The Case for Not Treating NFTs as a Scam

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    Sylvia T

    The Case for Not Treating NFTs as a Scam
    Proprietary gifs may seem silly, but Christians have reasons to think about digital ownership.

    “Why would I buy a jpeg I can copy and paste for free?”

    That is how most conversations about NFTs (non-fungible tokens) begin. And it makes perfect sense. People are purchasing NBA clips for thousands of dollars—which can be streamed without cost on YouTube.

    “Crypto degens” are changing their Twitter profile pictures to pixelated cryptopunks to signal their membership in a new libertarian world order. As the NFT market soars to a value of $7 billion, it’s been compared to the dot com bubble, where speculation-fueled investment flooded the market.

    However, before you write off NFTs, revisit David Letterman speaking to Bill Gates about the internet in 1995. Letterman poked fun at Gates, mocking people who were excited about the internet’s ability to broadcast baseball games. Letterman smiled and asked, “Does radio ring a bell?”

    Gates tried to explain the difference between radio and the internet by pointing out that baseball fans could listen to the game whenever they want, not just live. But Letterman wasn’t impressed—“Do tape recorders ring a bell?” he asked.

    Or recall the time when Katie Couric and the entire Today Show crew made fun of “@” symbols and asked, “Can you explain what internet is?” Or remember Newsweek’s notorious 1995 editorial headline that read, “The internet? Bah!”

    Christians especially did not begin to think seriously about the internet (or its successor, social media), until well after they were adopted at a popular level. Pastors did not prepare their congregations for the promises and pitfalls of the web. This left Christians caught up in the cultural tide, lacking discernment and wisdom with how to engage.

    Perhaps that’s why 19 of the top 20 “Christian” Facebook pages are actually run by nefarious, foreign troll farms, and millions of believers sharing their posts are totally unaware.

    The internet can be a powerful discipleship tool, but without a serious understanding of the technology and its ethical and theological implications, Christians are likely to be “blown here and there by every wind of teaching and by the cunning and craftiness of people in their deceitful scheming” (Eph. 4:14).

    So let’s avoid past errors, and start with two basic questions: What are NFTs, and how will they be used in the future?

    What are NFTs?
    Five hundred years after it was painted, the Mona Lisa still captivates crowds of tourists who travel to Paris every year. There are no doubt hundreds of thousands of replicas, but the small painting that hangs in the Louvre is the original. And how do we know that? Because it’s been thoroughly authenticated by professionals.

    Now imagine if Leonardo da Vinci were alive today. How would someone know that a piece of his art was authentic? How could da Vinci make a living from his artwork?

    Enter NFTs.

    An NFT is proof of ownership that is verifiable by a public ledger of transactions—they make it possible to spot when something is real and when it is a forgery, such as a knockoff Mona Lisa.

    This public ledger, referred to as the blockchain, is the best method we’ve developed to prove whether something online is authentic—based on publisher source or the publication’s time stamp.

    Consider the music industry—and more specifically how musicians are paid. Musicians have long been at the mercy of large record labels, both for how well and how often they are compensated.

    When a record is created and the digital masters are made, they are not owned by the musician, but by the record label. And the record label determines the rules the musician must play by.

    The record labels then work with third parties who can encrypt their music to protect them from theft and distribute them on proprietary marketplaces. Those who “own” the songs cannot sell or transfer them to another digital platform. For example, if you buy a Taylor Swift album on Apple Music, you can’t listen to it on Amazon.

    In today’s era of the web, you do not own anything. That is, until now, we could not attach proof of ownership to anything online. Which is why NFTs have the potential to change the future of digital ownership.

    They change the artists’ contract with the record label. They change the record label’s partnership with third-party marketplaces. They change the consumer’s relationship with the art—which can now be owned anywhere and everywhere they exist digitally.

    The future of NFTs
    It’s helpful to look at the future of NFTs (digital ownership) in three different categories, including digital art (think of an original artist creating art similar to the Mona Lisa but on a computer or a musician releasing an album), collectibles (think of sports or Pokémon cards), and digital property or utility.

    This technology will replace the complex and difficult-to-use systems that we currently rely on. Below is a brief list of real-world use cases in which you’ll see NFTs in the coming months and years:

    Musicians can now own their own music, prove they own it, and earn income in a matter of seconds based on sales instead of waiting two-plus years based on a standard 36-month record deal. Brands can also create NFTs as digital representations of their physical assets for the metaverse; some already are (e.g., Adidas, Budweiser, Pepsi, Zara, etc.).

    If you buy a car, the contract can be an NFT. Similarly, real estate titles can be NFTs. Traditional real estate and vehicle transfers require complex systems that NFTs solve. Your airline ticket, your conference pass, and your seat at the football game could all become NFTs.

    Location-based NFTs, or POAPs (proof of attendance protocols), can prove that you were somewhere, like a concert ticket or pictures of a special event. And if something magical or record-breaking happens at that event, you can now prove you were there and sell that NFT on a secondary market to collectors.

    University and college degrees can be NFTs. Right now, the process is complicated: Someone graduates from a school and needs proof of their graduation to get a job or apply for more schooling. They might have to email admissions, try to find a file in their old school login, or, worse yet, request a paper copy.

    With NFTs, all you need to do is log in with your web3 wallet (your online profile that interacts with the blockchain). It instantly verifies that you are a grad from whatever school, and associated with that is all the metadata necessary that shows your degree, grades, year you finished, etc.

    If you’re a parent of a young kid, I’m sure you’ve been asked at least once if you could purchase Robux for a new Roblox skin or V-Bucks to purchase the latest Fortnite outfit. This can now become an NFT that can then carry over into other applications. Again, these gaming NFTs are verifiable because of the blockchain.

    In short, we’ve had 25 years of an internet where people couldn’t own things digitally. With the invention of the blockchain and NFTs, that changes.

    Almost instantaneously, digital scarcity becomes a reality—upending the landscape of digital economics. In the current era of platform-based digital economics, digital goods have limited value because ownership and property are non-transferable.

    As of now, I cannot easily move my Kindle purchases to Apple Books, nor can I resell or give away my digital property. Owning a first printing of Harry Potter is valuable, while owning a first digital copy is useless.

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