UPDATED! The Problem with NFTs: the Growing Push-Back from People Who Are Sick and Tired of the Current NFT Craze

There are fewer topics which provoke such a sharp divide of opinion as Non-Fungible Tokens (NFTs for short). NFT madness has reached stratospheric heights, and looks likely to rise even further. And some people have had enough.*

When Kent Bye and Molly White (who are heroes of mine, but in very different ways) both highly recommend a YouTube video, you can bet that I pay attention!

Of the two, Kent Bye is probably the better known; he is in indefatigable, intelligent host of the Voices of VR podcast, and someone whose thoughtful, philosophical insights into any and all aspects of immersive tech I value greatly (I wish I had his brain!). As for Molly, she is someone whom I first encountered because of her truly epic thread of snark about that infamous Cryptoland promo video, but she, too, is definitely someone to follow (she maintains the wonderful Web3 Is Going Just Great website, which chronicles the scandals, misdeeds, and crimes of the many crypto, blockchain, and NFT projects out there, an increasingly difficult task as the number of schemes proliferates!).

Here is the 2-hour-and-18-minute video itself, titled The Problem with NFTs, by Dan Olson, a Canadian whose YouTube channel Folding Ideas has just over half a million subscribers:

Dan starts his video by providing some historical context, discussing the financial crisis provoked by the mortgage bond crisis of 2008, and then moving on to Bitcoin, trumpeted as an end to the evil of centralized banking. Here’s a prime quote:

Rather than being a reprieve to the people harmed by the housing bubble, the people whose savings and retirements were, unknown to them, being gambled on smoke, cryptocurrency instantly became the new playground for smoke vendors. This is a really important point to stress: cryptocurrency does nothing to address 99% of the problems with the banking industry, because those problems are patterns of human behaviour.

—Dan Olson

He then talks about Ethereum, and how it was created in part to address some of the problems posed by Bitcoin. Dan provides one of the best overviews of “proof of work” versus “proof of stake” that’s I’ve encountered to date. After covering the basics of blockchain, he turns his attention to the Non-Fungible Token market, discussing the whole “code is law” premise of smart contracts at length. His highly entertaining exploratory foray into the current NFT market space is well worth the price of admission alone! Near the two-hour mark, Dan discusses Decentralized Autonomous Organizations (DAOs).

Honestly, this video is so good, and so information-dense, that I would strongly encourage you to set aside two-and-a-half hours, and watch it in full, with the subtitles on. Like me, you’ll probably rewind it several times to review some of Dan’s better arguments! Molly and Kent are right; this video is *chef’s kiss* (Dan even briefly includes screencaps of Molly’s website and that infamous Cryptoland promo video!).

But it’s the final chapter of this video where Dan is on point, and on fire:

In 2008, the economy functionally collapsed. The basic chain reaction was this: bankers took mortgages and turned them into something they could gamble on. This created a bubble, and then the bubble popped.

When you drill down into it, you realize that the core of the crypto ecosystem, the core of Web3, the core of the NFT marketplace, is a turf war between the wealthy and ultra-wealthy. Technofetishists who look at people like Bill Gates and Jess Bezos, billionaires minted via tech industry doors that have now been shut by market calcification, and are looking for a do-over, looking to synthesize a new market where they can be the one to ascend from a merely wealthy programmer to a hyper-wealthy industrialist. It’s a cat fight between the 5% and the 1%.

Ultimately the driving forces underlying this entire movement are economic disparity. The wealthy and tenuously wealthy are looking for a space that they can dominate, where they can be trendsetters and tastemakers and can seemingly invent value through sheer force of will.

This is, in my opinion, the blindspot of many casual critics. The fact that tokens representing ape PFPs are useless, yet somehow still expensive, isn’t an overlooked glitch in the system, it’s half the point. It’s a digital extension of inconvenient fashion. It’s a flex and a form of myth-making.

And that’s how it draws in the bottom: people who feel their opportunities shrinking, who see the system closing around them, who have become isolated by social media and a global pandemic, who feel the future getting smaller, people pressured by the casualization of work as jobs are dissolved into the gig economy, and want to believe that escape is just that easy. All you gotta do is bet on the right Discord and you might be air-dropped the next new hotness… This is your chance to stick it to Wall Street and venture capitalists, as long as you pay no attention to the VCs behind the curtain. The line can only go up.

It’s a movement driven in no small part by rage, by people who looked at 2008, who looked at the system as it exists, but concluded that the problems with capitalism were that it didn’t provide enough opportunities to be the boot. And that’s the pitch: buy in now, buy in early, and you could be the high tech future boot.

Our systems are breaking or broken, straining under neglect and sabotage, and our leaders seem at best complacent, willing to coast out the collapse. We need something better. But a system that turns everyone into petty digital landlords, that distills all interaction into transaction, that determines the value of something by how sellable it is and whether or not it can be gambled on as a fractional token sold via micro-auction, that’s not it.

A different system does not mean a better system; we replace bad systems with worse ones all the time. We replaced a bad system of work and bosses with a terrible system of apps, gigs, and on-demand labour.

So it’s not just that I oppose NFTs because the foremost of them are aesthetically vacuous representations of the dead inner lives of the tech and finance bros behind them. It’s that they represent the vanguard of a worse system. The whole thing, from OpenSea fantasies for starving artists to the buy-in for pay-to-earn games, it’s the same hollow, exploitative pitch as MLMs. It’s Amway, but everywhere you look, people are wearing ugly-ass ape cartoons.

(UPDATE Jan. 23rd, 2022: if you have a bit more time left after watching Dan Olson’s video, you can peruse this thread of comments on the r/Documentaries community on Reddit. Be sure to sort by Best to read the best ones first!)

I leave you with another very recent YouTube commentary video I watched a couple of days ago, this one by the incomparable Josh Strife Hayes, who has sharpened his patented snark by reporting on countless questionable MMORPG projects over the past few years (a growing cottage industry).

From now on, this 22-minute video is what I am going to send to anybody who asks me what an NFT is, because Josh so mercilessly strips it down to its bare essentials, so that everybody can see just how ludicrous the whole setup is! The NFT-owner emperor is truly wearing no clothes; in fact, he’s just holding a spot in a line-up!

If, after watching Josh’s video, you have a bone to pick with it, I’d love to hear your comments (aside from his British pronunciation of the word “fungible”, which makes me wince). Where Dan Olson slays with facts, Josh Strife Hayes prefers to devastate with sarcasm, and he’s so good at it that it’s a joy to behold.

So, it would appear that there is now a determined push-back on the current silly season of NFT hyperbole, and I for one welcome this development. Too many people—particularly baby investors—are buying into the breathless hype of ill-thought-out NFT projects, which are proliferating like the Polynesian rats introduced to Easter Island. Commentators such as Dan and Josh are doing us all a service with their bracing commentary on this madness.

*FULL DISCLOSURE: I possess zero NFTs, and I only own one cryptocurrency, the Neos Credit (NCR), which I earn as a side benefit of being a monthly Patreon patron of NeosVR social VR platform. And, in that case, NeosVR is an actual, working metaverse platform for which you can create an avatar, and which you can currently visit, explore, and build in! In other words, there’s a THERE there, unlike so many currently hyped blockchain-based projects, which are essentially handwaving and hot air. Caveat emptor!

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