Non-fungible tokens (NFTs) are digital items with unique codes stored in the blockchain. They’re intangible assets that can have fluctuating value.
Once you own an NFT, no other person can own the same code. This idea sparks hate outside of the crypto world, but why do people hate NFTs?
Why Do People Hate NFTs?
1. NFTs Hurt The Environment
To operate huge blockchain networks, you’ll need electricity—a lot of it! Reports show that the largest blockchain today consumes more energy than some entire countries!
Seeing how the world is racing to curb climate change, using non-renewable energy sources to mine NFTs becomes a problem.
Crypto farms are also driving out other data processing services that use the same amount of computing power.
What’s different is that data services are crucial for scientific developments, while crypto and NFTs don’t offer any added value.
On top of this, mining also produces hardware wastes. These pieces of hardware lose their value as soon as they’ve done the job.
2. NFTs Are Unregulated
Cryptos are unregulated, and this includes NFTs. When currencies are unregulated, it means there’s no safety net for your money once it leaves your hands.
For example, banks can revert fraudulent transactions because of existing laws and regulations. With crypto, on the other hand, if you get scammed, there’s no use trying to get it back.
Traders don’t get the same protection they do in banks or other regulated platforms.
This feature also attracts money laundering. Since anonymity in the NFT space protects users, it’s easier to transact without being detected.
3. There’s A Lot Of Scamming
New and unsuspecting NFT enthusiasts are the most vulnerable to NFT scams.
Rug pull is the most common scam you can find in NFT projects. This is when an NFT creator takes your money and suddenly disappears.
You can also get scammed through wash trading, or when a group of people inflates the bid to increase the item’s value.
In reality, these people are wash traders who use self-controlled wallets. They buy and sell their creations to appear valuable.
There are also a good amount of phishing scams on NFT marketplaces. Hackers use this method to swipe your account and take your assets.
Since blockchains are decentralized, scammers use anonymity as their shield. Once you get scammed, it’s virtually impossible to get your assets back.
4. NFT Values Are Volatile
If you’re familiar with candle sticks in stock markets, you’ll know that rates regularly fluctuate.
In cryptos, there’s no way of knowing how much assets cost at the end of the day. You can be earning profits one minute, and losing thousands in the next.
Supply and demand rule NFT’s value. If people see there’s a huge demand for the token, its rate goes up.
This is where whales, or users who own a huge chunk of the shares, come in. They can control the market price by buying or selling their shares.
5. NFTs Are A Bubble
Many people believe that the NFT world is a bubble that can burst at any time.
Investors from all backgrounds pooled to support the rise of NFTs. On a given day, millions of transactions happen in the NFT space.
As a result, NFTs are one of the fastest-growing markets today. NFTs gained popularity fast, but they can also collapse just as fast.
Many investors use NFTs to profit from overinflated prices. Other than that, NFTs lack utility. At the end of the day, this bubble will pop and leave creators and investors with monetary loss.
6. Users Steal Intellectual Property
People think NFTs are good for digital artists. They can tokenize their art and sell them on the platform.
However, this practice presents a lot of holes in it. Not only can images be easily duplicated, but they can also be stolen from the artist.
Selling artists’ work without crediting them is stealing intellectual property. There’s no stopping anonymous users from minting artists’ works, though.
NFT bots are another way of stealing artists’ works. They’re programmed to steal artworks on different platforms without notifying the creator.
Owning an NFT also doesn’t guarantee that you have full commercial rights to that item. Yet, many people believe that intellectual property rights also get transferred to them.
7. NFTs Have Expensive Minting Cost
Minting is crucial to verify NFTs in the blockchain. This process costs a lot because of gas fees or the cost of computational power for every transaction.
Costs can also depend on how fast the transactions are. A slower transaction may cost less in general, but the fluctuating price of gas fees can have an impact on the price.
If you mint from a secondary marketplace, your gas fee may even be more expensive. As a result, you may lose money from paying fees instead of making a profit from sales.
8. Unfair Advantage In The Gaming Industry
In the gaming world, developers are thinking of incorporating NFTs into their systems. It’s a way to increase revenue without doing much.
Gamers are against this idea because these NFTs are useless in games. They can’t modify any of the skins or weapons outside of the developer’s system.
Many gamers also think this can be an unfair advantage to those who are willing to spend money on NFT skins.
9. NFTs Are Overhyped
Remember those NFT apes that circulated the internet once? Celebrities and personalities joined that bandwagon.
NFTs even attracted large investments as a result of being overhyped. Because the NFT space caters to an infinite amount of assets, anyone can mint their own asset.
In reality, you can’t make a profit on NFTs unless you sell your asset for more than you bought it for. If the market crashes, you’re only left with bragging rights.
Despite this, many people are willing to pay extraordinary amounts of money to buy pointless digital assets.
In the eyes of those who hate them, NFTs are a capitalist tool that’s designed to make the rich richer. In retrospect, NFTs offer no benefits to anyone who owns them.
So, why do people hate NFTs? Not only do they negatively impact the planet, but they also create a monetized system vulnerable to taking advantage of people.