NFTs Gold Rush

Hi guys, Andy here. This week feels like a watershed moment in the NFTs gold rush. I’ve spent much of this week collaborating with Jack Lowe, of the Lifeboat Station Project, trying to make sense of the lie of the land while it shuddered and rippled like an earthquake beneath our feet. Prominent players entered the market on almost a daily basis to the delight of those already established yet underlying concerns remain unanswered.

For all the hype I think it is important to take a step back and see the wood for the trees. Firstly NFTs are the children of crypto, they are part of blockchain technology and they are not creations of the real, tangible world nor the art world to which they have become associated. To use the legal phrase, ‘fruit of the poisonous tree’, the problems with NFTs stem from issues that plague crypto and the tech world. PoW has caused blackouts in Kazakhstan, the new destination for ‘cheap’ electricity for crypto farms after being ejected from China following deaths in illegal coal mining. Crypto and decentralized finance (DeFi) has simplified money laundering.

Tech, in particular Facebook and Google, are facing long overdue investigation following recent whistle blower documents showing them to be even worse than we feared; issues such as manipulation of the online advert market, promotion of hate speech are just the tip of the iceberg. And yet while the world attempts to deal with the real life ramifications of such actions this week saw Adobe, the British Journal of Photography and Time all enter the NFT market, a week which also saw Mark Zuckerberg launch a rebrand of Facebook with the holding company Meta.

Mark Zuckerberg’s now-famous motto: “Move fast and break things” has been followed by many, keen to emulate the success of Facebook. Whatever his original meaning the phrase now captures a trend personified by those of dubious nature; disrupt and the more the better. Products, news, opinions; many race to enter the respective markets as quickly as possible with little regard to governance and tech is hell bent on achieving because it can rather than because it should. My fear is we shall soon break things that can not be fixed; maybe we already have. And all the while the tech world continues to publicly ask for faith while privately conducting business in negative and harmful ways with zero accountability.

In regards to NFTs, their creator Anil Dash states his creation has been hijacked by tech world opportunism that has created a digital system that parallels real world problems while solving none of them. Best practice is best practice be it in the real world or the internet. Much of our lives are upheld by rules and regulations that have evolved over hundreds of years. The internet is, in comparison, still in its infancy and the lack of regulations are destroying lives to the benefit of a few. The promise of tech to help shape a better world has been shown to be false with many in the space taking advantage of and exploiting the lack of governance for their own benefit.

Crypto bros pitch NFTs as the future while inserting themselves into the art world as middle managers, ignoring the fact that art (and certificates of authenticity) are only as good as the artists and galleries behind them. Stories abound as to copyright infringement, accounts selling the work without permission, NFTs disappearing from wallets, impersonators claiming they are the rightful copyright holders, artists being dox’d etc… NFTs have taken existing flaws and challenges and grotesquely amplified them with scammers simply disappearing while many NFT galleries carry no risk, shrugging their shoulders and transferring responsibility to buyers while pocketing a percentage.

The NFT world is made all the harder to engage with when most proponents are either ignorant or unreasonable to engage with. Their standpoint often consists of PoS, the promise of smart contracts and that blockchain transactions are the equivalent to trains; ie they run with or without you, so you may as well get on board. This detracts from PoW still being the dominant consensus mechanism, that smart contracts have no legal standing and that crypto currencies have transactional capacity at which stage a price war is triggered (using the train analogy; the train is quickly filled at which stage travellers start to outbid each other for tickets). ‘

You can own this unique piece of digital X, Y, Z’ is the cry. The reason why many struggle with this concept is it was not long ago that the tech world lauded the fact that digital files and assets are easily duplicated; I have and make a copy of a digital document, spreadsheet, image, game and give it to you at which stage you can enjoy the same benefits I do. The same industry that benefits from selling, sharing and copying multiples of the same asset is now also claiming these assets have scarcity; which is it as it can not be both?

Against this backdrop I find it hard to see those who choose to enter the market other than ignorant or complicit. I long ago stopped using Facebook and Instagram, to my own business detriment, due to a moral standpoint and NFTs have helped nudge me to start printing my own work. I do not regard my self as anti tech and acknowledge the imperfections and unfairness of the real world. What horrifies me is the route and exploitation that happens in the tech world that is translating to real harm and pain. Much of the tech behind this harm could be used to help people but decision makers have opted for financial self interest as their priority. I pray this changes.