I don't hate NFTs. I just have a lot of questions.
The narrative: Bitcoin is the epitome of digital scarcity. Bitcoin makes transferring value unstoppable and uncensorable. NFTs further this concept and make digital content like images, videos, and music scarce and programmable.
I love this narrative. It is cool to have artwork programmatically payout royalties to the artist. It is cool to have music programmatically payout royalties to the musician when listened to or used in another song. It is cool to have a user-owned racetrack in a video game that charges tolls every time racers go around the track.
But the map is not the territory.
- What if people copy your content and upload it onto the same blockchain?
- What if people copy your content and upload it onto a different blockchain?
- Are NFT contracts legally enforceable?
- What if my artwork gets deleted?
- What if platforms like Opensea and Rarible compete and only payout creators if the artwork gets sold on their platforms?
- What if the content the signature points to changes?
- Who pays to store the content?
- What if I buy a digital asset to use in a video game that is no longer being developed?
- Do you really own that NBA topshot clip-can you legally license it without the NBAs permission?
Bitcoin is equally complex as it is simple. Your coins, the digital asset, are always on chain and don't rely on a third party to store content. The Bitcoin community has opted for a model that prioritizes security and enables anyone to run their own nodes for under $50.
NFTs add an extreme amount of complexity and risk, and the above questions don't even go into any of Ethereum's risks.
NFTs are cool. People should experiment. But it's going to end like the ICO bubble so don't put any money in you're not 100% okay with losing. It's a cash grab and the bubble will pop. Content will be priced down 90%+ and most will think their dreams of creator equality are over. And from the ashes, some use cases will emerge. Time will tell.
My current thesis is that outside of Bitcoin, programmable digital assets and blockchains will enable and empower third parties that will treat their customers better under the constant threat that their userbase can fork to another company or protocol.
Let me know what you think. Let's discuss on Twitter.