The boom in NFTs is exciting to many, troubling to others and just downright weird to everyone else.
It is exciting when a new class of digital asset is created, whose main goal is to finally protect the rights of the artists who own them.
It is troubling when the boom in NFTs is also creating tension and friction between the evangelists and the very artists that NFTs are trying to protect. The problem is not that artists think the concept is bad, it is that this newfound focus is opening them up to online badgering and abuse.
And more and more NFTs are being stolen. In many cases, stealing an NFT is easy. You simply ‘right click and save as.’ Flaws are also common on the marketplaces themselves. One such, called Opensea, was raided by people able to exploit a crack that allowed them buy NFTs at a fraction of their market value and resell them immediately, at a profit.
Thieves managed to pocket over $1 million before action was taken.
The boom in NFTs is also creating weird forms of arbitrage, that no one has quite figured out, as the market is so young and unregulated. There are examples emerging of the same NFT being passed back and forth between two wallets (one entity can own more than one wallet) in order to artificially boost trading volumes and create a false idea of the value of an asset. Most of the techniques now being exposed would be illegal on traditional trading platforms.
The boom in NFTs is creating a mesmerising set of circumstances that are, frankly, baffling. The concept is possibly good, although seriously ‘out there,’ the problem is that such a new and badly thought through trend lays the whole thing open to abuse.
And in this day and age, if you open something up for abuse, abused it will be.
The boom in NFTs is making some people very rich. The problem is it is making the wrong people rich and until someone grips the problem and starts to impose rules with teeth, the wrong people will carry on making the money. And the artists will walk away.