Development Status and Future Trends of Emerging NFT Market
The SciEcon AMA interview with Dr. Dustin Becker
About Dr. Dustin Becker:
Figure 1: Dr. Dustin Becker
Dr. Dustin Becker recently joined Bochsler Finance in Zurich, Switzerland, after completing a PostDoc at ETH Zurich. He originally studied mechanical engineering and pursued a Ph.D. in the field of medical engineering. He’s always been interested in novel applications and interdisciplinary fields, recently motivating him to enter the blockchain space. Currently, he’s working as a Junior Analyst, researching blockchain applications with a focus on the Internet Computer Protocol.
Watch our AMA interview for Dr. Dustin Becker on our YouTube channel, SciEcon.
Read the Interview Scripts with annotations and references:
Opening Remark
Prof. Luyao Zhang:
Today, we are very glad to have Dr. Dustin Becker here for our AMA interview. Dr. Dustin Becker recently joined Bochsler Finance, Zürich Switzerland, after completing the postdoc at ETH Zürich. Currently, he is working as a junior analyst researching blockchain applications, focusing on Internet Computer protocol (IPC). We are very much looking forward to hearing his insights on blockchain and Internet Computer. Today with me, we have Yufan and Zichao, who are the leaders for the SciEcon NFT Research Lab. Then let’s start our interview.
Questions 1
Zichao:
We noticed that you focused on medical engineering for doctoral studies at ETH based on your LinkedIn profile. What interests you in the blockchain world, and what motivates you to become an analyst at Bochsler Finance Solution and a Researcher at ICP Global Fund?
Dr. Dustin Becker:
I really enjoy working in this cutting-edge kind of field where you have no inhibitions taking place.
As you already said, I just very recently actually entered into the blockchain space — it must have already been at the beginning of November. Therefore, everything is also pretty new for me, and very exciting so far.
In fact, before entering full-time into blockchain and starting at Bochsler Finance, I was already following along the blockchain space for a couple of years. Thus, it’s not entirely new for me, but I’ve been doing it mainly on a hobby- and investment-side, following along with what’s been going on. When I finished my Ph.D. and was working as a postdoc, I had been thinking a lot about what I wanted to do and how I wanted to continue my career. I realized that I really enjoy working in this cutting-edge kind of field where you have no inhibitions taking place. I have enough interest in the blockchain personally, and this field could be my possible career paths. Therefore, I ended up finding the advertisement for this job application. Somehow I ended up here — I never expected this, but this is a great opportunity. So far, I am quite enjoying it. It’s a very interesting field and an exciting work environment to be in.
Questions 2
Yufan:
After many years of rapid growth in the blockchain industry, NFTs rose rapidly at the beginning of this year. As a junior analyst at Bochsler Finance, which is an asset manager specializing in the blockchain industry and decentralized finance, what do you think about the current NFT market in terms of the most significant flaws and weaknesses and its possible future development?
Dustin:
While the boom of NFT has a lot of opportunities, it also always brings along fraudsters.
The NFT marketplace right now is quite similar to the ICO boom four years ago, where you had a lot of different projects coming up with a lot of ideas. Many ideas and projects were great but a lot were also not very well-founded, and people just popped up websites trying to get funding for the ICO, and then never delivered on their promises. This is also the risk right now within the whole NFT market, which is booming and hype right now. It has a lot of very cool possible applications and a lot of opportunities while this also always brings along fraudsters, who try to take advantage of this. This is certainly a significant risk of NFT. People have to know what kind of projects they are getting into, and the risk of falling for certain fraud exists. Moreover, when getting an NFT, it is not easy to know whether you’re not buying a counterfeit copy or an original one. This is certainly a risk, but luckily there are also solutions to this, at least for certain aspects. For example, Origyn, which is also developed on the IC layer, is going to do the KYC of the customers and the artist. Therefore, it can actually prove who you are as a person, which can also reduce the risks of people misusing the system. I think it always has pros and cons, but this is a way to approach this.
It is an ongoing debate on the topic of regulation on cryptocurrency.
Other risks with NFTs like money-laundering make it very easy for people to misuse the whole system. For example, suppose you have set up two accounts, you can buy an NFT cheaply, and then buy it from yourself for a much larger amount. You can just say that this is how I earned this money. This situation is certainly an aspect that is also quite risky. These stories come up, and it always puts a bad light on the blockchain, cryptocurrency, and NFT space. Therefore, NFT certainly also needs some form of regulations and a possible solution to this is KYC. The whole topic of regulation is very tricky right now in cryptocurrency because there’s not much regulation in place yet — it’s an ongoing debate. For example, the US congress is continuously discussing on how to regulate blockchain and cryptocurrencies.There’s certainly some regulation needed in the future and we will see where this will takeus, but this will also bring more certainty and reduce the risks for the whole NFT space in the future.
Zichao:
What do you think about the marketplace’s popularity now? Do you think the rapid growth of the NFT market will keep going? If so, for how long?
Dr. Dustin:
If I knew this, then I could make a lot of money, but I guess nobody knows. It’s a hype and a big boom right now, which certainly will not go on like this forever. There will be a correction at some point or maybe it goes on for a lot longer. Like I said, I just recently started and I’m certainly no expert. I also don’t have a crystal ball where I can look into the future.
Questions 3
Zichao:
Besides Ethereum — the birthplace of NFT, many other blockchains also built NFT functions. For example, Polygon, Flow, Binance Smart Chain, Tron, etc. What do you think are the pros and cons of developing NFT on various blockchains, especially compared to the developer experience, efficiency, scalability, and security on the Internet Computer?
Dr. Dustin:
A big problem that some of the blockchains have is scalability.
I have limited experience developing on any blockchain really. From my understanding, so far, it’s really a big problem that some of the blockchains have is simply the scalability. Many blockchains are trying to solve this, especially with the immense gas fees of Ethereum. However, I haven’t developed on these other blockchains. Currently, I’m learning a bit of Motoko on the Internet Computer but I don’t know about the specifics of the other blockchains. However, the big difference that I see, especially so far with developing NFTs on the Internet Computer compared to other ones, is where the asset of the NFTs is actually stored. One part of all the other NFT marketplaces on the other chains, at least what I saw so far, is that the asset itself of an NFT is stored on the classical web and on multiple web services, or IPFS services. You want to have complete Web3.0 applications instead of compromising on storing certain parts of it on the classical web and then having only the NFT metadata identified basically on the blockchain. It is essential to have everything decentralized.
Figure 4: Motoko Programming Language
Internet Computer gives you the advantages of removing the dependency on other platforms and hosting the entire application on the blockchain
The big advantage with ICP is that you can actually have everything on the Internet Computer itself. In other words, there is no need for other platforms because the Internet Computer has the capability of storing the whole asset in certain canisters. Also, the fact that you can actually have the full application, including the front-end hosting on the Internet Computer, is a big difference compared to the other platforms and blockchains. I haven’t seen another blockchain where you can actually host the entire application on the blockchain so far. One actually has to have the front-end in the classical web or some in-web services. Therefore, this is a huge advantage of the Internet Computer regarding scalability and security because everything is decentralized in the end.
Regarding developer experience, Dfinity is trying to make it simple for developers because they’re introducing their own language Motoko. Additionally, having the ability to program or develop in Rust makes it quite convenient for new developers to onboard. With me learning Motoko right now, it’s quite interesting. It’s a different type of language for me to learn, but so far, I find it’s very intuitive. Many developers are also working on making tools to make developers’ experience on IC more efficient and more convenient. Many tools will come up in the future and a whole ecosystem will evolve in the next couple of months and years.
Questions 4
Yufan:
Having a sustainable business model that benefits all stakeholders is the guarantee for the long-term popularity of the blockchain ecosystem. Developers are an essential component of stakeholders in the blockchain ecosystem. How does the current business model in the NFT ecosystem benefit developers, and what are your thoughts on the current limitations and future development?
Dr. Dustin:
The NFT royalties give developers an incentive as a long-term revenue stream.
I think you can group this into two parts, especially regarding NFTs. Developers can also be the creators of these NFTs because the NFTs can be artistic work, like classical artists’ work. There’s also a lot of digital artwork created by software developers or applications that can also be an NFT. A big benefit, of course, here is the concept of royalties. When you are a creator or developer developing some sort of NFT, which gets into the secondary market, there is a long-term revenue stream for these developers. Thus, this is really an incentive also for developers or creators to create their creative new types of NFTs.
Figure 5: An Example of DAO: SharkDAO
Having DAO structures gives every developer, no matter what kind of hierarchy, a voice in the end.
Another benefit for developers working on ICP or other applications is basically that you have the tokenization of these various applications and Decentralized Autonomous Organizations (DAO) [1]’s forming around these. You then have a direct stake or share of the application you’re developing. Therefore, if you’re a motivated and creative developer, you can put in a lot of effort to develop a nice platform and as you have a personal stake in it, you have a personal incentive for it to become successful. Also, the fact of having these DAO formations, in the end, gives every developer, no matter what kind of hierarchy, a voice. Let’s take the example of NNS (Network Nervous System) [2] on the Internet Computer that everybody can bring up proposals on how to improve the whole ecosystem. In that case, you won’t have to climb up the ladder in hierarchy, as in certain classical businesses, to bring up your ideas and proposals. Everyone can simply post the proposal to the forum or the NNS. This is really a remodeling of every developer and every person involved in the ecosystem. They can bring up ideas and have a voice, which is a huge benefit and something that differentiates from classical business structures.
Relevant Materials
[1] Decentralized Autonomous Organizations (DAO)
- What is DAO?
A DAO is an organization run by a group of people with no typical company hierarchy, who establish their own rules and make decisions based on smart contracts on a blockchain. All its rules and transactions are recorded on the blockchain, thereby removing the need for any central entity.
- How does DAO relate to NFTs?
DAOs help the NFT industry by collective ownership of an asset. Another key area where DAOs help NFTs is community governance.
[2] Network Nervous System (NNS)
- What is NNS?
The Network Nervous System (NNS) is the open algorithmic system governing the Internet Computer blockchain. Its most notable innovations include its ability to upgrade the Internet Computer protocol and software running on node machines, onboard new node providers, add node machines into the blockchain network, and create new subnet blockchains to increase capacity.
- How does NNS work?
Anyone can participate in the NNS by staking ICP tokens into one or more neurons. Neurons can submit proposals and decide to adopt or reject them. The NNS implements liquid democracy: neurons can follow other neurons and delegate voting power.
Acknowledgments:
Interviewee: Dr. Dustin Becker
Interviewer: Prof. Luyao Zhang, Zichao Chen, Yufan Zhang
Executive Editors: Ray Zhu, Xinyu Tian
Advisor and Chief Editor: Prof. Luyao Zhang