Markets first mover Asia: NFTs have a ‘digital first sale’ problem
Lately, everyone is talking about the fact that the NFT market continues to grow into the world’s markets like a creeping monster slowly and surely, but why is this happening? As you can see, lately, the digital art world has really become obsessed with non-fungible tokens (in other words, NFTs), which allow creators to digitize their artworks, creating scarcity on them and thereby increasing value. It would seem that everything is cool and no problems are foreseen on the horizon. Still, recently many problems have rushed into the market, they have fallen like an avalanche and many NFT enthusiasts simply do not have time to figure them out.
The NFTs Asia market is one of the dominant ones, but alas, even there there are problems that threaten the growing popularity of the NFT. For example, the growth of China’s tokens led to a severe decline in the market and investors began to worry about the prospects for NFTs. In this article, we will take a closer look at the problem of the “first digital sale of NFTs.” and consider how it will affect the NFTs Asia market.
China Tokens Lead to Declines
At the beginning of 2023, the NFT faced a very serious problem for the entire market, this is due to the growth of Chinese tokens. It would seem – well, they grow and grow, not weeds. Why should they interfere? But alas, things are not so straightforward, these tokens are often traded on exchanges that are not regulated by the state and have led to a decline in the general market as investors worry about the risks associated with investing in these tokens. As a result, the significant trade balance figures for January and February 2023 were weak, to say the least, with many questioning the viability of the NFTs Asia market.
NFTs’ “Digital First Sale” Problem
Another relatively large and significant issue facing the market is the NFTs digital first sale. As you know, NFTs are unique digital assets, the peculiarity of which is that they can only be owned by one person at a time. However, since all this is in the digital space, they can be copied very easily. Simply put, nothing prevents you from simply creating an identical digital copy and selling it as if it were the original.
Of course, all this is easily verified because each NFT manufacturer usually has an account on the official website or on the same marketplace, but the problem is still quite unpleasant.
The problem of the NFTs digital first sale. It means that NFTs constantly face serious problems in terms of cost and scarcity, if people can easily create copies of NFTs what makes them valuable or scarce? This problem is particularly acute in Asia where we know there is a long history of piracy and intellectual property theft.
Double-Spending and Blockchain
One of the ways that the NFTs digital first-sale problem is being addressed is through the use of blockchain technology. Blockchain is a distributed ledger technology that allows for secure, transparent, and tamper-proof transactions.
When an NFT is sold on a blockchain, the transaction is recorded and cannot be altered or deleted. This means that the original owner of the NFT can prove their ownership, and there is no risk of double-spending.
However, not all NFTs are sold on a blockchain, and this is where the “NFTs digital first sale” problem remains. There is still a risk of double-spending if the NFT is not sold on a blockchain, and this is a serious problem for the NFT market.
What are the Issues in Silvergate, and How Does it Relate to NFTs?
Silvergate is one of the important reasons why the NFT market will fall in 2023, but why? Let’s take it one step at a time, Silvergate is a bank that specializes in providing various financial services in digital currency. In February 2023, there was news that Silvergate had huge problems as its customers start to transfer to other banks. This instability and swing of the NFT market have led to sad consequences because many NFT platforms used Silvergte to process transactions.
All the troubles in Silvergate are related to the NFTs digital first sale; problem, because if there is no way to prove ownership of the NFT, then there is a risk of double spending, and this can lead to very tangible financial losses for companies. Problems at Silvergate Highlight Need for Transparency and High-End Security in the NFT Market
Who Have Silvergate Customers Switched To
It all started with a shutdown of Silvergate Capital Corp. that lasted almost 24 hours (financially a disaster) and it dealt a severe blow to NFT trading platforms that relied on banking APIs for their transactions. This unfortunate incident marked the beginning of the end of the NFT market cooperation with Silvergate and many traders started looking for an alternative, one of the brightest alternatives is Signature Bank.
More specifically, according to a CoinDesk report, Signature Bank CEO Joseph DePaolo said during an earnings call that the bank has attracted new cryptocurrency customers, including NFT platforms. He further stated that the bank is actively attracting cryptocurrency firms as clients and is ready to provide them with high-quality services.
Data on the Balance of Trade Figures for January and February 2023
Let’s dive a little deeper into the statistics – according to the latest trade balance figures, the Asia-Pacific region continues to lead the cryptocurrency market significantly, with China and Japan accounting for the largest share of trading. This trend is expected to continue despite everything, as more and more investors in the region enter the market, including those who want to invest in NFTs.
However, the NFT market is still relatively new and very often faces difficulties, so it is not completely known how it will work in the long term. Given the concerns over the issue of first digital sale and the need for reliable banking partners, the market must try to address these issues in order to ensure its ultimate sustainability.
In conclusion, let’s be honest – the Asia-Pacific region has proven to be a key player in the cryptocurrency market, as the last samurai this region fights for its existence during the crypto winter. The NFT market is also gaining momentum in the region and platforms are gradually emerging to meet the growing demand for NFTs.
Despite these advantages, as we can see, NFT also has a number of problems, for example, the problem of digital sales or the need for reliable banking partners. These issues need to be addressed to ensure the long-term and sustainable operation of the market.
As the market continues to evolve, it is essential for traders, investors, and platform operators to keep abreast of the latest developments and trends, thanks to our articles, you can quickly and easily understand the essence of the latest developments in the world of NFT.
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