to embrace NFTs as a solution. Some music NFT platforms have emerged in recent months, and well-known artists from Eminem to The Weeknd have also launched music albums in the form of NFT. One of the immediate advantages is increased opportunities for connection between artists and fans. Whether through rewards, exclusive access, ownership, and more, music NFTs are becoming one of the most powerful tools for music community building and engagement.
According to the "Notice on Further Preventing and Dealing with the Risk of Hype in Virtual Currency Transactions" issued by the central bank and other departments, the content of this article is only for information sharing, and does not promote or endorse any operation and investment behavior. Participate in any illegal financial practice.
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risk warning:
According to the "Notice on Further Preventing and Dealing with the Risk of Hype in Virtual Currency Transactions" issued by the central bank and other departments, the content of this article is only for information sharing, and does not promote or endorse any operation and investment behavior. Participate in any illegal financial practice.
