In the last two weeks half of my artist friends have either set up shop on Opensea or have publicity condemned NFT’s as pure uncontrollable evil. Collectible card games, comics, digital currency, old video games, old books, it’s all on fire right now so it’s not really surprising that something like CryptoPunks would gain traction too.
I’m not going to explain what an NFT is because you can easily google it for a second and come back here. I remember seeing NFT’s spring up a few years ago, back when it was much harder to buy/sell digital currency than it is now. Ethereum was cheap, and the concept of using this technology to provide proof of ownership was a novel idea. Using proof of ownership in this way gives the artwork value since it ties the work to the original artist and creates scarcity. Long ago I thought of using a system of QR codes with keys that could be printed and stuck to the back of a print or canvas by the artist to ensure the future owners had an original work. The problem with that is a QR code is just a sticker and can be slapped on anything claiming that I made it. With NFT’s even after the artist is gone as long as the network is still there you still have the provenance that says it’s real. On some platforms the artist can even set a commission to gain money when the art is resold (typically much higher than what they originally sold it for). Normally, you sell a painting for X dollars to one buyer, the gallery gets a cut and you get the rest. The end. That new owner can now sell it for exponentially more money later which you, the original artist, never get to see.
So what’s bad about this? Using brand new technology to help artists make money sounds like a great thing, and it is. However, due to how much crypto has exploded in the last few years the tech hasn’t advanced in line with the growth. Most NFT platforms allow you to set up an account and just start uploading things to sell. Sounds accessible? It is, but it’s also too accessible. Anyone can make an account and just upload whatever, including artwork or content they don’t own. From what I’ve seen it can take a few weeks or months to get verified on some platforms and a quick scroll though the art will tell you that any old thing from MS Paint can be uploaded. Theft of online artwork has been around for a long time. You’ve seen the cropped out watermarks and blatant stolen images on overseas t-shirt websites. It’s a huge issue that’s now being conflated with an emerging technology that should be working in the artists favor and not against them. (I did find a platform that was invite-only, meaning artists were inviting fellow creators and the quality of the NFT art was obvious.)
Then there is the second issue, the one you see brought up the most around crypto, the heat. The transaction verification for digital currency requires dedicated servers that use a lot of electricity. We all know what a computer does when it’s running full blast, it heats up and has to be cooled to run efficiently. If I attempt to run a game on my MacBook it will make a sound like it’s about to take off from a runway before burning the table. “It’s killing the planet!” “You’re ruining the environment!” – all common things you hear from people talking about crypto in general due to the electricity use alone. Had WhateverCoin gained value slowly, along with the rate of innovation of the hardware (the efficiency) this wouldn’t be an issue. Yes, server farms aren’t running on GPU’s anymore, they have custom hardware, but even that will become too costly to run at this rate. The more efficient the hardware gets the less electricity will have to be used to verify transactions and the less heat that will be generated and require cooling. There is monetary incentive to innovate here but hardware takes time to engineer vs how fast speculation can drive up value.
TL;DR // Cryptocurrency and NFT’s are a great innovation, the hardware technology and intellectual property security just needs to catch up.