technology

NFTs and the digital art revolution

Programming Blockchain
Yield Guild Games
Genesis
Response
Penultimate
Finale

Jimmy Song

Programming Blockchain

April 3rd, 2021
NFTs are a hype scam that suffer from many flaws.
First, it's not clear what the NFT is. It's not the bytes on disk, which are clearly easily copyable by anyone who can click "download." It's not intellectual property rights where you can earn royalties. The property that the user gets is neither obvious nor revenue-generating. Technically, NFTs are designations of the art by the artist with attribution on a blockchain, that's it. Why this would be worth anything to anyone is hard to fathom, but that's not the only problem.
Second, NFTs do not require a blockchain. Artists can just as easily make a webpage with the current "owners" of various pieces of art and allow them to be traded. Why don't artists do this? Because there's no market for NFTs on their website. Technically, it would be exactly the same. The reason for issuing an NFT on a blockchain is because there's a large amount of money available on those blockchains. These are people who printed their own money who are buying, at least in part, to promote their platform. Newly printed money is ultimately the reason artists pay exorbitant fees to various services like Nifty Gateway to issue their NFT.
Third, the artists are being used for their clout to promote these platforms. The one thing these platforms such as ETH, BNB, etc. have in common is that they all printed their own money. As their token prices rely significantly on marketing hype, they often spend much of their printed money to hype their platforms. NFTs are just another hype scam to add more credibility to their platforms. This is obvious in the way that artists defend these platforms despite understanding little about where the money comes from. For an artist, this is the very definition of selling out.
What we have are unclear assets that require no blockchain that use the artists' clout to continue a token scam. To do this, they create a speculative bubble to generate interest and in this, they've succeeded. Hence, we have debates like what we're seeing here to evaluate NFTs as they go up in price.
The economics of NFTs are pretty terrible and unlikely to last long. Anyone can create NFTs so the supply will increase continuously until there's a saturation point when it'll crash, much in the same way that ICOs did. While the NFT hype continues, there will be artists that get paid. In the long-term, they are destined to crash and many people will be left holding the bag.
I've laid out the facts and you've been duly warned. If you don't think so, I'm happy to put my bitcoin where my mouth is.
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