28/06/2021 NFT is not cryptocurrency, Ant Group says amid crackdown

Chinese giant says fungibility differentiates digital asset from altcoins
Ant Group has released a statement explaining the differences between cryptocurrencies and non-fungible tokens (NFTs) after a successful sale of digital artwork on its Alipay platform sparked questions about whether the company was violating China's cryptocurrency rules.

"NFTs are not interchangeable, nor divisible, making them fundamentally different from cryptocurrencies such as bitcoin," according to a statement posted Thursday by AntChain, an Ant Group unit focused on blockchain technology.

An NFT is a unique digital asset, whose ownership and authenticity are tracked on a blockchain. For example, Twitter co-founder and CEO Jack Dorsey created an NFT of his first-ever tweet and sold it for $2.9 million earlier this year. While anyone can grab a screenshot of that tweet online, the idea is that making it into an NFT transforms it into a unique item, like a book signed by its author, but with ownership and transaction history verified and recorded on a blockchain.

NFTs became an issue for Ant Group when two NFT payment barcode "skins," each limited to 8,000 copies, were put up for sale on Alipay. Both sold out within minutes on Wednesday, an Ant Group spokesperson told Caixin. The skins were designed by the Dunhuang Art Institute, with technology provided by AntChain.

Because NFTs are usually created, bought and traded on public blockchains, the sale prompted some on social media to question whether Ant Group had contradicted China's increasingly strict cryptocurrency regulations.

"Didn't [Alipay] just issue a statement that it was cracking down on crypto trading? Doesn't this move contradict that?" one social media user asked.

In its statement, Ant Group pointed out that fungibility is the key difference between NFTs and cryptocurrencies. While bitcoin is interchangeable, NFTs are not. Even copies of the same NFT are unique digital items on the blockchain.

Because the technology can turn just about anything that can be digitized into a collector's item, NFTs allow artists to monetize, market and protect their digital creations, though its uses can go well beyond artwork. "NFTs can be associated with different types of digital assets, such as concert tickets, licenses and music," AntChain said.

And because ownership can be tracked and verified, NFTs provide creators with a way to protect their intellectual property, an AntChain spokesperson told Caixin.

Alipay's adoption of NFTs could signify a new channel for Chinese users to buy digital artwork with yuan -- and possibly in the future, the digital yuan, industry insiders said.

"Given those blockchain initiatives and proof of concepts have been supported at the government level and that NFTs are not cryptocurrencies, we are not surprised that companies with a large digital presence and customer base are experimenting with NFT-like technology," said Matthew Graham, CEO of Sino Global Capital, a Beijing-based venture capital company that invests in blockchain technology.

Alipay, with more than 1 billion annual users globally, is an attractive platform for bringing blockchain-based products to the masses, he said, adding that the move could prompt other competitors and stakeholders to enter the space as well.

Still, Ant Group's response indicates that it wants to show it is strictly complying with China's protocol for supporting blockchain technology while avoiding virtual currencies.

Citing risks of criminal activities such as illegal cross-border asset transfers and money laundering, China has been ramping up efforts against cryptocurrencies in recent years.

Authorities have ordered the close of Bitcoin mining operations in major hubs, including the provinces of Sichuan and Qinghai, as well as the Xinjiang and Inner Mongolia autonomous regions.


Interesting NFTs
Lovers and unravelled obi, from the series Picture-book Models of Couples
Katsushika Hokusai (1760-1849) Lovers and unravelled obi, from the series Picture-book Models of Couples 1812 - Japan
José Delbo sent me his striking pencil sketch and powerful inked work, which I then interpreted in oil on canvas. I wanted to create a very painterly piece with obvious brush marks etc, but I was also aiming for a nostalgic feel, a kind of 1980’s superhero comic book look, the kind I grew up with. My goal with this animation was to try to recreate, in part, the creative process that both artists went through with the visual information I had. I was able to showcase my painting process more accurately as I could take photographs of my progress throughout. Consecutive images could then be layered like brush strokes over José’s drawing to create the impression that this was one continuous artwork from pencil, to ink, to completed painting. The representation of the line sketch at the beginning, then pencil/ink and lastly the paint layers being applied demonstrate both artists’ struggle for the right lines, tone, form, and colour until the work is finally completed. As the oil was still wet with each photograph the glare of my studio lights can be seen in the brush strokes. Eventually, the figure emerges and as it does, our hero comes to life, looking directly at the viewer -- but is he grimacing in approval or disgust? We will never know for sure as just before he can say anything, white paint is brushed across the canvas entirely and the process begins again. Only the bat is quick enough to escape.
Oh hi! I'm Nermal. I'm often referred to as the Bart Simpson of the group. I like to listen to Frank Sinatra while grooming. Don't judge me. I hope we can be brilliant friends.
No Future #9/15
The Pixel
The Pixel is a single pixel statement. It is created to validate. The Pixel is a digitally native artwork visually represented by a single pixel (1x1). It is a token that signs the most basic unit of a digital image in a traditional global auction house. It is a tiny mark to carry digitally native art to a potential future history.