TL;DR- NFTs are dynamite for press headlines, are little understood, and in the eyes of many sensible people, fucking stupid. Why is everyone pushing NFTs so hard? Because they want the value of their NFTs to go up so they can sell it to you and you’ll be left holding the bag. There’s loads of insider ownership that gets sold off when collections mint, and fraud is prevalent too. Below I call out eight legit reasons to be annoyed with NFTs.
Disclaimer: It’s pretty obvious that I’m a crypto bull (I spend hours on this blog everyday). But I like to listen to the doubts of others and those in my own head- and reflect on those doubts. Not doing so would be ignorant. Rudyard Kipling captured this sentiment beautifully in his poem If:
“If you can trust yourself when all men doubt you, / But make allowance for their doubting too”
Plus, there’s nothing like a good hateful rant of all the BS that permeates this space. Don’t get me wrong here- I think blockchain technology and NFTs do have a space in our future. But that space is going to be different than we think.
So why should you hate NFTs? Let’s get this shit show started.
8 Reasons I Hate NFTs
They proliferate inequality. Lots of us like how ‘Web3’ promises decentralization. Take the power back from the likes of Google, Facebook, and the Federal Reserve! Cut out the middlemen, and all us little guys win. Most everyone likes this notion.
Here’s the rub: a small number of elite few own a staggering swath of all NFTs. Most cryptopunks belong to one percenters like bankers, VCs, Snoop Dogg or Jay-Z. It’s just one more example of wealth transfer to the rich when these items sell for tens of thousands. I’m no Robinhood- I’m a red blooded capitalist. But we should call things what they are here- a flawed, high-risk market for those with extra cash to spend. Not the savior of the inequalities of the world.
The huge majority of people can’t understand the notion of NFTs. And people tend to steer clear of throwing money at things they don’t get. The NFT bull response is this: Get in early while people don’t understand it! It’ll be too late when NFTs are ‘mainstream’! The metaverse is the future! What motivation could these people possibly have to hype NFTs? Oh, that’s right- they’d profit from it. They want you to be the greater fool who buys their NFTs before the price drops.
When it comes to NFTs (and cryptos), supply greatly outstrips demand. There’s either no or a miniscule barrier to entry for anyone to mint an NFT collection on any blockchain. The same way there are thousands of cryptocurrencies and most will fail, there are a surplus of NFTs and most will fail. Thousands of these collections will go to zero- and I do mean zero. NFTs, like art, are about social signaling- people will only find them valuable if other people they care about or are trying to impress find them valuable as well.
We have a tendency to overhype new technologies and their promises. In 2014, Jeff Bezos announced that Amazon would create a superior smartphone. In 2013, Elizabeth Holmes calimed to have a handheld device that ran blood tests. Also in 2013, Google founder Sergey Brin said Google Glass would be widely available later that year. None of the these things came to pass. I’m not saying NFTs won’t reach widespread adoption- they could, but it’ll be far slower than we anticipate. Use cases could be different too- the use of NFTs in gaming is a compelling one. This is far from shilling JPEGs of Apes, though.
People, especially the rich, have a tendency to pay extraordinary sums for things that are useless. Take gold for an example- what is it good for? It’s a decent conductor of electricity. That’s about it. Billionaire Warren Buffett famously said “it does nothing but sit there and look at you.” Yet wars are fought over gold, the Queen wears it in her crown, and stock market doomsdayers horde it. It’s valuable because we collectively decide it is. It’s the same with NFTs. NFTs embody this principle quite well. JPEGs of pet rocks have a lot higher ‘stupid factor’ than a shiny rare metal.
The NFT market gets manipulated and a small select few benefit. This happens everywhere, but it’s especially bad in the NFT space. In the world of finance, this would be insider trading and people would go to jail. For instance (and this happens with a LOT of NFT collections) the NFT creators pay influencers and celebrities to buy their items. Normally this would fall under the category of effective marketing. The problem is the owners hold large percentages of these collections, then flip them when 10x or 100x. Unfortunately the frontier outpaces the law, and this racket is still going on.
Cryptocurrency enthusiasts and NFT holders are incapable of shutting the fuck up. I realize as a crypto blogger, I’m a huge part of the problem here. I’m creating and proliferating bullish content on crypto and NFTs. I also have genuine hatred for some aspects of the space, as well as a healthy amount of self-hatred. So healthy! Something I’m always looking to improve as I age is mindfulness of others. If someone is annoyed or doesn’t care what you’re talking about- just stop it. If you love NFTs, there’s no need to plaster it all over social media. There’s no need to incessantly try and force your friends or family to get into the space. If people ask questions- obviously gladly answer them- otherwise, don’t bother.
Energy waste. Most NFTs exist on Ethereum, (currently) a proof-of-work blockchain that burns some serious energy mindlessly (in the eyes of some). The trifecta of cryptocurrency features is this: speed, security, and decentralization. Blockchain is a game-changing tour de force, but to deliver this performance, miners have to burn some serious wattage. Many rightfully ask- why we’re pumping tons of CO2 into the atmosphere just for vanity’s sake.
Tons of people out there quite frankly don’t give a shit about what something is, they just care about making money on it. Based on what I’ve seen and the conversations I’ve had, only a small number of people have made out really well in the NFT space. Several times that number have FOMO’d in and lost their money. This isn’t investing- it’s gambling and chasing the dopamine hits.
If you’re into NFTs, be there because you like the art, you like the idea, you like the collection’s founding team, distribution economics, and road map. If you’re just looking to flip digital assets for quick profits, it’s gonna be a rough ride for you. Not financial advice- but be discerning when looking at anything new and ask yourself “how might this be bullshit?” before proceeding!