If you've been on the internet in 2021, chances are you've heard someone talking about NFTs. Chances are they weren't singing the praises of NFTs, either. Unless you're a tech billionaire, cryptocurrency investor, or experimental digital artist, you probably think NFTs are just another expensive boondoggle for the ultra-rich. There is truth to that, but the reality of the situation isn't so black and white.
So, in this article, we'll make the case for NFTs and tell you why they might not be as awful as you may have been led to believe.
Why People Hate NFTs: The Environment
The argument against NFTs is simple: There aren't products, they're files on a computer designed to be artificially scarce that only exist to make money for corporations and the wealthy elite by giving people something else they can flex on other people with.
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On top of that, NFTs are thought to be environmentally harmful because of how much electricity is needed to create, sell, and support NFTs. Electricity, mind you, that is usually not generated from a renewable source, so much like any industry that relies on fossil fuels, NFTs are thought to have a similar issue.
Both of these concerns are valid and refer to real-world problems; however, there is more to it than just the criticism. Take the worry that NFTs will accelerate the pace of global warming, for example. This would be absolutely true if all NFTs required the same amount of electricity, especially if the electricity used to power NFTs came from fossil fuels.
This isn't the case, though. Not all NFTs (or cryptocurrencies or blockchains) are created equal, and some methods of creating and supporting NFTs consume significantly less power than others. On top of that, today not all electricity that goes to NFTs comes from fossil fuels. And since renewable energy like solar power is becoming exponentially less expensive, less and less energy will come from fossil fuels to power NFTs going forward.
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Plus, cryptocurrency, blockchain, and NFT technology are still relatively young. The hardware we used to power this tech isn't as efficient as it can and inevitably will be. And as a business, if these kinds of technologies are indeed all about making money, then everyone who relies on it will be incentivized to develop methods and hardware that have as low an overhead as possible when it comes to a monthly power bill. Not to mention possible PR disasters.
Does this mean that some NFTs, today, as they currently exist aren't bad for the environment? Absolutely not. But it is to say there is significantly more to the conversation than the simple idea 'NFTs are bad for the environment.'
Why People Hate NFTs: They Aren't Real
While many are concerned about the environment, many drive cars that burn gasoline, too. For a lot of people, the main issue isn't how much electricity someone needs to create an NFT but rather what an NFT actually is and does.
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An NFT doesn't exist physically, and even if you buy a digital artwork NFT, for example, you'll still be able to view that artwork all across the internet. So, for many, artificial scarcity and an often hefty pricetag all for what is essentially a virtual certificate of ownership over something you don't really own is kind of existentially terrifying.
This may well be existentially terrifying, but unfortunately, this kind of digital ownership of media products has become a ubiquitous practice over the course of the last decade. Make no mistake, if you've ever bought a game digitally, paid for a song you downloaded, or rented a movie online, you've had existentially terrifying experiences before.
Why You Should Either Like NFTs and Microtransactions or Hate Both
When we buy digital content in the modern-day, whether it's a skin off a game's microtransaction shop or anything else, we aren't buying a physical product and we have very few rights to the files we did purchase. Plus, that same movie you paid $5 for you can Google and find uploaded to a random streaming site for free, just like you can view an NFT artwork for free.
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So, what's the difference between buying an NFT video game skin and just buying a skin? Practically speaking, nothing. Except the NFT makes a lot more sense, given all else is the same. If you buy a skin from a game, usually you can't ever transfer it out of that game to use with another game, you don't have particularly good documentation verifying you've purchased and owned it, and chances are you can't actually resell it after you've bought it and gotten tired of it.
NFTs are, due to the nature of the technology, a digital record of purchase; they would be easy to transfer from game to game, particularly within the context of a certain publisher; and they have real-world value and can be resold. Some of these features may even justify an increase in price.
Say a skin normally retails for $5 but you can buy an exclusive NFT variant of the skin for $15. Three times the cost may feel like a steep increase, but when you get tired of it in a few months after it's no longer being sold, you could sell it for what you paid or even more.
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Naturally, there are a million ways game developers and publishers can stack the deck to make NFTs strictly worse than the microtransactions they've pushed down gamers' throats for over a decade now, but the technology itself can bring a ton of improvements to the microtransaction business model as it currently exists.
On top of all of this, it's also fair to acknowledge that if you don't like microtransactions and think they're predatory schemes to replace content in video games with an endless series of paywalls, NFTs aren't the answer. If anything, they further entrench this monetization model in gaming, making microtransactions seem all the more real and legitimate while still giving publishers the opportunity to make billions off microtransactions.
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