Signs of collapse are brewing, and we need to be vigilant against copycat domestic digital storage platforms

Following the analysis of the current status of domestic digital collection platforms last week, within just one week, the author began to discover that many newly established and unknown digital collection platforms began to go online one after another, and followed the cryptocurrency exchanges’ gameplay of attracting new users, posting advertising posters in major communities to achieve the purpose of attracting new users. At this time, problems occurred on two digital collection platforms, which further attracted our attention.

Opportunities for the growth of domestic digital collection platforms

From the beginning of last year when Alibaba and Tencent started to develop digital collectibles, to the end of last year, there were actually relatively few digital collectibles platforms in the market. At the same time, these digital collectibles platforms all had relatively good backgrounds. Therefore, if players participated in and played a few times, there was actually no problem. Moreover, people were not very interested in domestic digital collectibles, and many digital collectibles could not be bought, sold or transferred. Therefore, this market was not very large, and the encryption circle did not interfere with each other. Everyone played their own games, which was a relatively good situation.

However, things have changed since the beginning of this year. In the first quarter of this year, overall cryptocurrencies in the crypto market fell across the board, but the NFT field stood out. NFTs represented by Bored Ape continued to attract the attention of investors. At the same time, coupled with reports from traditional media, digital collectibles have sparked a lot of discussion outside the circle. At this time, domestic digital collectibles platforms also began to spring up like mushrooms after a rain and went online one after another. It was not until March and April that they reached a relatively high level of popularity. Until now, many digital collectibles platforms are still planning or in the process of going online.

In fact, the mushrooming of domestic digital collection platforms is relatively easy to explain. Last year, the over-the-counter prices of digital collections on digital collection platforms with backgrounds skyrocketed, which made many people see the "opportunity", so they began to invest in this field and make arrangements. In addition, the relevant product code writing and operation were launched. In fact, they started planning in January and February, and it is understandable that they reached the peak in April and May. In this way, we can basically confirm that this wave of explosive growth of domestic digital collection platforms started at the beginning of this year.

Current problems of domestic digital platforms

According to media reports, there are currently more than 200 domestic digital collection platforms, which is a staggering number. At the same time, there are also some problems with domestic digital collection platforms that we need to conduct serious analysis.

1. Operational qualifications

At present, digital collection platforms are still a relatively new product in China, so there are no relevant laws and policies to regulate them. This has led to the mushrooming of many domestic platforms, but operating qualifications are still an issue that many people are concerned about. Therefore, we need to be vigilant. If the country introduces relevant regulatory policies in the future, it is bound to cause a wave of closures of some platforms.

2. Market demand and supply

Theoretically, the production cost of digital collections is very low, because it is somewhat different from the efforts behind traditional paper paintings or physical works. Digital collections can have countless copies and countless publishers. There are even many that make photos of existing physical objects into digital collections for sale. In the long run, this is bound to increase market supply, and the demand side of the market is uncertain. Therefore, there will inevitably be a wave of clearance process in the end, that is, junk collections will be defeated by high-quality collections and eventually exit the stage.

3. The cost of digital collections

Theoretically, the cost of domestic digital collections is very low, and there is even a trend of disorderly market development. We all know that most people in China have a weak sense of copyright. When you buy a digital collection, it does not mean that the copyright of the collection is in your hands. Therefore, for the issuer, the digital collection is actually just a replica of a real copyright file. The only difference between this replica and other replicas is that it has a different number, which has no cost.

Let’s look at foreign NFTs. Each NFT should be a unique picture. Although there are scripts for batch generating avatars, what is finally presented to the audience is an NFT, which is a picture. Of course, some NFTs for special purposes, such as game props, are still similar to domestic digital collections, but game NFTs are application scenarios, which is different.

Therefore, the production cost of domestic digital collections is actually quite low. Under this condition, the input-output ratio will be very high, which will naturally attract many "entrepreneurs" to invest in it.

In this way, actually creating a domestic digital collection platform is a very profitable or high-return thing. However, when these entrepreneurs actually do it, they find that hype is the most important thing. As long as the collections are hyped up, they can attract many participants, and then the platform will get the opportunity to make money from it.

In addition, many communities have recently started to post event advertisements, either for registration airdrops or invitation rebates, etc. These all have more or less traces of the currency circle. At this time, we will find that these domestic digital collection platforms are actually the same as the countless small cryptocurrency exchanges in 2019. In the end, they may use a routine similar to cutting leeks, and now there are signs of this.

For example, in situations similar to the one above, many crypto investors should have the feeling that the copycat exchanges have run away. Investors who have experienced the wave of exchanges running away should be impressed. Those exchanges basically use some routines, such as investment losses, seizures, technical failures, hacker attacks, etc. Some even directly say that they have run away, or run away quietly, etc., which are all impressive.

Of course, from the current perspective, it may take some time for a large-scale collapse to occur, because many platforms have just been launched, but there are already some signs. For investors here, a gentleman does not stand under a dangerous wall. When we see the existence of problems, we should stay away from those unreliable new platforms in time. Even if we want to participate, we should find a leading platform with certain strength to participate in it. This can at least reduce most of the risks and ensure our legitimate rights and interests.

Summarize

In general, the market does not actually need so many digital collection platforms. Generally, there are only three or four platforms that can stand out in an industry. In the financial field, there are even fewer and stricter ones. If the digital collection platform is open for trading, it will be a financial product with trading attributes, which will inevitably attract the attention of the country. Therefore, the collapse of a large number of exchanges is inevitable. Supervision will surely come later, and for investors, the most critical thing is to recognize the current situation in a timely manner.