• Tencent and Alibaba trying to pursue NFT business – but not as we know it

  • Two of China’s biggest tech giants have quietly launched their own trading platforms for non-fungible tokens (NFTs) in recent weeks – despite the fact that Chinese authorities are currently waging an all-out war against cryptocurrencies.

    Tencent’s Magic Core NFT trading platform has officially launched with the debut of a special series of 300 tokens tied to the talk show Thirteen Invitations.

    Tencent seems keen to maximise its entertainment credentials. In addition to its technological prowess, the conglomerate is one of China’s largest producers of reality and variety shows, as well as TV series and pop music.

    The tokens are being sold for around $1.25 each. The show premiered in 2016 and airs 13 episodes per season, all featuring interviews with filmmakers, musicians, media personalities, artists, writers, entertainers, entrepreneurs and more.

    At first glance, the 300 NFT projects function in much the same way as tokens on popular networks like Ether (ETH), where they are bought and sold using ETH – but there is one key difference. Instead of using a major public blockchain protocol, Tencent NFTs are issued on a private network using points or fiat gateways.

    Tencent claims that third-party creators will also be able to launch their own NFTs on its network.

    Thirteen Invitations NFTs will offer exclusive audio on topics from the latest series.

    Intriguingly, perhaps Tencent is thought to have some dedicated division working on creating other NFT-related products, unrelated to the new platform.

    Music will be a major focus of the new platform going forward. The QQ Music subsidiary is currently conducting closed-door testing of an entirely music-based NFT range on the platform, with plans to launch blockchain-powered products in future digital album and merchandise releases by Tencent Music Entertainment Group and QQ Artists.

    This is nearly identical to the strategy being taken by Alibaba’s blockchain subsidiary, Anthem Group. Anthem also released its own NFT platform in recent weeks, which also leverages private blockchain protocol technology.

    It’s unclear how secondary markets will work with the new paradigm. It is entirely possible that these tech giants want to operate their platforms on the ethereum network or other major protocols, but have been forced to scale back their plans due to regulatory pressure.

    Anthem Group’s NFT debut line with the Dunhuang Research Institute, also known as the Dunhuang Art Institute, was released in June, with some low-priced items available for Alibaba membership points. Secondary market transactions were initially allowed, but only on Ant Group’s private blockchain network.

    However, Taobao’s Xiananyu (China’s answer to eBay) has since removed some NFT items from its virtual shelves, possibly to avoid government trouble.

    Alibaba made it clear that these NFTs were not for “commercial purposes” and distanced itself from NFT activities “related to cryptocurrencies”.

    Over the past few years, the Chinese government has sought to crack down on most forms of blockchain technology that do not utilize private networks – efforts that have intensified in recent months, despite its keenness to promote interoperable solutions with popular global networks.

    The government has also been on a mission to curb the immense power of China’s tech giants, with Baidu also caught up in a broad regulatory crackdown that sent most major domestic tech stocks plummeting 15-20 percent.

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