NFTs started with a bang. They were all over the internet and people were trading them for a hefty amount. However, times have changed. NFTs are being criticized now for inefficiency and lack of security. But why do people hate NFTs and what has caused this sudden shift of opinion? In this article, we will try to find the answer. We will also go over questions why are NFTs bad for the environment and why to artists hate NFTs.
What are NFTs?
Many people look out for the answer to what are NFTs. NFTs stand for Non-Fungible Tokens that are created by using the same type of programming used for cryptocurrencies. The NFTs are cryptographic assets that are based on blockchain technology that cannot be traded or exchanged like other cryptographic assets. Cryptocurrency and physical currency are fungible meaning that they can be exchanged for one another.
Why Do People Hate NFTs? Full List of Reasons
NFTs have been in the news for all the wrong reasons lately. Lots of people are now coitizing it and it has prompted the question why do people hate NFTs. Some of the possible reasons are mentioned in the list below.
1. NFTs are unregulated
The cryptocurrency market is not regulated by any organization and cryptos include NFTs as well. In unregulated markets, the money is not safe once it leaves from your end. If any fraudulent transaction takes place the bank can revert back the lost amount but if you get scammed due to crypto then there is no way you can get back your money and this feature attracts money laundering as well. This is a common reason why do people hate NFTs.
2. NFT values are Volatile
Prices in every market fluctuate very frequently be it the stock market or the crypto market. But things are very different in the crypto market because there is no way to calculate the cost of the assets at the day’s end. People earn huge profits one minute and lose it all the very next minute. The supply and demand theorem decides the value of the NFTs, which means if there’s a huge demand for the NFTs then their price will move upwards and vice-versa.
3. Users steal intellectual property
Initially, people considered NFTs as a plus point for the artists because it was thought that the NFTs will tokenize their art and sell the same on the platform. But there are many loopholes in this practice as the images can be easily duplicated and stolen from the real artists and if someone is selling the artists’ work without giving them credits then it amounts to stealing of Intellectual property.
4. Unfair advantage in the Gaming industry
The developers of the gaming industry are planning to incorporate NFTs into the gaming system to increase revenue without doing much hard work. But gamers around the world are against his move because there’s no use of NFTs in games because due to this, gamers will be unable to change or modify skins or weapons outside the system of the developer. This is a common reason why do people hate NFTs.
5. NFTs hurt the environment
A lot of electricity is required to operate huge blockchain networks. According to the reports large blockchain networks consume more energy than some countries. The world is witnessing climate change and during these times using the non-renewable sources of energy to mine the NFTs is a big problem. This is a common reason why do people hate NFTs.
6. High risk of scam
The new NFT enthusiasts are most vulnerable to the scams related to NFTs. The most common scam you find in NFT projects is the Rug Pull in which the creator of the NFT runs away with the money and disappears. People also get scammed through the wash trading technique. There are many instances when a group of people inflates the bid to increase the price of the item. This is a common reason why do people hate NFTs.
7. NFTs are a bubble
People around the globe are of the view that the NFT world is a bubble that can burst anytime. Investors from every sector supported the NFT rise and millions of transactions took place in the NFT space therefore the market of NFTs is growing at a faster rate but there are chances that it may collapse at the same rate as well.
8. NFTs have high Minting costs
Minting helps in verifying NFTs in the blockchain. The cost of the minting process is very high due to the gas fee and the computational power for each transaction. The costs also depend on the speed of the transaction because a slow transaction will use more resources in comparison to a speedy transaction and also because the prices of gas fluctuate on a regular basis which may cause an increase in the cost of a slower transaction. This is a common reason why do people hate NFTs.
9. NFTs are overhyped
NFTs are overhyped and that is the sole reason for attracting large investments. NFTs cater to many assets and anyone can mint their asset in the NFT space. The ground reality of NFTs is that you can’t earn profit unless you sell your asset more than you bought it. This is a common reason why do people hate NFTs.
10. Most projects in the NFT space fail to Break Even
It is actually very hard to make it as an NFT creator. The NFT creators have to devote extensive resources and efforts to market and publicize their NFTs. It becomes common to see NFTS projects fail and become non-profitable or at most, break even, which generates no money for the creator.
Also Read: 21 Best NFT Art Marketplace
How NFTs work?
Many people are still confused about NFTs and how they work. Making NFTs is a complex process which can be difficult to understand. Given below are some points that will provided that clear all your doubts about the way they work.
- NFTs use the Ethereum blockchain that requires a proof-of-work system confirming a new block.
- To get the right confirmation to the block computer network solve extremely complex problems.
- A lot of energy is used by the network in the hope to receive gas fees generates in confirming the block.
- The system provides incentives to the miner so that they can invest more in the hardware that requires even more power supply.
- The power sources emit greenhouse gases that negatively impact the environment.
Why are NFTs Bad for the Environment
NFTs are digital assets that represent a creative form of work such as games, art, and music items. The NFTs have become popular collectibles but people are concerned about the environmental impact of NFTs. There are many reasons why are NFTs bad for the environment.
Creators can sell their assets in a digital format using NFTs. Every asset in the NFT space is unique. For a very small time period, NFTs became a big business. The NFTs are not environmentally friendly and most of these trade on the Ethereum network.
That means the mining process is used to confirm the transaction and the trade and a lot of energy is used in the mining process and people are also of the view that NFT mining can add to carbon emissions if clean energy sources are not used. This could be one possible reason why are NFTs Bad for the environment.
Ways to Make NFTs sustainable
You already know why do people hate NFTs but how can the situation change? Due to rising environmental concerns, the NFT industry is looking out for the ways to make the NFT transactions sustainable and more environmentally friendly. Some of the ways are listed below:
- Batching techniques: Batch transactions are one thing that people use to reduce energy consumption. The same is done by adding a layer to the purchase process. Buyers make transactions outside the blockchain and then batch-process the transactions which will ultimately reduce energy consumption.
- Usage of green energy resources for mining: For blockchain mining, more renewable resources should be used. Clean energy should be used to reduce the impact of carbon-generated energy. Power mining operations can be carried out using solar or wind energy sources. These resources will remove the mining process from the traditional grid system leading to carbon emissions.
- Moving to proof-of-stake systems: Most NFTs work on the Ethereum network and those represented on Solana and Cardano operate on a proof-of-stake system. The proof-of-stake system uses the number of coins the validator stakes to validate the block transactions which reduces the amount of problem-solving that is carried out in the proof-of-work system.
Why do Artists hate NFTs
One community that has been specially vocal about the NFTs is the artists. The debate of what is art and how it should be distributed has been sparked by NFTs. Given below are some reasons why NFTs are hated by Artists.
1. Historical and Social context
If you want to understand why artists are against NFTs then it’s important to understand the historical and social context. We have seen throughout history that art has been socially accepted everywhere. And now when a new industry like NFT is becoming popular the art community is facing ridicule from the NFT industry thereby undercutting the art industry’s value.
2. Status in Art and NFTs
Both, art and the NFT community are in the need of status. Status helps any community to have a wide range of buyers and sellers. If you’re popular then there are higher chances that you can make money through selling your product.
In the art community, it’s very difficult for new artists to enter into the mainstream market and the same thing happens in the NFT market. This is a common reason why do artists hate NFTs.
3. Monetary income issues
Some NFTs can be sold for millions while some are sold for less than $100, and with such less amount, the livelihood of a person becomes difficult.
The artists spend many hours to produce their art and they also have to earn their livelihood but half of the NFTs sell below $200 and therefore selling art using the blockchain is not profitable as it seems. The NFT space has additional costs such as mining and minting costs.
4. Art Theft
Art theft was a big topic in the past but nowadays blockchain is becoming the hub of art theft. Moreover, art theft has gone This is a common reason why do artists hate NFTs out of control in the NFT space.
Artists find it very difficult to maintain the cybersecurity and credibility of their creations while making profits. According to the artists, it’s pointless to put in effort into the art because it will be stolen.
5. No practical usage of NFTs
NFTs are valuable to people but a large number of people are unable to find NFTs or products that match their budget and lifestyle. It is very impractical for people to use a blockchain network to buy NFT artwork.
Blockchain network was created to open up the market and create equal playing space for everyone to buy and sell different media types but due to complexity, it becomes inaccessible to people who lack status and money. This is a common reason why do artists hate NFTs.
6. NFTs and social culture
We have witnessed the crypto boom, and we have seen people mocking the NFTSs and the blockchain system. The internet is full of jokes related to NFTS space. Artists face too much risk due to NFTSs and the profits are very limited.
Also Read: 50 Most Popular NFT Tokens of 2022
Why are NFTs Bad for Artists
The defenders of NFTs have argued that NFTs provide a new way for young artists to express themselves. Although the case against it is also strong. Many traditional artists believe NFTs are bad for art and artists. Here are some reasons why they believe that.
- NFTs are creating a mess: NFTs have created a mess that is damaging the online art world. If artists want to publish their work on social media, then they must make their work publicly available and if the creation is liked by people on the social media platform, then they can help the artists by sharing their work or ordering it through digital means.
- Due to NFT art is being stolen: Artists around the world are claiming that their artwork is being stolen on the NFT websites and is being used without their consent or prior approval. There’s no surety from the NFTs’ end that the profit will ever accrue to the creator or not and moreover, there’s nothing that prevents the thieves from tokenizing the art of other people and benefitting from it.
- NFTs can be used digitally anywhere: Whenever some NFT is bought the ownership transfers to the person who purchases it. Now the internet is a hybrid network that has good and bad people in equal ratios. There can be instances that the artwork of some artists receives negative comments because the purchaser attached the same to their social media profile and if this happens the creator of the art is forever linked with those awful thoughts and opinions.
- Cost of entry: Ethereum is a popular blockchain network that is used to mint NFTs. But a major disadvantage of Ethereum is that to create NFTs on Ethereum you have to pay a certain amount of money. Artists are not that wealthy and it becomes difficult for them to enter the NFT world because of these costs. This is a common reason why are NFTs bad for artists.
- Community-related problems: NFTs can be seen as the next big thing and there are chances that these will grow even more popular in the coming years. The growth will look like a roller-coaster due to fluctuating market trend of cryptocurrencies.
- Disastrous for the environment: Every transaction done in the NFT space requires some amount of energy. NFTs and almost anything based on the blockchain network have a negative impact on the environment. To maintain a big digital ledger, it’s extremely important to have enormous levels of power supply.
- Speculative pricing: Artists that use NFTs are not paid justly for their hard work. The people that are buying the NFTs may choose to settle on a price that is very low than what the artist could get from an auction of the same artwork.
- Art world is unpredictable: There is a lot of volatility and speculation in the artist’s world. The artists could be making a lot of money in one week and very less the very next week. Since the NFT relates to the crypto market it can be very unpredictable. When the value of the art changes you won’t be able to stabilize the price of your creation.
- No respect for the art: People buy art through NFTs without proper knowledge of the art. The buyers can do whatever they wish to do with the NFTs once they become the owner. They can misuse the art of some artists for fun. And for artists, this is unacceptable as this devaluates the art and defeats the overall concept of art.
We hope that the article was useful for you to understand why do people hate NFTs, what are NFTs, why are NFTs bad for the environment, and why do artists hate NFTs. There are many reasons why people hate NFTs and one of the biggest is that it hurts the environment.