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Is China’s fear of banning NFTs a positive indication for investors?

China’s contradictory signals about its local NFT business have investors perplexed about the market’s future prospects.

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#nft #nfts #china

It’s no secret that China despises all things crypto, as seen by its decision to prohibit the entire digital asset market outright last year. Despite the restriction, one segment of the crypto sector has thrived in the region: the nonfungible token (NFT) market. However, this may not remain the case for much longer with recent bad developments.

Many local social media platforms and internet companies have continued to amend their policies to restrict and, in some cases, altogether remove NFT sites from their networks, citing a lack of regulatory clarity but, more crucially, fearing a government crackdown on their daily operations.

For example, WeChat, a Chinese instant messaging and social media service with over 1 billion active users, recently removed Xihu No.1, one of China’s most popular NFT ecosystems, from its platform, citing a violation of its active rules of service. Other projects, notably Dongyiyuandian, were targeted in the same way.

In a similar line, in a recent policy update, the Ant Group-backed WhaleTalk, a collectable digital platform, doubled the penalty for persons using its over-the-counter desk for the purpose of NFT trading.

In China, ambiguity reigns supreme when it comes to NFTs

While the usage of cryptocurrencies is prohibited throughout mainland China, the Xi Jinping dictatorship has shown no intention of prohibiting the use of NFTs until recently. The fact that Chinese commercial behemoths like Tencent and Alibaba have applied for multiple new NFT patents in the last year exemplifies this.

However, like with any growing market, the increased popularity of digital collectibles in China has led to severe price speculation and consumer fraud incidents. To date, the rise in unlawful transactions and bot purchases associated with NFT platforms has prompted numerous digital behemoths to take preventative steps that are likely in their best interests.

In fact, numerous local firms continued assisting crypto transactions after China’s blanket crypto ban was announced last September. As a result, WeChat and WhaleTalk’s actions appear to be legitimate, especially given that they are most likely attempting to escape any regulatory attention from the Chinese government.

Finally, while NFTs are not necessarily outlawed in China, its residents are prohibited from engaging in any type of speculative trading involving digital collectible-derived tokens, putting NFT issuers and owners in a difficult position.

Experts weigh in

Tencent and Ant Group’s shift in policy on how their users interact with NFTs is not surprising, according to Philip Gunwhy, partner and brand strategist for prominent NFT platform Blockasset.co, who added: “In order to gain a competitive advantage within the confines of China’s existing legislative framework, tech giants must reposition their platforms.”

“The government has not yet made NFT trading illegal, as the laws are still being ironed out. Even if Chinese authorities do eventually restrict NFTs, innovators and investors would benefit because it took nearly a decade for the government to finally outlaw Bitcoin mining and crypto transactions on its soil. The NFT market is constantly expanding, and patent filings from big internet businesses in China should be regarded seriously.”

The fact that the government has not restricted interaction with NFTs, despite their current popularity, shows that the approach taken with cryptocurrencies may be significantly different, according to Gunwhy. “In any event, Chinese officials are keeping a careful eye on the progress of NFTs,” he stated.

While the Chinese government is hostile to digital currencies, Haris Sevinç, chief technology officer of The Unfettered — a blockchain game based on NFT and metaverse concepts — believes that the country’s obsession with blockchain technology has allowed investors to continue to harness the power of non-crypto technologies like NFTs.

He believes that large internet businesses’ actions to change their rules are purely motivated by a desire to avoid regulatory action because defying the government will almost certainly result in a fine or a ban. Sevinç continued:

“Because the NFT ecosystem is still in its early stages, most regulators are only warming up to this idea and trying to assess its prospects. If authorities implement a positive form of regulation in the NFT space, these tech giants [Tencent and Alibaba] will be among the pioneers of the future of Web3 in China. In that case, the patent bets will keep coming in.”

In China, the future of NFTs could be shattered

According to Ben Caselin, head of research and strategy at crypto exchange AAX, “NFTs are relatively tolerated in China” at the moment and are being classified and sold as digital collectibles. “These are issued on more restrictive hybrid or permission blockchains,” he explained, “which preclude holders from speculating on secondary markets.”

While these domestic markets may prosper for a time, permission NFTs, in Caselin’s opinion, lack many key features or advantages, such as ownership, and hence do not profit from the same dynamics as mainstream NFTs.

When it comes to the Chinese market, Jake Fraser, head of business development at Mogul Productions, a decentralized film funding and movie-based NFT platform, believes there are still plenty of opportunities:

“There will always be regulatory changes and firms revising their practices, but innovation will continue to happen.” Gamification is one area of their NFT industry that is gaining traction. It’ll be interesting to see how this plays out in different scenarios.”

Finally, Fraser stated that trading NFTs is still a fresh concept around the world and that no countries have implemented real rules to date. Although like with initial coin offerings, he believes law is unavoidable, he believes the advances will be “quite positive for the sector” as long as innovation is not impeded.

Not everyone is in agreement

Despite Caselin’s claims that NFTs are on a short leash in China, Vijay Pravin Maharajan, the founder and CEO of bitsCrunch, an NFT-focused analytics firm, told Cointelegraph that the list of NFTs being transacted in yuan continues to grow, and that the Chinese government will soon accept the asset class.

“The market is feasible because of the strict laws and agreements that have been formed surrounding NFTs and digital collectibles. The Chinese government is working to make NFTs as safe and regulated as possible. There’s no doubting that [China] is a pioneer in the field of blockchain technology. As a result, we may soon see a glimpse of Web 3.0 from them.”

According to Maharajan, China is embracing NFTs by making its infrastructure “independent of cryptocurrencies,” contrary to popular belief. He argues that disrupting the existing NFT framework and adopting a new business model is acceptable because these services are unique and may be minted, distributed, and transacted in a variety of ways. “Even though it may appear to be a slow start,” he said, “we are seeing a positive trend with the acceptance of NFTs so far, regardless of crypto restrictions and their consequences.”

As we go into a future dominated by decentralized technologies like NFTs, it will be interesting to see how China, as a key financial mover and shaker, continues to evolve its digital worldview and regulate these assets.

NFT

To Be Sold for $70 Million, with Proceeds Used to Support NFT Purchases at MoMA

The auction of works by Renoir, Picasso, Bacon, and Rousseau will help the museum increase its online presence and maybe buy NFTs.

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This fall, the William S. Paley Foundation will hold an auction featuring works of art valued at at least $70 million in order to increase the digital presence of the Museum of Modern Art (MoMA) in New York and possibly acquire the institution’s first NFTs.

Since the passing of the co-founder of CBS in 1990, William S. Paley’s collection has been maintained by MoMA. Sotheby’s has been hired by Paley’s namesake organization, which includes endowment funds for museums and educational and cultural activities, to auction off 29 of the 81 items in the MoMA collection.

The sale proceeds will go toward growing the museum’s online presence. MoMA’s director Glenn Lowry stated in the Wall Street Journal that the museum had suggested several potential uses for the funds.

MoMA may start its streaming service, organize online exhibitions and video discussions with artists, or work with colleges and training organizations to offer online courses. More importantly for cryptocurrency enthusiasts, MoMA might also buy its first NFTs.

According to Lowry, the museum has a dedicated team monitoring the digital art scene to hunt for suitable artists to collaborate with or buy from.

In the interview, he added of NFTs, “We’re aware that we lend an imprimatur when we acquire things, but that doesn’t mean we should shun the domain.

What’s on offer?
The William S. Paley Foundation and MoMA have an agreement that gives MoMA the final say in how the collection is used. Other humanitarian endeavors championed by the late Paley will receive a tiny share of the proceeds from the autumn auction.

Most of the collection’s most famous works, such as Picasso’s “Boy Leading a Horse” from 1905–06 and Matisse’s “Woman with a Veil,” are not for sale. Rousseau and a Renoir, on the other hand, will be sold at auction, according to Lowry.

According to Sotheby’s, Francis Bacon’s “Three Studies for a Portrait of Henrietta Moraes” will be auctioned for at least $35 million in London in October, and Pablo Picasso’s “Guitar on a Table” will be sold for at least $20 million in New York this November.

It’s anticipated that the collection would bring in between $70 and $100 million.

Despite not yet owning a tokenized work of art on the blockchain, MoMA has already contributed to the development of NFTs. The MoMA gave all of its collection’s information in November of last year to the Unsupervised exhibition and NFT project by AI artist Refik Anadol.

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NFT

How NFT Projects Are Setting Up For Ethereum’s Network Shift to Stay Ahead of the Merge?

This week is finally predicted to see the occurrence of one of the most important occurrences in the history of cryptocurrencies. 

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The blockchain network will completely switch from its existing proof-of-work consensus process to the proof-of-stake model thanks to Ethereum’s significant software upgrade, known as The Merge. Ethereum is anticipated to carry on as usual, except that PoS authentication of cryptocurrency transactions will now be used instead of PoW.

Ethereum.org states that “The Merge signifies the combining of Ethereum’s new proof-of-stake consensus layer, the Beacon Chain, with its existing execution layer (the Mainnet).” It does away with the necessity for energy-intensive mining and instead uses ETH stakes to safeguard the network.

Sustainability, scalability, and security are the three key areas of concern that The Merge seeks to solve. Researchers at the Ethereum Foundation claim that the new architecture not only paves the way for future scaling improvements like sharding but also significantly cuts Ethereum’s energy consumption by more than 99% because miners won’t have a financial incentive to run computers constantly.

Further modifications to the NFT market are anticipated due to the switch from proof-of-work to proof-of-stake. The Merge may improve the tokenomics of the entire market, broaden the range of cryptocurrencies it supports, and potentially raise the price of NFT.

The bulk of NFTs are a part of the Ethereum blockchain, and many people are enthusiastic about the switchover because it is anticipated to use less energy, allowing users to mint and sell NFTs in a more environmentally friendly manner. However, other users worry that, as with every substantial technological change, there may be a chance for fraud, hacking, volatility, and confusion.

Do you have safe NFTs?
Due to duplicate NFTs existing as a result of the ETH proof-of-work chain and other future forks, it may be unclear which assets are “official” or “real.”

There is a chance that there will be two different types of NFTs when the merge is finished because Ethereum is projected to have at least one proof of work (PoW) fork that will continue to exist. Thus, NFT owners can experience a problem known as a “replay attack.” When a transaction is finished on one blockchain and then repeated on another, this occurs.

OpenSea, the largest NFT market, and well-known companies like Yuga Labs, the company behind the Bored Ape Yacht Club, have officially said that they will not accept the identical NFTs that are present on these chains. In a similar vein, Proof, the startup that is in charge of the Moonbirds NFT project, has stated that it will neither acknowledge or support any forks that are made after a merging.

The Merge will quickly establish itself as the dividing point between PoW-era and PoS-era NFTs. One of the first projects to launch during Ethereum’s new phase will be Supercute World’s SELFi3STM NFT collection. The project will be powered by Web3 developer platform, Alchemy, and will showcase the company’s new full stack NFT development capabilities.

Nikil Viswanathan, cofounder and CEO of Alchemy, stated, “Our objective has always been to bring web3 to a billion people, and we see NFTs being a crucial driver of that adoption.” We’ll keep investing in our full-stack NFT development offering and supporting innovative, exciting new projects like Supercute World to help reach that aim.

The first completely inclusive NFT initiative is SELFi3STM by Supercute WorldTM, which offers male, female, and gender-neutral variants so users can develop and represent the greatest versions of themselves online. Without ever changing the rarity score, holders will be able to select the best version of themselves.

The upcoming collection of 7,777 SELFi3S from Supercute World is anticipated to debut in October. Visit the website and follow the project on Twitter to keep up with developments and learn more about Supercute WorldTM.

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ART & COLLECTABLES

Ford is getting ready to enter the Metaverse with digital cars and NFTs

A month after the company announced significant personnel reductions, it has filed a trademark application covering its future initiatives in the Metaverse and NFT space.

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Ford Motor Company, an American automaker, has filed 19 trademark applications across its key automobile brands as it prepares to enter the realm of nonfungible tokens (NFTs) and the Metaverse.

Mike Kondoudis, a trademark attorney licensed by the United States Patent and Trade Office (USPTO), disclosed in a tweet on Wednesday that the business had submitted a total of 19 trademark applications covering its car brands, including Mustang, Bronco, Lincoln, Explorer, and F-150 Lightning, among others.

The trademark applications include a projected online marketplace for NFTs and virtual versions of its businesses’ automobiles, trucks, vans, SUVs, and clothes.

Ford intends to produce digital images of its vehicles, SUVs, trucks, and vans that will be verified by NFTs, according to USPTO filings submitted by the automaker on September 2.

The business also disclosed plans for “downloadable virtual commodities,” or “computer programs,” that would include apparel, accessories, and parts for vehicles for usage in “online virtual environments,” such as virtual and augmented reality trade exhibitions.

Additionally, there are plans to develop an online marketplace for “others’ digital artwork” as well as “online retail shop services featuring non-fungible tokens (NFTs) and digital collectibles.”

Less than a month after Ford Executive Chairman Bill Ford and CEO Jim Farley announced significant personnel reductions from its global workforce to decrease corporate expenses; Ford has decided to enter the Web3 area.

Ford isn’t the first automaker to enter the Metaverse market.

While premium automakers like Bentley and Lamborghini have already launched NFT collections, automakers including Nissan, Toyota, and Hyundai have indicated ambitions to enter the fast-expanding Metaverse market.

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