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Are NFTs Stupid and Had Their Day in the Sun?
Some people get them, but some people don’t. You have avid supporters of NFTs that believe in their utility, purpose, what they stand for, and the changes they can bring to the digital world. However, you have those on the other side of the coin that thinks they’re just digital representations of items that are worth, well, nothing. So, are NFTs stupid?
What are NFTs?
In order to come to your own conclusion about NFTs, you have to understand what they are. NFT stands for non-fungible token, which can be anything from a digital image that drums up a lot of hype leading up to a drop, to virtual land. The tokens cannot be replicated, hence the term “non-fungible”. The ownership cannot be faked as the tokens are written onto blockchain technology, which will keep track of and depict ownership of the token.
Essentially, NFTs are digital property that cannot be faked and copied. Yes, it can be screenshotted, but the ownership cannot be replicated. We see the merit in such security and prevention against copyright infringement, but is that all NFTs can offer?
Reasons Why NFTS are Stupid
While there are merits, let’s check out the reasons why NFTs may not be the best.
Copying and Pasting
As we mentioned, unless you look into the ownership and the code on the blockchain, others can screenshot your asset and keep it without infringing on copyright laws. The NFT space is still largely unregulated and there is a lot of room for rules to be implemented. As of now, regular people won’t be able to tell the difference between a screenshot and the real thing.
No Copyrights - Unless Stated
Unless stated and the creator of the NFT specifies in the smart contract that he or she transfers all copyrights to you (the buyer), the copyrights still lie with the creator. Again, it is tough to hold people accountable due to the lack of regulations in the space, but you can make sure of the right before making your purchase.
Restricting Access to Content
This can be a good or bad thing, depending on how you look at it. As of now, NFTs are still public and people can see the item. However, NFTs open the door to commodification. What if NFT holders start charging or privatizing NFTs? It sounds well within their rights, and it is, but it could impact our culture as a whole and remove certain pieces that are integral to society.
No Mass Adoption - Yet
Don’t underestimate the masses. In general, when things are accepted by most of the population, more people will be open to it. As of now, there is no mass adoption of NFTs with some people still on the fence (hence why we have this article).
It is worth it to note that companies and countries are opening up and warming up to the idea of crypto and NFTs, so keep your ear to the ground!
Digitizing Reality
Some NFTs turn real life into digital assets. For example, NBA moments that are sold on NBA Top Shot. Basically, you are paying money to own a moment in time. Let that sink in. We have monetized time now? There are many ways to look at this, some angles can even be positive (like these moments are historic keepsakes that you have a stake in), but there are drawbacks as well.
It can feel like we’re on a slippery slope if something as intangible as time can be bought and sold.
Unperfected Tech
NFTs are still pretty new so there is a lot of room for errors and disputes. Until the tech is perfected and there is mass adoption with adequate regulation, NFTs can be a risk.
They’re Expensive
Not all NFTs are expensive and some have amazing utility, but some cost an arm and a leg. Let’s face it, it makes no sense to pay millions of dollars for a 2D digital image. But to be fair, we will say that the utility is sometimes what you’re paying for. We’re talking about things like exclusive access to events that celebrities (if they are also holders of the same NFT collection) could attend – Bored Ape, we’re looking at you.
Veiled Decentralization
NFTs rely on marketing decentralization, but they are not completely decentralized. It’s also a double-edged sword because without some sort of centralization, how can there be regulation and intermediation in the case of disagreements and disputes?
Then we look at DAOs (decentralized autonomous organizations) within NFT communities but it begs the question – isn’t a DAO centralized control?
Proof-of-Work Consensus
The Proof-of Work (POW) consensus is one that operates like this: “miners” have to solve difficult puzzles which require a lot of computing power and electricity faster than their competition in order to receive rewards. This method is largely used on the Ethereum blockchain and it has a significant impact on our carbon footprint.
To be completely fair, most other blockchains including Ethereum now are moving towards Proof-of-Stake consensus, which has a validator instead of miners doing the work. This takes a lot less energy.
FAQ
• Are NFTs failing?
Yes, NFTs seem to be failing in the markets now, but it is important to note that the entire stock market and the world are hitting a financial crisis. While its sales seem to be falling, starting from 2020 until we reach global financial stability again is not a good measure of NFTs’ success or failure.
Conclusion
NFTs are stupid to some, but not to others. It really depends on how you want to look at it. People can find the fault and the benefit in everything. The future is unwritten and though it seems like NFTs are failing, so is the entire stock market right now. This is not a good measure of what the future holds for NFTs. Who knows, they might hit an all-time high next year, or 10 years from now. We remain hopeful.
