NFT's....

[Christine Dion]

Hello!
In a 3-Point Perspective Podcast episode I remember the guys talking about NFT's. If I remember correctly they were not speaking favorably about them.

I'm in an online artist business group and one woman is talking highly about how she has sold out of all her art NFT's and is obviously doing well.

Can anyone shed light on why an artist should/shouldn't pursue NFT's?

Thanks!

[NessIllustration]

@mrsdion NFTs are weird. They're more akin to an investment than anything else, and a risky investment at that. It's very similar to cryptocurrency investment. Several months ago there was a big buzz about it and a few people made millions. This made many people jump in trying to make a quick buck. The resulting crash was abrupt. There are many people who spent millions on an NFT with the thought of selling it for double, and ended up getting a highest bid of $30. Pretty wild!

Everyone in the NFT space is trying to make money, but there aren't enough people in it out of pure interest to really sustain the industry. Everyone wants to sell, no one wants to buy. Many people are also stealing art to sell as NFTs, or trying to hire artists and pay them peanuts to create NFTs for them. All in all, the space is a cesspool of art theft, scams and greed. The peak point of interest in NFTs has also passed months ago and is now free falling. It may bounce back one day, but that day is not today.

[lpetiti]

@NessIllustration I doubt it’ll bounce back, it’s been tanking lately. I can’t say I’m disappointed either, it’s such a bad thing for the most part

[A Former User]

@mrsdion

I have strong opinions of this, and I would strongly advise AGAINST artists jumping onto the NFT bandwagon just because of the hype. Also, I have a technical (software) background and am able to understand and critique the technology itself + the surrounding phenomenon from a technical perspective. There have been many other good critiques made by technical writers that I will link to throughout this post.

The whole field abounds with severe technical and ethical problems.

First of all, the concept of an NFT, a non-fungible token, while a totally valid and useful thing to digital artists, does not need to be tied to blockchain technologies at all. In fact, the whole point of an NFT is to verify the uniqueness of a digital asset, and this inherently requires a trusted central authority to come in and validate identity and uniqueness, which is totally contra to the "decentralization and anonymity" hype that surrounds blockchain circles. So why on earth were NFTs as we know it designed to be stored on the blockchain? I don't know the specifics of what the original NFT founders were thinking (but I do know that what the NFT ecosystem turned out to be, rife with grifts and scams and art theft, mostly to the detriment of artists, was not what they had in mind), but there's a reason that NFT's boomed, and that's because it, much like most of crypto, was (and is) a speculative venture that mainly attracted/attracts people who were/are keen to make a quick buck more than they were/are keen about art or supporting artists in any real way.

What do I mean by "NFTs never needed to exist on the blockchain"? Others have written more detailed essays on this, such as this one by Molly White: https://blog.mollywhite.net/digital-artists-post-bubble-hopes-for-nfts-dont-need-a-blockchain/, which I do recommend anyone interested enough in the idea to read. But to summarize, we've had the technologies available to enable the concept of an NFT way before blockchain was ever invented and hyped. The question of how to represent and verify unique identities digitally was something that has been tackled and solved even before the dot-com bubble, using something called public-key infrastructure (PKI), which continues to be used in software systems to this day. (For example, the national digital identities of countries like Singapore and Estonia are backed by public-key infrastructure).

Certifying unique digital identities sounds awfully similar to certifying ownership of a unique digital asset, and at the end of the day it pretty much is the same. With some tweaks you could use the same basic concept as PKI to build an NFT ecosystem - totally sans blockchain, whose oft-hyped properties of decentralization and anonymity actually create more trouble for artists who are creating NFTs for the sake of tying their identities to their works, not for remaining anonymous.

At the end of the day, just like in PKI, you need a chain of trust leading back to a centralized authority that everyone trusts. When such an authority issues a certificate of ownership to you , people trust your certificate of ownership because they trust the authority that issued it (like how people trust fiat money because they trust the government). When you sell a piece of art to someone else, the centralized authority, which could be an art-dealing platform, can revoke your original certificate of ownership and issue a new one to the new owner with whatever transaction metadata required. And et voila, you have an NFT, free of blockchain.

I hope this is enough to convince you that NFTs as we know it today are, just from technical first principles, highly problematic and unnecessarily complex.

---

And moving on to the other ethical problems:

1. The entire cryptocurrency and blockchain ecosystem is highly environmentally destructive. Do we really need to be burning mostly fossil-fuelled compute to solve useless “mathematical problems" for blockchain transactions in the midst of impending climate disaster? Even if Ethereum's Proof-of-Stake algorithm is more energy-efficient than the original Proof-of-Work, you're still burning energy to do useless work, and the planet pays for it. As much as possible I want my art to be a force for good in the world, not a force for destruction.
2. The user experience is unnecessarily complex and confusing...largely because of the totally unnecessary use of blockchain (as already outlined above). If you are someone who has no interest or experience in crypto and blockchain and is just jumping in because everyone else is, I can guarantee you'll feel the headache (https://blog.mollywhite.net/the-nft-creation-user-journey/)
3. The whole area, unfortunately much like the rest of crypto, is rife with grifts and scams. Instead of benefiting artists, there are many artists who have found their works that they posted online getting stolen and sold as NFTs on platforms like OpenSea (https://www.davidrevoy.com/article864/dream-cats-nfts-don-t-buy-them). In the meantime scammers and thieves and speculators profit from flipping the tokens down to the next level of the Ponzi pyramid - yes, the most barefaced statement one can make about much of the current NFT scene is - it's basically a Ponzi scheme (though of course you will find many crypto-bro articles online attempting to "debunk" this "myth"). Speculators are in it to make a quick buck and exit, leaving behind suckers who will bear the cost when the bubble bursts, as has already happened! (https://www.businessofbusiness.com/articles/the-backlash-against-nfts-one-artist-says-theyre-a-classic-ponzi-scheme-fraud-theft-crypto/)

---

More links:

• More on how NFTs can be made without blockchain: https://www.expensivity.com/creating-nfts-without-crypto/
• Tracking "some examples of how things in the blockchains/crypto/web3 technology space aren't actually going as well as its proponents might like you to believe." https://web3isgoinggreat.com/
  • On NFTs in particular: https://web3isgoinggreat.com/?tech=nft
• On environmental impact:
  • https://www.theverge.com/2021/3/15/22328203/nft-cryptoart-ethereum-blockchain-climate-change
  • https://scribe.froth.zone/the-unreasonable-ecological-cost-of-cryptoart-2221d3eb2053
• On the crypto collapse in general: https://blog.mollywhite.net/stop-saying-they-shouldnt-have-invested-more-than-they-can-afford-to-lose/#fn:fn8
• Critiques on blockchain: https://blog.mollywhite.net/blockchain/

[danielerossi]

@JQ Excellent article. I didn’t know that about PKI and that NFTs didn’t need to rely on blockchain. Another example of misinformation all over the internet.

When I first heard about NFTs and that first sale of the rainbow cat meme for a ridiculous amount of money, I immediately recalled the dot com bust of the late 1990s. And lo and behold, history repeated itself.

P.S. I think you meant to type in your first line that you strongly advise that artists not jump on the bandwagon

[A Former User]

@danielerossi Indeed, what a bad typo thanks for the catch!

[NessIllustration]

@lpetiti I agree! Public sentiment has been really bad lately. When companies announce they're releasing NFT products, everyone goes "ugghhh" and several of those launches have done embarrassingly bad.

[Christine Dion]

@NessIllustration Thanks so much for your response! Sorry about my delay, we had a death in the family. I appreciate your insights. I don't want to jump into it, but I think it's important to understand what it's all about. I like to live in the 'real' world...an actual painting/illustration!

[Christine Dion]

@lpetiti I agree as well from what I'm seeing!

[Christine Dion]

@JQ Holy guacamole! Thank you SO MUCH for all this information! I will be passing it along to my artist/illustrator friends who are thinking of jumping in!

[NessIllustration]

@mrsdion I'm so sorry to hear that hun, my condolences.

[kayleenartlover]

@NessIllustration One example I've heard of what they are is like how people "buy" famous fine art but really they just get a piece of paper that says they own it but can't ever physically have it.

[NessIllustration]

@kayleenartlover It's like owning a unique digital file. There can be copies, but there is only one original. I don't know, the distinction may matter to some but it seems really weak to me...

[willicreate]

For those remain uncertain what NFTs are, this finance-focused video does a good job explaining it in layman's terms.
YouTube: Two Cents | What the Heck Is an NFT? (And Should I Buy One?)

If you and your colleagues want to get into the NFT market, it is best to do research on those who've succeeded. Take note how gatekeepers continue to push artwork similar to the Bored Apes series or Beeple's works.

This podcast interview with artist Fewocious can give a understanding on getting discovered in the NFT market. The quick takeaways from the interview is:

• Build a cult of personality within a niche community. (In Fewocious' case it was a LGBT+ art group.)
• Get scouted by a NFT speculator (not dissimilar from getting scouted by an art buyer or art critic.)

There's too much focus on the financial implications of NFTs. The true value of a blockchain is the potential to replace legal paper documents and managing product distribution (the video explains this).

In the (near?) future, people who buy, commission, or resell art will want a digital Certificate of Authenticity. Customers can opt to buy a physical or digital product with a limited issued NFT at an additional price. This can be of value to those who are considering resale.