Photo By: Grandbrothers/Shutterstock.com
Non-fungible tokens (NFTs) have been a hot topic of discussion online for a while now. They have taken off in the last couple of years especially, with sales of NFTs surpassing $2 billion in the first three months of this year alone.
When it comes to NFTs, people tend to fall into two camps; either you think they’re a revolutionary idea or you see the concept for how silly it truly is.
For those who don’t know, NFTs are things that are uniquely stored on a digital ledger. What this means is that any particular NFT — be it a photo, video, song, etc. — can’t be interchanged with another. It’s a completely unique piece of digital data that can only be owned or purchased in its authentic form.
Of course, many people have been quick to point out the silliness of this concept, with many people screenshotting NFTs and posting them on social media, antagonizing owners who claim they’ll sue them for stolen property.
Let’s be honest, the NFT is only hyped by free marketeers and those who see them as a way to put exorbitant prices on digital mediums in the ongoing effort to privatize the internet as much as possible. The rise of cryptocurrency and NFTs is just another step away from those pre-2010s dreams of the internet as a utopian public space that would allow for the free flow of information and spontaneous collaboration between enthusiastic users.
To give you an idea of how the NFT functions more as a way of monetizing useless things, Twitter’s CEO sold his first tweet for $2.9 million. If this doesn’t show how this is all just an excuse to gawk at ridiculously expensive exchanges of mostly pointless online artifacts, then I don’t know what will.
The idea might be nice for serious online artists who put a lot of work into their digital artwork, but I don’t see that being the main purpose of NFTs online without some serious regulation. As it stands now, the whole NFT scene isn’t much more than an online auction for those looking to nab “antique” pieces of internet history.
Furthermore, things get trickier with taxes, as NFTs are hard to categorize based on the criteria of Canada’s Income Tax Act because they can have a disposition that accords with capital gains, intellectual property and inventory of a business. This means those who buy NFTs are going to have to do a lot of the work themselves to find out how to file their NFT-related exchanges for their income taxes.
Then there’s the ecological aspect of NFTs. One study that looked into the carbon footprint of trading NFTs claimed that a single NFT transaction has a carbon footprint of over 14 times that of mailing an art print. Because there’s no third-party in the transaction of NFTs, like cryptocurrencies, a lot of energy goes into a process called mining — solving complex puzzles to keep financial security in check — which creates space for more transactions on a ledger called a “blockchain.” This uses tons of machine power, hence the large amount of greenhouse gasses.
Overall, NFTs sound like a potentially interesting idea for the sake of those niche online artists who are all too often ignored. However, like so many other digital spaces that are becoming more and more privatized, it’s a pipe dream that they will be of much value for creating genuinely interesting cultural exchanges.
As the provocateurs on Twitter have shown, this is a digital piece of media, a simulacrum of a truly authentic piece of art. So maybe we should look for another way to support those artists who aren’t selling funny YouTube videos that went viral a decade ago for millions of dollars.