Top 10 Reasons NFTs Are Hated
#10: Cheating the Artists
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Due to NFTs basically existing in a “Mad Max”-esque universe - more on that later - there’s not much protection for those artists that want nothing to do with the practice. Since NFTs began appearing everywhere after breaking into the mainstream, many artists, especially those that specialize in digital pieces, have found their work being stolen, minted, and sold as NFTs without their consent. On top of this, some websites that sell the tokens have been less than helpful to the complaints of artists when they discover their work is up for sale. Some NFT thieves have even created bots in order to scrape as much art as they can from the Internet, so they don’t have to.
#9: The Costs of Minting NFTs
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If you’re a beginner trying to get into the NFT landscape, minting images on a blockchain like Ethereum can be daunting. Especially because there are often hidden fees involved that could slice any profit you were hoping to make. The base cost of minting varies from under $1 to $1000. There’s also something called a “gas fee.” This is when the user has to pay extra for the increased computer power required. Essentially, it’s like a surcharge on a credit or debit card. The gas fee can also vary depending on the demand for cryptocurrency during minting. While some of the free minting websites will make cash by charging a percentage from the sale of an NFT.
#8: They’re Unregulated
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Yes, NFTs are unregulated. This means no pesky government interference! But it does mean this Wild West space has little in the way of accountability should something dodgy be going on. Nothing too bad, though; just things like fraud, theft, money laundering, tax avoidance, and market manipulation, which are all commonplace in this digital, free-for-all world. In the space of thirty days in December 2021, Nansen, the blockchain analytics platform, found around $2 million worth of suspect activity across the CryptoPunks and Bored Ape collections. There have also been accusations of “wash trading.” This is when a seller also buys their NFT to falsely boost demand. For those dabbling in the dishonest, there are few repercussions.
#7: Digital Theft
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If you own pricey artwork, the physical kind, there’s always a risk of someone coming in and stealing it. With digital art, that possibility could be even more likely. There have been cases of people who’ve seen their NFT collections vanish instantly when a hacker wormed their way in. In January 2022, Twitter user “larrylawliet” posted that their collection was stolen. According to them, their NFTs could have been sold for around $2.7 million collectively. After taking the digital artwork, the hacker sold the complete collection for just under $700,000. That same month, Todd Kramer, an art gallery owner in New York, had $2.3 million worth of NFTs stolen.
#6: Celebrity Obsession
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Every day, when you scroll through your social media feed, you’ll likely come across a celebrity you follow posting about their dive into NFTs. And many of them seem way too enthusiastic about them. Former Chelsea F.C. captain John Terry got in on the craze in early 2022 by promoting the Ape Kids Football Club. After making his chums sign up, the average price of the NFTs fell from $656 to $65 in a month. Other famous dabblers in NFTs include Paris Hilton, Jimmy Fallon, Eminem, and Brie Larson. In a world where the divide between rich and poor is further than it’s ever been, seeing celebs throwing cash around on digital art can be unsettling.
#5: They’re Difficult to Understand
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Let’s face it: NFTs are confusing. YouTube is filled with videos of people trying to explain the concept to beginners. But words like “blockchain,” “metaverse” and so on can be off-putting. This stops people from wanting to jump in and get involved as you have so much to learn. This provides NFTs with a massive barrier to entry. There’s also pressure from those already involved in NFTs trying to force new people into the landscape with the promise of making riches before it becomes too “mainstream.” But in reality, the only people getting wealthy will probably be the ones you’re buying the NFTs from before the price crashes. Sneaky people.
#4: Overhyped New Tech
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If there’s one thing that humans love, it’s new technology. Whenever a new iPhone or Samsung Galaxy is released, we all get really excited for the new era of modern life. But not every new piece of tech is a success. For example, in 2013, we all screamed in delight as Google Glass was announced. Now, it’s been forgotten to the sands of time. And this is likely the case when it comes to NFTs. Those that support the tokens have tried pushing their NFT passion onto mainstream video game companies. However, during the Game Developers Conference in 2022, 70% of developers surveyed stated their companies would have no interest in NFT implementation. Yikes.
#3: Environmental Problems
One of the biggest concerns of NFTs and cryptocurrency is their potential impact on the environment. NFTs often use Ethereum, which uses a process called “proof-of-work.” This verification system requires massive amounts of processing power to verify transactions. There have been accusations that creating a single NFT takes the equivalent of two months’ worth of electricity for someone living in the European Union. However, these accusations are currently unverified. With climate change being a big focal point, the fear of a new process potentially consuming huge amounts of energy is frightening. There is, however, a movement to find a greener way to develop NFTs with guaranteed renewable energy.
#2: The Bubble May Soon Burst
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According to analysts, the business of NFTs might be slowing down as its value begins to stagnate. At the start of March 2022, NFT tracker NonFungible stated the daily average sale price fell to just under $2,000. At the time of writing, it has increased to around $8,000, the highest on record. The current daily amount of sales is around 13,000, while the record was nearly 220,500 in August 2021. Bit of a contrast. The digital artist Beeple told the BBC that he believes the NFTs are in the bubble. If so, NFT successors will likely make us look back at the early stages of this revolution the way we look back at the early days of the Internet.
#1: They Promote Inequality
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Most people involved with NFTs like to think of themselves as taking back control from the elite on their decentralized platform. In reality, the token realm does the opposite. The blockchain analysis firm Chainalysis examined the NFT world from February to November 2021. They found that 360,000 NFT owners were holding 2.7 million minted images between them. Of those people, 9% controlled around 80% of the total value of the NFT market, essentially making the NFT game a rich person’s playground. It's a high-risk market that requires large amounts of capital to fully embrace. Really, it's not too dissimilar from everyday life, right?
