NFTs - A Tech Fad or Here to Stay?

By Jack Coleman You may have heard murmurings of Non-fungible tokens or NFTs while scrolling social media (you may have heard more than murmurings depending on who you follow). Essentially, NFTs are certificates of authenticity for items that are easily copied (like pictures and videos). Using blockchains, the ownership of an NFT is of public record. For those unaware (I was), a blockchain is a list of records (like transactions) that are linked together. Each block contains information about the previous block. This makes data within blockchains harder to change as each block “strengthens” the next block, meaning if someone wanted to change a block then all subsequent blocks would also have to be changed. NFTs come from the same breed of new-age money-making schemes as cryptocurrencies. Cryptocurrency is more understandable to people as they essentially behave like stocks, and the idea of a currency having value makes sense. NFTs as a concept is harder to digest because the things that people “own” are so easily reproducible, you can right-click and save perfect copies of any of the pictures that people claim to own. Crypto reply guys will liken their RNG-generated monkey drawings to the Mona Lisa, saying you can cheaply buy a replica of the Mona Lisa but only the Louvre “owns” the Mona Lisa. I find this comparison especially funny because the Mona Lisa is likely the most famous painting in the world and NFT art is generally of poor quality. However, one can’t argue with the market value of these pieces. “Everyday: the First 5000 Days”, a collage of 5,000 images created by artist Michael Winkelmann sold for $69.3 million in February. So, as funny as it can be to see “NFT bros” get dunked on, there is clearly a market there for the new medium. NFTs are predictably combined with cryptocurrency, the way of choice for purchasing NFTs. Digital certificates of authenticity bought with cryptocurrency, all stored on blockchains. At this point, some people would feel it’s time to herald the late-stage capitalism digital apocalypse. Though a market can exist in any climate, I can’t help but think NFTs and cryptocurrency are especially financially artificial. We’ve seen how unstable these markets can be with Elon Musk tweets causing large crashes in the value of certain coins. And how will governments and government agencies interact with this community and these mechanisms? Recently, a Twitter user known as Calvin Becerra allowed hackers posing as good samaritans into his MetaMask (crypto wallet) account and they stole the authenticity certificates for three of his NFT apes. The combined value of these three NFTs was around $770,000. After getting scammed, Calvin stated that he reported the hackers to the FBI. The irony being that an “advantage” of crypto and NFTs is that they operate mostly outside the jurisdiction of central governments. Calvin’s statement that he wouldn’t be changing his Twitter profile picture from one of the stolen apes because it’s “still my ape” was especially funny because isn’t the whole point of an NFT that the certificate means everything? You don’t own it, Calvin, not anymore. This saga was documented on the popular Twitter account @CoinersTakingLs if anyone is curious. I doubt the FBI can help Calvin now.There are also concerns over the environmental impact of NFTs. Since NFTs use cryptocurrency for transactions and crypto is mined using high-powered computers (which run on electricity), each transaction has a much larger carbon footprint than a regular transaction. In fact, Digiconomist estimates that an NFT transaction is x14 more taxing to the environment than mailing a paper art print to someone. This is why when Tesla announced that they were accepting Bitcoin as payment for their cars, people were confused as the cost of mining Bitcoin eats into the lower carbon footprint generated by driving an electric car. However, massive corporations continue to pollute the Earth with impunity so it looks like we’re goosed anyway. NFTs are continuing to expand, even into the gaming sphere. The idea of the “metaverse” is at the forefront of this development, the idea being that players will earn NFTs as an incentive for playing, translating into real-world value if NFT games catch on. Now, as someone who plays games either to satiate a competitive spirit or for fun, not to earn money, this sounds like a nightmare to me. But if you want to be a productive member of an artificial society then that is your prerogative. That won’t stop me from clowning people who say they won’t be playing a game unless it has an “NFT-based economy” though. NFTs (along with crypto) is a growing trend. Will this new digital economy stand the test of time or is it another money-making fad? Only time will tell.