NFTakeover

Sal Iovino, Opinions Co-Editor

Amid a surge of so-called “cryptocurrencies” that have revolutionized the world of online exchange, a new and unique digital item, non-fungible tokens (NFTs), have met with mounting popularity. The NFT phenomenon is the newest iteration of digital investment, and like the -coin mania which preceded it, traders are attempting to make literal overnight fortunes selling and buying them on the internet.  Investors, or in many cases, “investors” can be seen throwing tens of thousands of dollars at these blockchain-backed virtual images, but since these images are non-fungible, they have little actual value beyond their existence as a digital file.  There is no cash value inherently tied to these images, barring the social phenomenon whereby individuals appear suddenly willing to pay thousands of dollars for the privilege of “owning” them.  Critics of the medium have already begun to simply screenshot and reproduce the images on the internet as they wish, much to the dismay of NFT owners – who bemoan the supposed piracy of “their” images.  

NFTs have become the most expensive running joke on the internet, with many “investors” treating the images like some kind of highly prized artifact.  However, with a right-click and selection of the save-as option, anyone on the internet can instantly possess the same image investors just spent hundreds or thousands of dollars on – lacking only the “proof of ownership” certifying its purchase in the blockchain. Buying an NFT, consequently, may unironically be the worst investment in the history of investments.  Though it’s funny to laugh at, the NFT phenomenon does generate some legitimate questions about how our economy is developing.  Are people simply bored with their money?  Has the economy devolved into a virtual playground where those who possess enough capital to “invest” in these digital currencies and objects are just attempting to create hype so they can pad their portfolio with rapidly appreciating assets?  It sure looks like it.  

This hypothesis is reinforced by a recent boom in investment for “Metaverse real estate.”  Now, if you are a living, breathing person making very real rent or mortgage payments on a housing unit, it may seem curious why anyone would throw a decade’s worth of income at an entirely virtual plot of “land”.  Better known as the “Metaverse,” digital sandbox landscapes have provided models of real-world cities with “real estate” that can be purchased by investors for opening digital stores, advertisement, or other purposes.  Once again, this form of investment begs the question – why?  Are we really on course to becoming an entirely digital society to the point where even our cities become lines of computer code?  Or, alternatively, has our real estate market just become so overly-saturated with monopolistic ownership that people are physically running out of real land to invest in?  I’m going with the latter. 

This switch to cryptocurrencies, NFTs, and the metaverse is indicative of a growing problem with our modern U.S. economy. Currency and capital is becoming so concentrated in comparison to the global population that people are beginning to look for escape routes, or to even alter the global currency entirely.  The enthusiastic response to a decentralized currency like Bitcoin signals a move away from the standard currencies that we’ve grown accustomed to as a global society, and towards a market in which monetary shifts are no longer policy decisions made by concentrated entities, but market-wide phenomena controlled by potentially billions of people.  While this may sound like a good thing, as in theory it gives the power of monetary policy to the everyday person, it is once again subject to contamination by the ultra-wealthy.  With the price of a singular Bitcoin at $57,300 at time of writing, the ability to actually enter these digital markets is significantly determined by possessing large amounts of real – not virtual – capital.

Digital currencies may very well be the future of how we trade, spend, and invest; a decentralized currency that is less subject to corruption and manipulation is ideal for smaller investors looking to break into new financial markets. It appears, in short, like a great solution to many of the economic problems we face today. However we also must be diligent to not allow cryptocurrencies to merely iterate the consolidation of wealth already rapidly progressing in the real world.  Prominent investors are already on the frontlines of the cryptocurrency and Metaverse boom, and as they begin to claim more and more of the landscape, they once again exercise their power to the exclusion of other market participants.  Cryptocurrency’s ability to democratize finance and monetary trading hinges on its accessibility to average people, and until cryptocurrencies become available to the masses and those without massive stores of wealth, rosy prescriptions about its revolutionary power should be approached with hesitancy.  

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