NFTs Suck. Here's why.
Do we really need this weird new technology?
10 min read
If you made it to this paragraph, congratulations on bothering to start reading. The speed at which information passes before our eyes today is so fast that even Twitter sometimes has to ask us if we would like to read an article before retweeting it.
So you heard of NFTs in this 2021 explosion of monkeys and pixel people that are now all over the internet. You may be wondering what new trend is consuming cyberspace and when you discovered more about it, found yourself seething with anger at the state of things.
IT'S NOT THAT NEW
NFTs, or Non-Fungible Tokens have been around since around 2017 when Ethereum Request for Comment 721 or ERC721 was accepted as the standard for NFTs. This was the protocol that allowed for tokens, that were once fungible like currency, to become non-fungible and unique. NFTs were even possible before this but they did not follow a standard, thus making them inefficient and difficult to implement.
With such a new standard, developers began experimenting more with how it could be implemented. One art studio, US-based Larva Labs opted to try using this new quirk of the Ethereum blockchain for artwork. 10,000 unique pixel profile pictures were created and made into art NFTs that were then put up for free.
Yes. For free. The only thing needed in order to claim one was a small transaction fee, or "gas fee", which is required when transacting on the blockchain.
image from Larva Labs
These were the CryptoPunks - pretty much the OG NFT profile pictures that reached widespread adoption.
I cannot personally verify if they are the very first attempt at NFT profile pictures and I will gladly stand corrected if they are not - but the point is this is not a brand new 2020 fad. They only achieved hype in 2020-2021 when most of us were stuck at home thanks to the Covid-19 pandemic.
It's hard to not draw a parallel between the pandemic and the massive clash of opinions surrounding this technology. We can only guess that more people sitting at home behind their keyboards, starved of the experience of owning a physical collectible couldn't accept that a digital one could ever take its place.
Digital collectibles will never completely replace physical collectibles the same way ebooks have never replaced paperback books. It's not wrong to want something physical but is it wrong to want to own something digital?
Do we need this ability to own things digitally?
WANT, NOT NEED
I'd be the first to agree - the world does not need NFT technology - the same way we don't need virtual reality headsets, MP3 players and digital photo frames.
Many new technologies came far before their utility could be proven. Even in the cryptospace, Proof-of-Work algorithms were developed by Harold Finney as early as 2004 - a good 4-5 years before the genesis of Bitcoin.
Now we're faced with another technology struggling to prove its worth in the world and it's already off to a terrible start.
Aside from being a rich boys' toy, NFTs reached mainstream infamy through NFT art. Rich cryptobros seemed to be readily willing to pay tens of thousands of dollars in cryptocurrency just for a JPEG file on the internet. If it sounds ridiculous to you it's because it kind of is.
In some cases, when artists sell their artwork as an NFT, it makes sense when the primary buyer picks it up and the payment goes straight to the artist. As NFT art platforms evolved, this became more elaborate with functions baked into the marketplaces that ensure an artist receives a commission everytime the artwork is sold by their holders. The ecosystem was meant to benefit artists so that they can potentially get a share of the purchase value of their art once it's out in the wild.
The reason I used the past tense is because along the way, the tools that were made available to artists opened the floodgates to abuse that went unchecked and created a huge problem that spilled over from web3 and went after our friends in web2.
POWER TOOLS AND POWER FOOLS
At first, it took an elaborate smart contract deployment put together in Solidity in order to push out an NFT.
Then, OpenZeppelin made that much easier with their templates and wizards, greatly simplifying the process of minting NFTs.
Following that, the explosion of NFT marketplaces took off, leading to NFT marketplaces like Foundation, Rarible and more that allowed anyone to hop on and mint an NFT from any image on their computer.
As the process became easier for simply anyone with an Ethereum wallet to up and mint an NFT from any file on their computer, the obvious also happened. The tools that were at anyone and everyone's disposal also found their way into the hands of bad actors, particularly art thieves looking to make a quick buck.
When Cargo, a pioneering NFT marketplace cooked up Magic Minting, the cost of minting was greatly reduced to a flat fee and the gas fees, which are blockchain transaction fees, were then passed to the buyer of the NFT. The resulting condensation of minting and purchasing operations into one single transaction decreased the computational power required, which resulted in a lower gas fee and lower energy consumption.
While Magic Minting was not what opened the floodgates for art thieves, it led to the next problem - Lazy Minting.
Lazy Minting passed 100% of the cost to mint to the buyer, making it completely free to list an NFT. This changed the course of art NFTs forever. Now, anyone could technically create an NFT for almost nothing. One could do so with a completely empty wallet with no payment required upfront and without any verification or checks, thanks largely to a platform called OpenSea which prides themselves on being the biggest NFT marketplace.
With that, the floodgates burst open with the force of a hurricane. Bad actors were minting artworks peeled straight off DeviantArt, some even coding bots to do so. No captchas stood in the way of the robo-apocalypse that tainted the NFT market in the eyes of many artists waking up to find their works taken from them.
It keeps getting worse as I write this with OpenSea being unable (and more likely unwilling) to cull the intense influx of art theft on their platform.
THE RIGHT TO RIGHT-CLICK
As web2 folk begin to learn about NFTs, their tainted name took shape as a thieves’ paradise, where art theft runs rampant.
Then there are the other web2 folk who saw an investment opportunity in some rare and valuable NFTs. Without much reading up on the wonderful world of the blockchain, some jumped straight in, believing that their 50,000 dollar purchase would give them hyper-exclusive access to an image on the internet.
Perhaps they were still living in an era when computer mice only had one button.
Some of these people flipped out extensively at others who merely right-clicked and saved their NFTs, making them a massive laughing stock on the internet as the absurd demand for "Right-Click Protection" was made by these folks. There was cynicism surrounding whether or not these people were actually being serious. It turned out there are people out there who really believe that they can exert such control over the internet because they are used to being able to do that in the physical world.
Artwork NFTs do not change exclusivity to the artworks they point to. They are merely tokens that verify ownership of an asset that they point towards. While web3 applications can build upon that verifiable ownership to unlock special features in Discord servers, video games and the metaverse, they will not lock down access to an image.
USE AND ABUSE
You may already have seen the big battle between "NFTs are good!" and "No F**king Thanks!" on social media between the many people who are for and against the technology.
The issue with NFTs is not the tech but the people who use it. It's just like guns. Guns don't kill people, people with guns kill people.
With the internet in a constant tug-of-war between privacy and regulation, cryptospace takes the stand in the corner of privacy and control. It has granted anonymity and control to the users and is part of what makes web3 what it is.
Mega-corporations like Meta and Google stand in the opposite end of the spectrum, collecting user data and hyper-regulating their spaces, controlling what people see and don't see, giving rise to plexiglass echo chambers with walls so clear many of us don't even realise that they are there.
There are a lot of arguments against NFTs as a detriment to the environment and a cause for climate change.
The high energy use by Proof-of-Work (PoW) blockchains has been a cause for concern for years now, even before NFTs entered the scene. From Bitcoin to Ethereum, PoW blockchains consume as much energy as entire nations in a year.
In future articles on this blog I will write more about how this energy use is calculated, what is being done about it and how the energy conversation is shaping the future of NFTs.
The one thing I will mention here on this topic is that the conversation is largely imbalanced due to an imposed correlation between energy use and pollution. While our current circumstances reveal that we still largely rely on fossil fuels for electrical energy in the world, the push for renewable energy is the conversation we should be having. It's very easy to blame those who use energy and too much work for the average person to follow the trail back to those who make the decisions as to how energy is produced and managed.
Climate change is indeed serious. There is a world beyond the concrete jungle dying every day. Rivers polluted with toxic waste, trees being felled in mass deforestation, oceans rife with plastic debris are among the contributing causes.
The consumption of fuel to produce electrical energy will always come at a cost to our environment either in thermal or chemical emissions. Any device connected to the grid will consume energy produced by a fuel baseload. Renewables help to offset this reliance and help us transition more easily with minimal disruption to the grid.
When we can reach a point where energy production is from mostly renewable energy is not up to the cryptosphere but instead, up to the governments who decide what goes into our power plants.
A DIGITAL DILEMMA
The truly new and disruptive innovations in technology are always met with strong resistance and opposition by those who are complacent with a technology that they are familiar with and would prefer not to have replaced. After all, many people do believe that if it ain't broke, don't fix it.
NFTs are currently straddling the thin line between make or break. Some believe that in the tech should be rejected at all costs while some still want to hang onto the hope that it can one day, after it stabilises and presents the full force of its utility to the world, be able to thrive.
WHY NFTS SUCK
There are believers, there are cynics, there are haters. Then there's me.
My name is Daniel Anthony. I have been a blockchain enthusiast for almost a decade, delving into the many quirks of Bitcoin since its inception. NFTs are a headache and a wedge so big it breaks families and communities apart like never before.
My passion for web3 and all things blockchain and my heartbreak with the widespread abuse of this technology brings me here today, to this melting pot of optimism and frustration, excitement and anger, anticipation and disillusionment.
Today as I publish this, I am turning 30 years old and starting a new chapter in my life. I decided to take a stand - and to be the change I want to see.
This blog is my story. Thank you for reading. Hope to see you around.