Keen viewers of this channel may have noticed a topic that is ripe for skepticism but which I have, thus far, avoided discussing. I mean, there are probably several topics I haven’t gotten around to but there’s one that I CONSIDER talking about at least once a month and each time I decide to skip it. Well, no more, my friends. Today, we discuss NFTs.
Some of you have straight up requested a video on NFTs in the past and honestly I’ve always decided not to because while I have always thought they were a giant scam, I also always thought that there might be something I’m missing, because I’m not an expert in this realm and I’ve always had a bit of trouble wrapping my brain around things like blockchains and whatnot. And then Dan Olsen made the video “Line Goes Up” and it was so good and thorough that I figured, why bother?
You should watch that video if you are at all interested in NFTs, but if you don’t have the time, I will give you my best quickie explanation for what they are: “NFT” stands for “non-fungible token” and is essentially a unique label that can be attached to something, usually a digital something like an image or a song, to be sold or traded. When an NFT is sold or traded, the new owner’s name goes on a list that is public, so everyone knows that YOU own THAT NFT.
It’s worth noting that owning an NFT doesn’t necessarily mean you “own” the thing it’s attached to, at least not in legal terms. It’s all in a legal grey area where an accompanying “smart contract” might bestow some rights and it might not. You could, for instance, buy an NFT that points to a server containing the 1996 Whoopi Goldberg-dinosaur buddy cop film “Theodore Rex,” but it doesn’t mean you would have the right to rerelease that masterpiece in theaters, or start producing merchandise, which I would definitely purchase, by the way.
NFTs are, at the most basic level (and as Olsen points out in his video in regards to all cryptocurrencies), a “Greater Fool” scam – you gain nothing by purchasing one except for the hope that eventually a bigger sucker will come along and buy it from you. Can you make money off of it? Sure, if you’re early or lucky or if you’re the one who came up with the idea and pumped it to your existing audience, but all of those things do require you to either be completely clueless OR actively predatory and a bit sociopathic about what’s going to happen to those greater fools.
I know a scam when I see one, since I’ve spent the past several decades studying and discussing them, but I held off on talking about it on this channel because I wasn’t sure that after all the scams run their course, maybe there’s some use case for crypto, or the blockchain, or even NFTs. I mean, I don’t know! I’m not educated enough. Maybe Cory Doctorow has already written a dystopia where young cyberpunks use NFTs to, I don’t know, destroy Big Oil somehow. Like, sure, right now the NFT marketplace is absolutely flooded with scammers trying to get their piece of the pie, but there must be SOME ethical use case for NFTs, right?
Well, no. At least according to a new study by digital ethicist Dr. Catherine Flick, who concluded “there is currently no ethical use case or means of implementation of NFTs.” Cool, well that’s pretty cut and dry, isn’t it?
Flick’s research attempted to answer three questions: “Are Non-Fungible Tokens (NFTs) ethical technologies, What ethical issues do NFTs raise, according to professional ethics standards, and How might Non-Fungible Tokens (NFTs) be implemented in such a way as to mitigate any ethical concerns?” She explores those questions within the framework of the Association for Computing Machinery’s Code of Ethics, and she identified “issues of harm, well-being, discrimination, fairness, intellectual property rights, privacy, quality of work, competence of those involved, legal issues, the ability to give and receive critical review, lack of education for users, personal gain over public good, security, maintenance and end-of-life for NFT ecosystems, and ensuring the public good is the key concern when developing, deploying, and maintaining NFTs.” And…more. Basically NFTs violate every ethical code imaginable, and so her final conclusion is that NFTs do nothing that can’t be done better, more ethically, and more efficiently with existing techniques. She couldn’t find a single instance of an NFT that was deployed ethically and that did a job better than what humans have been doing for years, decades, centuries, millennia depending on whether you’re talking about “selling art” or “validating ownership of property” or “playing video games.”
Obviously this research won’t convince the people who are wholly invested in the scam. The author actually showed up in r/science comments to answer any questions and was met with replies like “How many NFTs do you own? How many discord servers are you in? Curious how deep you got in this research (disclaimer: didn’t read your entire paper sorry),” as if the author being in several dozen discord servers is going to trump her PhD in Computer Ethics and finally convince this jabrony to actually read the paper. And when another guy complained that companies using NFTs to establish ownership of physical assets was a legitimate use case, she suggests he actually read the paper because she discusses that at length there. To which he replies, “No.”
They don’t want to read papers, they want to “hodl” their hideous monkey pictures with their “diamond hands” until it takes them “to the moon,” even as trading collapses to 97% of its peak and crypto exchange FTX fully implodes with its founder rushing to his private jet with bags of money headed to South America. Because NFTs were a truly well-designed scam: they targeted greedy, credulous people with low information and poor social skills, offering them a way to buy their way not just to wealth but to coolness, to acceptance, to an elite community, to a cult with their own language and rituals. And because it’s a Greater Fool scam, the only possible hope these people have is to ignore or dismiss any criticism and to be relentlessly positive in order to attract that Fool who will finally buy in and let them cash out.
While it’s too late for them, I do hope that if you were considering getting into this realm you now take a minute to think about whether or not it will really be worth it. If you’re just looking for a community, hell, go join my Discord! You don’t even have to become a patron. And I promise you will never need to buy a hideous picture of a monkey, unless you really want. Let me know.