NFTs became extremely popular this past year, and during that time they also fell from grace by a fair amount too. But what’s with all the recent negativity towards NFTs? Some see them as a worthwhile investment, while others think you’d be better off saving your money for something important like bunion surgery or your kid’s college tuition.
Here are some of the main reasons people have been pushing against NFTs.
Built on a Shaky Foundation
The foundation of the NFT market is about as solid as a sandcastle in an earthquake. It’s a market that grew quickly and has already begun to deflate due to dwindling interest, controversies, and a lack of reliability. At one point NFTs were selling like hotcakes and the hype lead to inflated prices and arbitrary values, but since then they have become a fraction of what they were previously priced at. Many companies that were attempting to cash in and capitalize on the fad began making their own NFTs, such as certain video game companies, fast food chains, and more, being met with mostly negative receptions.
However, the main reason for NFTs’ shaky foundation is the fact that you are paying thousands of dollars for a virtual good that doesn’t exist, cannot be used, and is worth only what certain people say it is.
The Market is Unregulated
One of the main deterrents from NFTs is the fact that the market is largely an unregulated one. This essentially opens the gates for scams and frauds to lure in prospective investors and take advantage of them. People create false NFTs, do bait and switches, pull the rug out from under buyers, and steal original art to sell. With no sort of regulations to abide by and no admins to monitor transactions, the market is essentially a free-for-all.
This is the same market that regulates cryptocurrencies, so users need to take great caution when using them. One wrong move and you likely won’t be able to get your money back.
They’re Bad for the Environment
Without having any background knowledge, it might seem crazy to think that virtual goods are bad for the environment, but that’s the case with NFTs. The carbon emissions produced through cryptocurrencies and NFTs are largely due to the energy expenditure used by miners through Ethereum, which uses a ton of energy and sends out carbon emissions in its wake. While the exact amount is yet to be determined, any additional carbon footprints on our environment are unwelcome.
An Everchanging Economy
Regardless of whether you’re with or against NFTs, it’s important to invest your money wisely no matter what state the economy is in.