Caveat Emptor: A catchphrase for those hooked on NFTs
In the new, hyped world of cryptocurrency, it’s clear why some artists have turned to selling their work as NFTs to create an entirely new revenue stream. As their reputations and names are attached with an NFT, they should closely look at the other side of the coin now. Just like the NFT system, the platform on which NFTs sit – the Ethereum blockchain – is a bit outdated and unable to adapt to the volume and magnitude of the global, frenetic adoption.
The Ether (cryptocurrency) can be “mined” (or “created”) by ordinary people using computers that solve complex mathematical equations. In exchange, these people are gifted coins, which becoming more valuable gives greater the impetus to get mining. It’s a symbiotic relationship: you scratch my back, I’ll scratch yours. Now, the problem is the electricity used to mine Ethereum is phenomenal.
To put it in perspective, more carbon emissions are produced from the electricity for mining new Bitcoin than New Zealand! A single piece of artwork sold as an NFT racks up a minimum of two weeks of household usage of energy in a transaction. Would celebrities endorse this? These environmental impacts of Ether mining have caused some celebrities in the West to ditch it altogether until more sustainable methods are introduced.
Interestingly, NFTs have been described as “pyramid schemes” by artists. Many rich and powerful people world-over have invested in Ethereum, and therefore have a vested interest in seeing it succeed. Those same investors are the ones who write fat cheques that grab headlines. The bigger art sales, like the $69 million purchase of Beeple’s artwork, was made by a person who has a huge stake in the success of cryptocurrency. The pyramid aspect of the NFT system means it’s incredibly hard for emerging celebrities to get on the ladder. Without the following or the fame, many artists struggle to sell their work. The already famous, those celebrities dropping NFTs and already have a huge following, are the ones raking in the moolah. This is a strong temptation and many people are sold on this dream of making thousands and thousands of dollars.
Celebrities must be careful with the notion of imagined value. It’s important to look at where the money is actually going, and that’s why waiting is the right thing. Celebrities should act with integrity and intention, and the idea of buying into a ‘getrich-quick’ scheme that destroys the environment, is inherently unethical and problematic. Even just the impact of selling NFTs may put off the audience and therefore the onus rests on artists on the real worth of the exercise. However, in light of this impending backlash over the artists who choose to embrace NFTs as a way of making money, is not where lies the actual problem. So, it can be tempting to blame or get angry at other artists for their decision to participate in NFTs. But, it all boils down to how Ethereum is designed and the people profiting off it.
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