Based on a thread from a couple of days ago, I wanted to write out my thoughts on NFTs as they related to 3 topics (Access, Ownership, Environment). I think NFTs are not inherently good or bad and suffer from many of the same issues that other forms of rare items suffer from.
Who has the ability to participate?
Strengths
NFTs benefit from day one global accessibility. There are little to no geographic borders.
Digital native. This asset is intangible and anyone with access to a smartphone can participate.
Limited gatekeeping. Almost anyone can just join a Discord server and participate in the community.
No creator can’t create. I have not seen a creator being blocked from creating.
Weaknesses
Limited analog access. One could argue that being digital makes it less accessible. I think tech moves in a direction where almost everyone can come online in some capacity.
English centric. Have not seen much focus on language access besides English. This could be my own limited worldview.
Accessibility. Have not seen much work done for the disabled. How can we expose creativity to those that may not have previously been able to engage in analog creativity?
Easy exposure to phishing schemes. I don’t think we have mastered security for the layperson and this can become a big issue as the value and the value stored gets larger.
Who owns what? How does one own something that is intangible?
Strengths
Ownership is not limited to just the wealthy. It seems like if you are making your bets right then you can amass wealth/ownership with minimal upstart capital.
Creators can own their own art and get recurring royalties. This helps perpetuate the splitting of revenue.
Don’t lose massive percentages to middle players like galleries. This obviously won’t hold true forever, but currently, I think they can be somewhat disintermediated.
**There is an opportunity for more owners. **Everyone can own small fractional pieces and this expands the opportunity to solve the weaknesses. More minds solving more problems.
Creators can participate in secondary sales. The asset becomes an annuity.
Weaknesses
The crypto literate owns more. It seems like those that are diving deeper are aggregating more. I am not certain this is more than any other industry, but I think it is more in our face since it is digital.
Poor owner experience. I have not really seen compelling management of the assets you own. I am not going to my wallet every day.
Strengths
Lack of physical manufacturing. I feel like we are not thinking of the positive externalities of not manufacturing physical products. There is massive energy consumption to get things delivered right to you.
No transportation costs. This relates to the above, transportation does not exist and neither do the negative externalities that come with that.
I think everyone in NFTs knows that the environmental impact is large. There are multiple protocols looking to solve this i.e. Solana, Cardano, and Algorand.
Weaknesses
Energy wasted. We are still minting and we are not waiting and this energy is a sunk cost.
No tax for consumption. I feel like we should be taxing energy consumption across the board not just for NFTs