NFTs are foolish and any serious business should stay away from them

NFTs are a meaningless hype that gets more silly the deeper you analyze things. Despite their value on the internet and the undeniable hype that exists today, you should stay away from them.

An NFT of a pixelated image of a little blue man was purchased on February 12, 2022 for the equivalent of $ 23 million. Gartner believes we will routinely be in the metaverse in 2026 and will pay with cryptocurrencies and NFTs there. Salesforce works on an NFT Cloud. Those who try to put the above puzzle pieces together quickly come to the conclusion that NFTs must be something serious. What exactly do you probably still think is vague, but with such quantities and big names, NFTs must be the future, right?

None.

This picture is worth $ 23 million. Or at least the NFT of it. For the image, right-click for free and select Save Image As.

Swivel or not fungible?

Let’s start from the beginning: NFT stands for Non-fungible token. A Bitcoin is fungible or convertible, just like traditional money. One Bitcoin is identical to another, just as every euro corresponds to every other euro. Like cryptocurrencies, NFTs are held on a blockchain. Such a blockchain is a very secure decentralized ledger that keeps track of who owns what exactly. On the Bitcoin blockchain you will discover how much Bitcoin is tied to one wallet is connected, on the Ethereum blockchain you can read, among other things, who owns which NFT.

An NFT is therefore a unique token whose ownership is tracked via a blockchain. NFTs today are massively associated with digital objects such as photos, videos, but also tweets or even completely random things from real life, such as Club Brugge goals. An NFT of such a target, video or image is a unique digital piece of paper indicating that you are the owner of the item in question.

Nothing more than a token

It may sound useful at first glance, but it is not. NFTs are unique, but the things they have to prove ownership of are not. You can own the NFT of an image, but that image remains identical to any copy you make before or after it. A goal from Vanaken remains a goal from vanakenwith or without NFT sold.

This is a picture of ‘Elephants’ by Salvator Dali. The picture is not unique. Anyone can copy them. The original painting is.

NFTs are known for facilitating digital art and helping artists sell their artwork. ‘Elephants’ by Salvador Dali is a unique painting. You can make copies and photos of it, but the original is easy to distinguish from a print and has an inherent value. You can buy or sell it for millions, and in exchange you get a unique piece. It’s harder with digital art: the copy of the original corresponds to the original after all. Bits and bytes are the same. By attaching an NFT to the original, it becomes unique, according to supporters.

It’s not true.

An NFT does not modify the printout or video. The copies are still identical. If you want to keep an illegal or illegal copy of an image, you can, whether there is an NFT or not. When you buy an NFT, you buy exactly that: NFT, neither more nor less. An NFT gives you no (copy) rights and has no legally enforceable value. Nothing prevents an artist selling an NFT of an image from later selling another NFT of the same image. Conversely, as a buyer, you have nothing to say about the distribution of copies of what you have bought. And those copies are, as we mentioned earlier, completely identical to the ‘original’.

A token does not make unique

An NFT thus represents an attempt to make something interchangeable and non-unique (copies of digital content) non-interchangeable (and unique) through a token. Because it is not possible per. definition, NFTs are more a form of collective fraud than the solution to digital ownership. Look at the picture above of the little blue man: the person who spent 23 million on an NFT of it therefore does not have a better or different version of the picture available.

NFTs are an illusion and a bad solution to a non-existent problem.

NFTs are an illusion and a bad solution to a non-existent problem. A creation, digital or not, is already subject to copyright. You can perfectly sell usage rights for creations without NFTs. In fact, an email where an artist passes on the right to use an image to a buyer has legal value that NFT does not yet have. It is also illegal to copy digital art without permission without NFTs, and the artist may also sell digital artwork without NFTs. Do you want a unique print or video? Then pay an artist you appreciate for a custom-made work. Do you want to own a goal from Club Brugge? So spend that money on a psychologist, because that ambition naturally goes awry.

NFTs therefore do not solve the ‘problem’ of digital art interchangeability and offer no added value compared to traditional forms of digital object sales. They have no legal value, so you can not enforce any rights with them in real life. Anyone who buys an NFT can only quarrel about his or her possessions with other people interested in NFTs.

Worthless, but not worthless

Are they therefore worthless? Obviously not. Millions go back and forth for NFTs to change hands. NFTs are unique and therefore in short supply. If enough people are interested in a scarce object, a market will emerge for which supply and demand can play. NFTs can be exchanged for money because people want to give money for NFTs, not because NFT ‘is’ something.

Moreover, because tokens are on a blockchain, people seem to see them as the successor to Bitcoin. As with cryptocurrencies, there is a lot of speculation and the lucky ones earn monster profits, but that does not suddenly give NFT an inherent value. Can you see NFTs as a harmless digital investment asset? Is NFT an unregulated toy for brave players?

No, NFTs are not harmless.

Misleading for ill-informed people

There are several issues with NFT. The first has to do with deception. No one thinks cryptocurrencies are more than that: digital coins with an unstable price that you can take advantage of. But many people think that NFTs represent something. They are under the illusion that they are actually buying certain rights when investing in an NFT.

A good example of the confusion that NFTs create is the anonymous naive who bought Jodoriwsky’s Dune. They planned to digitize the rare book and then sell it as tokens. The original book would then be burned. The group paid $ 3 million for the book, only to discover that they only owned the item, not the associated copyrights. If they wanted to sell NFTs of the book, they would be allowed to meet the rightful owner of the copyright in court. Genuine copyright has enforceable value, NFTs do not.

Terrible for the planet

Another problem is bigger: NFTs are destroying the planet. They live on a blockchain and blockchains are notoriously bad for the environment. We will not go too deep into the function of blockchains in this piece, but in essence blockchains work by thousands of decentralized nodes (computers) it my. That mining ensures that the blockchain receives secure updates and generates money as a reward.

Unfortunately, it is an extremely energy-intensive activity. For the Ethereum blockchain alone, miners today use around 112.76 TWh: about the same as the total annual power consumption across the Netherlands. The associated CO2 footprint is comparable to that of Serbia and Montenegro. NFTs are a major driver of activity on the Ethereum blockchain. As discussed, they have no value except as speculatively good, and as digital speculative goods, they are extremely polluting. Investments in oil are also bad for the environment, but the oil at least ensures that a car comes from A to B. NFTs do not contribute anything.

A risk to the economy

On the contrary: they endanger the economy. Like cryptocurrencies, NFTs are an unregulated market. Money arises and disappears without rules. The current financial system is subject to some abuse, but there are at least (inadequate) rules to limit things like fraud, manipulation or insider trading. Blockchain-based investments do not suffer from this.

also read

Salesforce wants to embrace NFT hype with new cloud service

NFTs include a growing market that already represents more than $ 10 billion, where people can make real money but also lose them. All too often, these people do not know what they are actually doing. If enough money is lost, it can, in the worst case, affect the real economy.

stay out

For all these reasons, it is important to take a sober look at the hype surrounding NFTs. Gartner is a very effective analyst firm that acts irresponsibly when it says NFTs will be part of the digital economy of the future. The Agency cannot itself make this claim. Logically, for the necessary substance does not exist. Gartner, meanwhile, is contributing to the unwarranted hype.

This brings us to Salesforce, which may be jumping on the NFT bandwagon, boosted by Gartner’s predictions. Salesforce can thus facilitate the sale of legally and practically worthless fried and highly polluting air. It contributes everyone who jumps on the NFT hype.

Organizations are understandably afraid of missing out on the next big wave of digitization. Therefore, it is tempting to participate in a hype, especially when other big players are doing the same. However, NFT is nothing but a polluting and misleading bubble. Companies that stay away from it miss nothing. On the contrary: They show common sense.

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