Okay, we've all stopped laughing. Let's get serious.
NFTs are, by and large, a scam.1 2 (Anil Dash, the guy who claims to have invented them alongside Kevin McCoy, says so.15) They do not convey ownership of a thing, not even a digital one. When you buy an NFT of something, you are not buying that thing. You don't own it. Heck, the person selling you the NFT doesn't even necessarily own it. At most, you are buying a sticky note that says "this thing existed at the point in time at which this sticky note was written" and a guarantee that that sticky note will be in a particular place and you can go look at it whenever you want.
I mean, at least when you buy physical art, you get the actual art. It's the only copy of that particular art; that's the whole point of it being valuable. (Of course, there is forgery to worry about, but...3) When you buy an NFT of a JPEG, you don't get the only copy of the JPEG. In terms of the art itself, you don't get any more than someone who just saves the image to their hard drive.4 You have, essentially, just believed someone when they said "this specific piece of information is worth $X" (well, probably X BTC or ETH or whatever dumb meme coin Elon Musk tweeted out today), and you gave them that amount of money, and now there's a piece of information on the blockchain whose location on the blockchain you know, and which you can... sell to someone else someday maybe?
You'd better hope that "someday" is soon, by the way. Actual economists are pretty sure NFTs are an economic bubble5, and it's ripe for collapse within the next few months.6 7 Once that bubble collapses, all that money you spent on (sometimes-illegal16 17, often-racist8) NFTs will be gone. (You may not remember 2001.9 I do.)
(You might be asking: are NFTs actually good for anything? Sure. Money laundering.10 11 12)
One more thing: two paragraphs up I mentioned that you're almost certainly not paying for NFTs with US dollars; you're paying with cryptocurrency. You may have heard this before, but it bears mentioning again: nearly all cryptocurrency, and by extension anything you buy with it, is enormously bad for the environment. The worst of them by far is Bitcoin (BTC), but Ethereum (ETH) isn't far behind, and almost none have no impact.13 14 Please remember that when you're doing anything with cryptocurrency.
Anyway. If you've sat through this lecture and you still think NFTs are your cup of tea, well, I can't stop you. Just please, please, know what you're getting yourself into.
Thanks for reading. If you'd like, you can connect with me at https://chat.noelle.codes/@noelle - but if you're just going to argue with me about NFTs, please direct those conversations to /dev/null.
- 1 Investors Spent Millions on 'Evolved Apes' NFTs. Then They Got Scammed. Vice, 5 October 2021.
- 2 MCN Insights: NFTs are a scam. Museum Computer Network, 13 April 2021.
- 3 Turnabout. Futility Closet, 20 December 2013.
- 4 NFT owners insist they're totally not owned by 'right-click savers'. Mashable, 19 August 2021.
- 5 Economic bubble. Wikipedia, retrieved 10 November 2021.
- 6 NFT craze = Dot Com Bubble 2.0. CoinGeek, 18 August 2021.
- 7 NFT sales surge as speculators pile in, sceptics see bubble. Reuters, 25 August 2021.
- 8 Elijah Wood touted a newly acquired NFT. A racism scandal ensued. Input Magazine, 2 November 2021.
- 9 Dot-com bubble: Bursting of the bubble. Wikipedia, retrieved 10 November 2021.
- 10 NFTs and Money Laundering. EisnerAmper, 26 August 2021.
- 11 Are NFTs being used for money laundering? Yes, they are, claims Mr. Whale. CoinTelegraph, 13 August 2021.
- 12 The New Digital Art Trade Is Ideal for Criminals. Bloomberg Law, 20 April 2021.
- 13 Factbox: How big is Bitcoin's carbon footprint? Reuters, 13 May 2021.
- 14 What's the Environmental Impact of Cryptocurrency? Investopedia, 26 August 2021.
- 15 NFTs Weren't Supposed to End Like This. The Atlantic, 2 April 2021.
- 16 What are the copyright implications of NFTs? Reuters, 29 October 2021.
- 17 Copyright violations could crash the NFT party. Fortune, 4 August 2021.