NFTs are ‘in.’ Hitching a ride on the muddy flaps of the blockchain bandwagon, touted as the saviour of artists and musicians and an end to royalty rip-offs, they are, in fact, flawed.
While some (probably very few) people are making huge amounts on the fact that NFTs are, well, non-fungible, it turns out that NFTs are, in fact, worse than fungible.
The NFT bubble has formed quickly and some are already comparing it to the tulip debacle that came close to bankrupting some European economies in the 17th century.
The reason is that NFTs are easily shared. Or stolen.
For instance, in homage to the original pirate music site, BitTorrent, there is now the equivalent for NFTs and it is managed by an artist in Australia.
His site hosts terabytes of what should be non-fungible tokens. The whole NFT craze is, according to site owner Geoffrey Huntley, ‘meaningless.’ NFTs are generally simply hyperlinks to publicly available images, hosted on Google Drive or similar.
If NFTs are basically a worthless fad, then what will the knock-on effect be on other ethereal concepts. And what does it say about (and how will it damage) the people making the money at the moment.
If NFTs are a construct, and they are proved worthless, it could bring a lot of other things down with them.
The whole cryptocurrency craze is proving, at best, exciting. Bitcoin is now seen as the bellwether crypto (and remember where that came from).
It looks as if it is here to stay, in some form, but, as Peter van Dooijeweert of Man Group says, “the market has become a video game. It feels like Candy Crush.”
The market has grown from $500 billion a year ago to £3 trillion last week, only to plunge again. Remember when Musk moved the Dogecoin price so dramatically – with a tweet?
NFTs are testing just how far virtual assets can go. The problem is that, like other bubbles before it, it is the famous, the cool and the aspirational who are making the moves and making the money.
If it turns out that NFTs are the virtual asset that turns out to be just virtual air, a lot of ordinary people will lose thousands. And the rich and famous will lose, well, possibly everything.
After that, who knows what the effect will be on the whole cryptocurrency game? With entire countries declaring themselves ‘Bitcoin City tax havens’ the ramifications could be catastrophic.