The NFT movement hit the internet and spread like wildfire. When some NFTs sold for hundreds of thousands of dollars, millions of common internet users were attracted to NFT, hoping for a big payout for themselves as well from digital pixelated art.
Because the concept looks so easy: create a pixelated picture of a dog, auction it out, and you’ll earn millions of dollars.
This not only attracted digital artists hoping to sell their work for a big paycheck but also resellers, hoping to buy and resell these images for a big profit, considering the rising prices of NFTs.
However, whatever attracts a lot of money, attracts a lot of scams, frauds, and hoaxes.
To answer the question, NFTs are a scam. But can be (rarely or at least on paper) legit as well.
But if you want to learn its depths, how to gamble with NFTs safely, and to educate yourself on the types of scams that happen in the NFT marketplace every day, feel free to read below.
What Are NFTs?
If you’ve stumbled upon this blog, you most likely already know what an NFT is.
But before moving forward, we should shed some light on what purpose NFTs were thought to serve.
Basically, an NFT (Non-Fungible Token) is a digital asset that has some sort of artistic value. Owning an asset makes the NFT your intellectual property with you being the authority of approving how, where, and when it can be used and by what party.
Pretty intricate definition isn’t it? Well, there’s a reason that is the case.
The Problem NFTs Solve
The purpose NFTs existed was an attempt to provide artists with rights to their art (digital creations). Since images have little to no value for ownership on the internet, (you can just right-click and save an image and share it wherever you want, right?) NFTs solved the problem by giving rights to artists for their digital data and enabling easy resale of their artistic creations.
With NFTs, the artist can own that digital art. And if they want to make money out of their art, they can sell it to someone else actually benefiting financially.
The NFT will be stored in the Ethereum blockchain server, and a link will be provided only to the owner of that NFT to serve as a kind of key to the painting.
A good example of why this was needed is to compare art in the physical form vs. a digital form.
NFT vs. Physical Art
Think of Mona Lisa. It was painted by Da Vinci and because the legend himself isn’t with us now, the right of ownership of that painting was transferred to the Louvre Museum or the Government of France.
The government now owns the painting and chooses to display it in a museum. No matter how much you like the painting, you can’t keep it in your house, because it is owned by the French government. Your only option would be to buy the painting in order to keep it.
However, on the internet, you can simply Google Mona Lisa, save the picture, and use it as your wallpaper. No concept of ownership of art.
And because Da Vinci isn’t here right now, he’s not really pissed about it, but an artist who spends 10 hours on a painting and publishes it on the internet and then sees a Redditor saving that picture from the internet and using it for his Facebook profile picture without giving credits or ‘buying’ it from the artist, I guess has a right to be pissed.
BUT, NOT WITH NFTs.
Till now, the concept may pretty much sound reasonably okay. I mean, YouTubers have the right of ownership to their videos, and singers to their songs, so it’s only fair if artists can own their digital art as well, right?
Well, yes. But, NFTs didn’t really work out that way in the real world.
How NFTs Can Be Considered Legit
NFTs can be or could’ve been at least, considered legit if their practical use followed what was their theory on paper.
Here is how NFTs could’ve been a success or considered legit:
- The NFT artist gets an ownership certification of the art rather than just a link
- The artist has full control over the copyright restrictions for the art
- The NFT marketplace laws prevent easy minting of plagiarized art
And not anything more. The reason NFTs are considered a scam is not only because they fail to take notice of the above pointers, but also because it is less about the art now than about the money involved.
Let’s now look at how NFTs can be considered a big scam.
How NFTs Can Be Considered A Big Scam
There are 3 main reasons I think NFTs are a scam. Let’s look into them.
Do People Really Own Their Digital Art Using NFTs?
The biggest problem with an NFT is that the only thing it provides the owner with is a link.
Looking back at the French government owning Mona Lisa, not only do they have a certification of ownership that can be verified, but that also prevents other parties to paint another Mona Lisa or right-click and distribute the painting that is hung in the Louvre.
With NFTs, all the person gets is the link to a single piece of art. Not its copies. Anyone can easily copy your digital art and use it for whatever purpose without giving you rights, and there is nothing you can do about it. Because the copy that the other person makes isn’t owned by you.
You Only Own Your Copy. That Is Stored In A URL. Doing Nothing.
So to answer the heading: No. People don’t own their digital art using NFTs.
NFTs Lost Their Purpose – Nothing More Than A Failed Investment Scheme
The other problem with NFTs occurred when the sin of Greed spread out. NFTs are nothing but an investment scheme.
Let me give you an example to better explain this. Cryptocurrencies were created to take back control of currencies from governments and to let a decentralized currency appreciate and depreciate only by the demand from the people.
The idea seemed good, but when the currency started attaining a value of hundreds and thousands of dollars, people started using it as nothing but an investment scheme.
The same happened with NFTs. When news hit that NFTs were selling for millions of dollars, the value of art lost its purpose in NFTs but random NFTs with no intrinsic value were seen to be priced extremely high. This is because people wanted to grab a profit from reselling it.
The ownership aspect of an NFT has no value now. All people care about is the resale profit.
And soon enough, when people realize that an NFT has no intrinsic value, the demand for NFTs will decline and all these extravagant auctions and resale prices will cease to exist.
Fake And Plagiarized NFTs
The worst thing to happen to NFTs amidst all this chaos was when people started minting their own NFTs without being digital or physical artists themselves.
Not because I don’t appreciate non-artist trying their luck at art, but because almost all their creations were plagiarized content.
OpenSea NFT Marketplace
The biggest example to prove this happened at OpenSea, the biggest NFT Marketplace.
OpenSea wanted to encourage new NFTs so eased up the NFT minting process, enabling almost anyone to create their own NFT and sell it on the marketplace.
However, after some time, OpenSea had to impose restrictions because they released a public statement saying almost 80% of the NFTs minted were plagiarized, fake, and fraudulent.
What does that mean? It means people saw the NFTs that were already being priced extremely high. So instead of trying their luck out on an original creation, they copied the already famous painting and tried to sell it.
For instance, if I paint the Mona Lisa (somehow) and add an eyebrow to her (barely noticeable) and try to sell it to someone claiming it’s the original Mona Lisa.
Would be pretty disgraceful, innit?
Plagiarized Physical Art
This concept ignited another scheme in people’s minds. How about we recreate physical art in digital form and sell it as our own?
Since there was no law restricting that from happening, people did start doing that.
Pewdiepie, the biggest Youtuber on the planet, had his face being sold on the NFT marketplace (for more than $4 million!!!) without him benefitting or even knowing about its existence…
Conclusion – Are NFTs A Scam?
I guess my opinion on NFTs has been clear throughout this whole post. I tried to be as unbiased as I could but there is almost no defense to portraying NFTs as legit.
My advice would be to stay away from NFTs. And I know that people considered cryptocurrencies a scam at first as well but reaped many profits from it, but NFTs aren’t cryptocurrencies for many reasons.
The reason crypto didn’t fail after the criticism it faced was that it never lost its true purpose. It is still a widely used currency. Sure, it may be getting devalued but that’s just because the free market has all control over it.
Plus, most of the early criticism for crypto came from people who didn’t understand the concept enough.
NFTs, on the other hand, get more and more infamous with every passing day. More and more organizations feel reluctant to be associated with NFTs, and most of the internet influencers are seen to be only trolling the concept.
Plus, there is no original value to NFT. Maybe, there never was. All it was was just a fight of ownership for some 1s and 0s that have no intrinsic value, no rights, and can be replicated without any effort.
So yes, NFTs, in my opinion, are a big scam.