December 8, 2021 - 5:30pm
The NFT (non-fungible token) market is vast. Worth an estimated $45 to $50 billion, its popularity has soared in recent years. It’s also a bubble — and a rapidly inflating one at that.
Just this week, an NFT art project sold for more than $90million, making it one of the most expensive pieces of art ever sold. Around 28,000 buyers bought shares or ‘digital tokens’ in ‘The Merge’ (which looks like a glorified ping pong ball), in the hope that one day their investment will mature.
NFTs are complex, but essentially they are digital tokens stored on a blockchain that point to a web address or another location, containing a piece of art, audio, video, or even physical works — literally anything anyone is willing to “acquire”. They’re basically another type of cryptocurrency, except they cannot be replicated on the same blockchain.
Yet here’s the catch. Owning an NFT grants you “digital property rights”, which sounds awfully official, but in reality, you receive a pretend ownership — for what will likely be an outlandish price tag. In other words, it’s an imaginary contract of ownership between buyers and sellers of digital air. Not only does the artist retain the real-world copyright, but anyone can create another NFT pointing to the same asset on one of another potentially unlimited number of blockchains. Outside the “metaverse”, a term that the crypto has now tried to commandeer, your NFT ownership means zilch, granting you zero property or legal rights — taking George Carlin’s “Rights aren’t rights … They’re temporary privileges” to a whole new level.
The mania over NFTs bears all the hallmarks of a classic bubble: colossal valuations, greater fool theory, and its first adopters bragging about substantial, unrealised profits. You could even pinpoint the moment when NFTs officially entered bubble status when speculators started paying seven figures for a link to a cartoon rock. No one in their right mind could honestly claim that this was a sound investment, unless they were looking to unload it onto another sucker.
Fortunately, scepticism surrounding the NFT industry is building. It has drawn together unlikely alliances between the Left and Right, from environmentalists concerned about crypto’s effects on climate change to Right-wing gold bugs claiming that cryptocurrencies have “no intrinsic value”. Stephen Diehl, crypto’s most prominent critic, has seen almost every multi-thread tweet he’s created go viral recently. Meanwhile, TV actor Ben Mckenzie has become a full-time journalist pursuing an anti-crypto agenda, calling out other celebrities engaging in crypto swindles.
Eventually these people will be vindicated that NFTs were nothing more than a techno-futurist grift. The bubble will burst, and a sea of naive investors will watch their digital authentications of nothingness plunge to a value of near-zero. Unfortunately, they can’t say they weren’t warned — all the red flags were there from the beginning.
Join the discussion
Join like minded readers that support our journalism by becoming a paid subscriber
To join the discussion in the comments, become a paid subscriber.
Join like minded readers that support our journalism, read unlimited articles and enjoy other subscriber-only benefits.
SubscribeSometime, but rarely, I must admit, I’m lost for words; when it comes to NFT I can only say wtf.
The computer age, which was in its infancy when I was in mine, just keeps rendering everything strange and stranger. Of every new fine thing that I have seen appear on the cyber horizon, this NFT phenom is the strangest of all. I perpetually fail to understand how such things can have any value at all.
I keep expecting some little Toto dog to sprint behind the curtain and yank it back to reveal a wiz of cryyptoz who is drumming up all these strange obsessions, or . . .
a wise child to suddenly shout out, in the midst of our constant online parade of weird new funny things, exclaiming that the new funny thing has no clothes and no reason to exist.
I just don’t get it. Maybe I’m one of those suckers who is born every minute.
But then again, I never got into video games thing either.
My guess is NTFs are to be Metaverse ‘real’ property. The alien Zuckerberg likely will be putting block chain patent enforcement on his artificial Sodom and Gommorah reality, so somehow this will keep the craze going. The art dispalyed on the wall of the NTF palace you bought for $16,000,000 will have to have a NTF proving your ownership of both the palace and the art, unless it is some ‘open source’ trash….. which will give no Metaworld -cred.
All the metaworld-cred in the world will not change the fact that most of the “players/users/inhabitant/citizens/…” will be fat 30+yo incels living in their parent’s basement, slurping on oversized soda drinks in their high end gamer chair.
I’m fine in the real world, thank you.
And I suspect bears will keep ****ing in the woods too.