Weird things about NFT in China
In early January 2022, when an engineer in Hangzhou named Simon Gao decided to enter a lucky draw to buy a digital photo on Bilibili, he did not expect the process to be so difficult.
The video-streaming platform sets a high bar for potential buyers, requiring those who purchased in the last year to log into the website every day. Gao qualified, but he still couldn’t afford the dove NFT painting.
Like elsewhere, the Chinese are also very interested in the explosion of the NFT market. However, the Chinese government remains wary of the technology, leading to an unwritten rule among companies not to use the term NFT but to use the more neutral term “digital collection”. Many Chinese tech companies now offer their own digital collections on blockchains.
Along with other technology “giants” such as Tencent, Alibaba, Bilibili is the latest to enter this field. Last year the company launched its own NFT trading platform as the NFT market heated up in China. In addition, JD.com, Baidu and Xiaomi also participate in the sale of digital collections.
However, unlike NFTs that are sold on the world’s public blockchain, NFT products created by Chinese companies cannot be sold for profit. Because China is still sensitive to crypto products. The country’s regulators argue that digital products such as Bitcoin and other volatile digital assets cannot become tools of speculation.
But in reality, according to the South China Morning Post, these restrictions have not dampened Chinese consumers’ enthusiasm for digital assets. Many of the digital collections created in China were purchased “within minutes” after launch.
“You have to be fast to buy a digital collection”, a graphic designer in Shenzhen named Felix Huang who has just bought 10 digital collections. “If you can’t buy it in the first 10 seconds after it’s released, you can barely afford it,” Huang said.
The entry of the big guys
As the NFT market “heats up” globally, some Chinese technology companies have started using the terms to name this product. Last June, Jingtan – a blockchain platform formerly known as Antchain developed by Ant Group, a subsidiary of Alibaba – released two “NFT payment token interfaces” called “Dunhuang Feitian”. . The work is based on ancient Chinese paintings and can be displayed as the background for Alipay payment codes. Two months later, Tencent also launched the NFT Magic Core app, or Huanhe in Chinese.
Until now, Jingtan is still one of the most famous NFT platforms in China. Since last summer, the platform has released dozens of different digital collectibles in the form of paintings, music, 3D models, etc. Each product is available in a limited and regular number of NFTs. sold out in seconds.
Wang Yongxu, an artist at a studio at Peking University, started creating NFTs for his traditional Chinese paintings last October and selling them on Ali Auction, Alibaba’s built-in auction platform.
“Compared to Alibaba’s auction platform, which only allows the sale of digital paintings, Jingtan has a unique advantage, as it publishes a variety of products and has a broader user base,” Wang said.
On OpenSea, the world’s largest NFT marketplace, most NFTs are sold on the Ethereum blockchain and purchased with ether. The decentralized nature of such open blockchains has Chinese authorities concerned about systemic financial risks. So digital collections in China are purchased in yuan, and purchases on Jingtan are paid for via Alipay. This is the core difference between how NFTs are sold in China and abroad.
This difference partly stems from the regulatory environment in China which considers all crypto-related activities including mining and trading illegal.
Returning to the case of Gao, he currently owns 3 digital collections on Jingtan including a 3D torch model of the 2022 Asian Para Games. Gao also said that the value of these properties is still modest cost.
“For me, these NFTs are just three photos right now. They can’t be used under any circumstances and can’t be converted to cash due to a 180-day transfer restriction,” Gao said.
Jingtan allows NFT holders to transfer their assets to another party 180 days from the date of purchase. The second owner can only transfer the property after 2 years. However, the sale of NFTs for money is still prohibited, and ownership is limited to mainland China residents aged 14 and over.
Bilibili said they will launch this transfer function in the future. But Tencent, JD.com and Baidu do not have this function yet.
A black market for NFTs has also emerged. Searching for “NFT” or “digital collectibles” on Alibaba’s Xianyu digital flea market yields no results, but a search for “Dunhuang” shows many potential buyers willing to spend around 3,000 yuan. currency ($470) for one of the NFTs on Jingtan, 300 times the original price.
Due to regulatory restrictions and difficulties in purchasing them, Gao is considering giving up on purchasing these collections. “After all, what is the value of these three photos that I can’t sell them,” he said.
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