Non-fungible tokens, or NFTs, are the crypto hype for 2021 — since DeFi ran out of steam in 2020, and Bitcoin’s pumped bubble seems to be deflating.
The scam is to sell NFTs to artists as a get-rich-quick scheme, to make life-changing money. There’s a gusher of money out there! You just create a token!
And any number of crypto grifters would be delighted to assist you. For a small consideration.
It’s con men with a new variety of magic beans to feed the bubble machine — and artists are their excuse this time.
The NFT grift works like this:
- Tell artists there’s a gusher of free money!
- They need to buy into crypto to get the gusher of free money.
- They become crypto advocates, and make excuses for proof-of-work and so on.
- A few artists really are making life-changing money from this!
- You probably won’t be one of them.
In a nicer, happier world, NFTs would be fun little things you could make and collect and trade, and it’d be great. It’s a pity this is crypto.
What is an NFT?
An NFT is a crypto-token on a blockchain. The token is virtual — the thing you own is a cryptographic key to a particular address on the blockchain — but legally, it’s property that you can buy, own or sell like any other property.
Most crypto-tokens, such as bitcoins, are “fungible” — e.g., you mostly don’t care which particular bitcoins you have, only how much Bitcoin you have.
Non-fungible tokens are a bit different. Each one is unique — and can be used as an identifier for an individual object.
The NFT can contain a web address, or maybe just a number, that points somewhere else. An NFT is just a pointer.
If the place the NFT points to is a site that claims to sell NFTs that represent artworks — then you have what’s being called crypto-art!
Note that it’s only the token that’s non-fungible — the art it points to is on a website, under centralised control, and easily changeable.
When I buy an NFT, what do I get?
The art itself is not in the blockchain — the NFT is just a pointer to a piece of art on a website.
You’re buying the key to a crypto-token. You’re not buying anything else.
An NFT doesn’t convey copyright, usage rights, moral rights, or any other rights, unless there’s an explicit licence saying so.
It’s like a “Certificate of Authenticity” that’s in Comic Sans, and misspelt.
At absolute best, you’re buying a piece of official merchandise — one that’s just a number pointing to a website.
Why is an NFT?
NFTs exist so that the crypto grifters can have a new kind of magic bean to sell for actual money, and pretend they’re not selling magic beans.
The purpose of NFTs is to get you to give your money to crypto grifters. When the grifter has your money, the NFT has done its job, and none of the fabulous claims about NFTs need to work or be true past that point.
NFTs are entirely for the benefit of the crypto grifters. The only purpose the artists serve is as aspiring suckers to pump the concept of crypto — and, of course, to buy cryptocurrency to pay for “minting” NFTs. Sometimes the artist gets some crumbs to keep them pumping the concept of crypto.
CryptoKitties, in late 2017, was the first popular NFT. CryptoKitties was largely fueled by bored holders of ether — the cryptocurrency for Ethereum — spending their ether, that they had too much of to cash out easily, on some silly toys that they traded amongst themselves.
Since then, various marketers have tried to push the idea along. People pay real money for hats in video games, don’t they? Then surely they’ll buy crypto tokens that allegedly represent their favourite commercial IP! These mostly haven’t taken off.
The first real success is NBA Top Shots, where you buy an official NBA-marketed token that gives you a website trading card of a video snippet. This has taken off hugely. NBA Top Shots has its own issues, which I’ll probably deal with in a later post.
DeFi pumpers tried pushing NFTs in October last year, but they couldn’t get the idea to stick.
The recent Bitcoin bubble feels like it’s running out of steam — so they’re pushing the NFT idea again, and pumping it hard. With NBA Top Shots and some heavily promoted big-money alleged sales, crypto art NFTs are hitting the headlines.
How do I make an NFT?
If you aren’t a technically-minded blockchain enthusiast, there are websites where you can “mint” an NFT.
First, you need to buy some ether. This covers the transaction fee to make your NFT. You’ll need Ethereum wallet software, probably Metamask, which is a browser extension.
How much do you need? Well, guess and hope you’re lucky. Ethereum transaction fees peaked at $40 per transaction in February. Lots of poor artists have tried making NFTs and lost over $100 they really couldn’t spare — so guess high!
You might notice that this looks a lot like a vanity gallery scam, or pay-to-play. You’d be correct — the purpose is to suck your precious actual-money into the crypto economy.
Connect your Ethereum wallet to one of the NFT marketplaces. Upload your file and its description.
You have created a token! Now you need to hope a bored crypto holder will buy it.
What is “digital ownership”?
Without a specific contract saying otherwise, an NFT does not grant ownership of the artwork it points to in any meaningful sense. All implications otherwise are lies to get your money.
This is the “registration scam” — like selling your name on a star, or a square foot of land on the moon. Musicians will know the “band name registry” scam, where the scammer sells something that they imply will work like a trademark on your name — but, of course, it doesn’t. (There have been multiple “register your band name on a blockchain” scams.)
Crypto grifters will talk about “digital ownership.” This is meaningless. The more detail you ask for what actual usable rights this “ownership” conveys, the vaguer the claims will get.
The whole idea of Bitcoin was property unconfiscatable by the government, that they could use as money. Instead of a framework of laws and rights, they’d use … a blockchain!
This notion is incoherent and stupid on multiple levels — money is a construct agreed upon in a society, property rights are a construct of law and social expectations — but it’s also what the bitcoiners believe and what they wanted.
NFTs try to justify themselves with variations on this claim as the marketing pitch.
Christie’s auction of an NFT is a fabulous worked example. There’s a 33-page terms and conditions document, and if you wade through the circuitous verbiage, it finally admits that … you’re just buying the crypto-token itself: [Christie’s, PDF, archive]
You acknowledge that ownership of an NFT carries no rights, express or implied, other than property rights for the lot (specifically, digital artwork tokenized by the NFT).
… You acknowledge and represent that there is substantial uncertainty as to the characterization of NFTs and other digital assets under applicable law.
The magic bean in question is bidding at $13 million as I write this, which means Christie’s stands to make about $2 million commission. Pretty good payday for a cryptographic hash. [Christie’s]
I don’t understand any of this. Please explain it like I’m five.
“Would you like to watch your favourite CBeebies show — or would you like me to write on a piece of paper that you own the show? All you get is the piece of paper.”
The trouble with explaining NFTs to a five-year-old is that you’ll have a hard time convincing a five-year-old that this nonsense isn’t the nonsense it obviously is. It sounds unfathomably stupid because it’s unfathomably stupid.
The K Foundation Burn A Million NFTs: Crypto art’s ghastly CO2 production
Proof-of-work is the reprehensible, planet-destroying mechanism that the Ethereum and Bitcoin blockchains use to decide who gets fresh ether or bitcoins.
Proof-of-work is inexcusable nonsense, and every single person making money in anything linked to Ethereum or Bitcoin should feel personal shame. (Crypto grifters don’t possess a shame organ.)
Like Bitcoin, Ethereum uses an whole country’s worth of electricity just to keep running — and generates a country’s worth of CO2. The Ethereum developers claim they’re totally moving off proof-of-work any day now — but they’ve been saying that since 2014.
Crypto grifters making bad excuses for proof-of-work will often object to calculating their favourite magic bean’s per-transaction energy use, at all. The excuse is that adding more transactions doesn’t directly increase Bitcoin or Ethereum’s energy consumption. The actual reason is that the numbers for Bitcoin and Ethereum are bloody awful. [Digiconomist; Digiconomist]
The grifters will routinely pretend it’s somehow impossible to do arithmetic, and divide the energy use by the work achieved with it — in the precise same manner we do for literally every other enterprise or industry that uses energy.
But if you’re calculating energy efficiency — of Bitcoin, Ethereum, Visa, Twitter or banks — then taking the total energy used and dividing it by the total work done is the standard way to work that out.
Sites have sprung up to calculate the share of energy that crypto art spends. The site cryptoart.wtf picks a random piece of crypto art and calculates that transaction’s energy use. “These figures do not include the production or storage of the works, or even web hosting, but is simply for the act of using the PoW Ethereum blockchain to keep track of sales and activity.” The creator also has a blog post to explain the site, and address common bad excuses for proof-of-work. [cryptoart.wtf; Medium]
You may tell yourself “but my personal marginal effect is minimal” — but in that case, don’t pretend you’re not just another aspiring crypto grifter.
There are other blockchains that don’t use proof-of-work. Hardly anybody does NFTs on these chains — almost nobody uses them, and the local cryptocurrency for your fees is a lot more work to get hold of. And even if you did use one of these other blockchains, all the other ways that NFTs are a scam would still hold.
But what about artists? They need money too
Artist pay is terrible. Even quite successful artists whose names you know wonder if they could tap into the rich people status-and-vanity art market, and get life-changing money.
(I’ve already seen one artist bedazzled by the prospect of NFT money say that anyone who objects to crypto art must be a shill for Big Tech.)
Artists don’t know technology any more than anyone else does, so a lot of artists who tentatively essayed an NFT were completely unaware of the ghastly CO2 production involved in anything that touches cryptocurrency. Several were shocked at the backlash over an issue they’d had no idea existed.
Famous artists are getting into NFTs. Grimes did an NFT, and it’d be fair to say that Elon Musk’s partner isn’t going to be doing an NFT for the money. Even if it’s a bit at odds with her album about ecological collapse. But famous musicians have long had a habit of adopting some awful headline-friendly technology that’s utterly unready for prime time consumer use, in order to show that they are hep and up to speed with the astounding future. Then they never speak of it again. Remember Björk’s cryptocurrency album in 2017?
Kings of Leon are doing an NFT of their new album — sort of. Their page on NFT site Opensea suggests that you buy a digital download (not an NFT), limited edition vinyl (not an NFT), or a collectible artwork (a wallpaper). So what you’re actually buying is a vinyl record with a download, and in return, you not only give the band money, but hasten ecological collapse.
Some small artists have done very well indeed from NFTs — and that’s excellent news!
If you’ve made life-changing money from an NFT, then that’s good for the world as well as for you — ‘cos now the money’s out of the hands of the crypto grifters.
(For goodness’ sake, cash out now.)
An important rule of crypto is: every number that can be faked is faked. NFTs are the sort of con where a shill appears to make a ton of money, so you’ll think you can too.
Put a large price tag on your NFT by buying it from yourself — then write a press release talking about your $100,000 sale, and you’re only out the transaction fee. Journalists who can’t be bothered checking things will write this up without verifying that the buyer is a separate person who exists. Just like the high-end art world!
Another thing that the high-end art world shares with crypto is money laundering. Press coverage tends to focus on cultural value, and assume this stuff must be of artistic weight because someone spent a fortune on it. The part that functions as a money-laundering scam is only starting to get comment recently. [National Law Review, 2019; Art & Object, 2020] NFTs will almost certainly be used for money laundering as well, because crypto has always been a favourite for that use case.
Banksying the unbanksied: fraudulent NFTs
There is no mechanism to ensure that an NFT for an artwork is created by the artist. A lot of NFTs are just straight-up fraud.
If NFTs weren’t a scam, there would be legal and technical safeguards to help ensure the NFT was being created by someone who owned the work in question, to fend off scammers. But there aren’t any — the sites all work on the basis “we’ll clean it up later, maybe.” This is because NFTs only exist to further the crypto grift.
There are multiple NFT sites — you could create an unlimited number of NFTs that all claimed to be of a single particular work.
There are a number of Twitter bots that will make an NFT of any tweet you point them at. The point is for the bot owner to make a commission from the sale of the NFTs, before the suckers catch on.
Don’t expect Twitter to do anything about these people — Twitter CEO Jack Dorsey has a $2.5 million offer for an NFT of his first tweet. The offer is from Dorsey’s fellow crypto grifter Justin Sun. Now, you might think these two massive crypto holders were just trying to get headlines for the NFT market. [Rolling Stone]
Someone NFTed all of dinosaur artist Corbin Rainbolt’s tweeted illustrations — and he took down the lot and put up watermarked versions. “I am not pleased that I have to take this sort of scorched earth policy with my artwork, frankly I am livid.” [Twitter]
You could go through and block and report all the Twitter bots, though more will just spring up. [Twitter]
But think of all the good things you could do with NFTs, you luddite
When you point out that cryptocurrencies are terrible and NFTs are a scam, crypto grifters will start talking about all the things that you could potentially do if NFTs worked like they claim they do.
This is a standard crypto grifter move — any clear miserable failure in the present will be answered with talking about the fabulous future! e.g., claiming Bitcoin or blockchain promises will surely come true, because it’s just like the early Internet. Which, of course, it isn’t.
What can artists and buyers do about fraudulent NFTs?
If the NFT site has a copy of your artwork up, you can send a DMCA notice to them, and to their upstream network provider.
If the NFT site is just claiming or implying that you created this NFT when you did not, this is clearly fraudulent (misrepresentation, passing off) — but may be harder to get immediate action on.
If you bought an NFT thinking it was put up by the artist, and it wasn’t, then you’ve been defrauded, and should ask for a refund. If the NFT site won’t refund you, then bring to bear absolutely everything you can on them.
If the site is unresponsive to notices of fraud — which is quite common, because crypto grifters think “digital ownership” is a thing, and don’t care that other rights might exist in law or society — it is absolutely in order to shout from the rooftops that they are frauds, and blacken their name as best you can. Contact their financial backers too. Then talk about that as well.
Ask around to see if you have a lawyer friend, or a friend of a friend, who might be in a position to assist pro bono just because these grifters are that terrible.
The most important thing for artists to do about NFT fraud is to work to make NFTs widely considered to be worthless, fraudulent magic beans, with massive CO2 generation per transaction.
This shouldn’t be terribly difficult, given that NFTs are in fact worthless, fraudulent magic beans, with massive CO2 generation per transaction.
But is it art?
You can tell that crypto art is definitely art, because so many proponents of it are insufferable manifesto bros. Just the manifestos could cause runaway global warming from sheer volume of hot air.