This is the third post in a series of posts I've written on the challenges of Web 3 and Blockchain while exploring Molly Whites lecture. I'd highly recommend you read my first two pieces if you haven't already to get more context.
But today, we will finally talk about NFTs. Yes. I know. Here we are. Buckle up.
Wtaf is a NFT?
If you do a Google search of what a NFT is, you'll get the definition it's a "Non Fungible Token". This means nothing to the average user and is actually quite unhelpful. It's a typical gatekeeping activity of using words that don't make sense to the average person to scare them away and creating an "exclusive" club (this is also very common in finance and tech).
All it means is that it is a token that literally can not be replaced by something else. If you have £10, you can replace that with two £5 notes - everyone will still accept that as £10. You can buy a PlayStation 5 for £450, if that breaks, you can buy another PlayStation 5. It can be replaced and is the same thing. But there are certain things that really can’t be replaced. Like the Mona Lisa. You can paint literally identical versions of the painting, but it won’t be the Mona Lisa that Leonardo Da Vinci painted. You can get a replica of David Beckham’s shirt he wore in his last game for England, but there’s only one shirt that he actually wore. Sentimental but mundane possessions that your loved ones may have that you will want to hold on to when they pass away. These things are not replaceable, or, they are non-fungible.
So the idea of a NFT is that it’s a certificate, or ‘token’, that in theory is unique and therefore can’t be recreated, or replaced. What is it a certificate of? Well whatever, but most commonly at the moment, artwork.
What do NFTs have to do with the Blockchain?
When an NFT is made, it needs to be ‘minted’, and all that means is that the existence of the NFT is added to the central database of NFTs, which is the blockchain. The most popular blockchain that NFTs are minted on is the Ethereum network (the Ethereum version of the blockchain). So, say I had a piece of art I wanted to sell, like some Apes that look the same and have LittleBigPlanet like accessories in them (?), I'll have to mint them on the Ethereum network (side note: this process requires you to pay a transaction fee to process the blockchain transaction and is generally a couple of dollars. This fee can fluctuate massively and is determined by how many people are trying to push through a transaction. This is something I will write about another day). Now we are back on the blockchain.
Decentralisation can cause huge problems
Once the NFT is on the blockchain, we know that it can’t be undone - it will always be on the blockchain, and everyone will be able to see it. Let’s move onto the next aspect of the Blockchain. Decentralisation.
At a glance the concept of decentralisation sounds great. There is no central repository of the information stored on the database. Anyone and everyone can download and make a copy of the accepted blockchain. If the government tries to censor something? Tough. How many copies of the blockchain will they take down?
By everyone having their own copy, it also feeds into the idea of the blockchain being transparent and open to anyone to inspect the information. In the spirit of Web 3, the decentralisation aspect gives the power back to the people. No central organisation gatekeeping the information. In theory you could also run all the machine learning/AI models on a set of data that the big social networks hold on to, to make your own models that you can then monetise and what not.
I wrote in my previous post about the disadvantages of the blockchain being immutable and public. There are always situations when you need to modify or delete things and when these functions are not possible, you create a wealth of potential abuse mechanisms. Now imagine all of those problems, but anyone can download the blockchain and there are multiple instances of the blockchain everywhere?
Thank you for taking the time to read this and I hope you walk away with a new perspective of how we use everyday technology. If you enjoyed this post, please do share with your network.
That situation when you’ve been accidentally doxxed on a social media website built on the blockchain? Even if there is a mechanism to hide it, it will always be on the blockchain and you have no idea how many people have a copy of it, unrestricted. Someone worked out your wallet and how you spend your crypto? Good luck hiding your transactions, as anyone can in theory download the latest blockchain and can keep their own record of your transactions.
But let’s look at another example. NFTs.
At the moment, anyone can mint anything into a NFT. There are no restrictions. Some bad actors have been taking work from other artists, minting them as NFTs, then putting them on sale. Imagine being an artist, spending hours on a piece of artwork, only to find some rando has taken it, ‘minted’ it and made money off it.
In the old fashioned ‘Web 2’ you could go to the centralised gatekeeper and put in a request for it to be taken down. If someone was selling your art on Facebook, you can appeal to Facebook and get it taken down. That person might even be reprimanded. There are automated tools that issue takedowns when any copyrighted content is detected, and as everything is centralised, the artists can get their art being sold illegitimately taken down. Now don’t get me wrong, Web 2’s version of copyright takedown culture isn’t perfect and frequently targets the wrong people, but there’s something, and once it’s taken down it generally means it’s gone from that platform.
With NFTs, the best you can do is go to the marketplace where the NFT is sold and tell them to not let anyone sell your art. The marketplace will take it down, hide it or maybe even block sales of it, but once it’s minted, it’s always going to be on the blockchain. As it is decentralised, it will be on multiple blockchains and many people will have it on their blockchain. Asking everyone in the world with the blockchain to remove it from their chain (ignoring the fact blockchains are designed to be immutable) is not an easy feat. You as an artist are best off accepting you are never going to get the money for your art, and you have lost control over your art.
There are artists out there making millions legitimately selling their artwork (or selfies of themselves?) which is great, but there needs to be deeper thought on how to ensure that the technology is primarily used legitimately.
But say after all this, you love the idea of new technology and a new way to appreciate art. So you set up a crypto wallet and start buying some NFTs. What else can go wrong?
The Blockchain is Anonymous…in theory
The blockchain is designed so that as long as you are careful, you can remain anonymous while trading. However, staying completely anonymous is not an easy task for the average user and using external sources you can work out who owns a wallet.
If you have a website and you accept Bitcoin donations, then people can work out who you are. If you trade crypto or buy NFTs through an exchange, your wallet will be easy to work out, taking away anonymity. In the scenario that the whole world’s finance ran on the blockchain, it would be even easier to work out who owns a wallet if you know the habits of the individual. If you knew where my local corner shop was and the rough time that I went to visit the shop, you’ll be able to work out my wallet.
But say you don’t use blockchain for finance, you just want some NFTs, it’s fine if people know about your wallet right? After all, you normally want to show off your NFTs.
In general, yes you are fine. But this can also be abused. The problem is that once you know someone’s wallet, you can send them whatever you want and there is nothing the recipient can do. This can easily be used to target people.
A person who goes online by the name of Dame.eth is non-binary. When Dame.eth criticised a head of operations of a crypto project, they received transphobic abuse in their wallet. Someone had sent a message to Dame.eth crypto wallet with a hate message, and there was nothing Dame.eth could do about it. What makes this worse is that the individual who sent the hate message would have had to pay money for the transaction fees to send this message.
If someone had the funds and really wanted to give you a terrible time, they could do some light research to work out your crypto wallet and then flood your crypto wallet with hate messages and abusive pictures. To get rid of them, you would have to pay transaction fees to transfer the images to a dead wallet, meaning that if you don’t have the money to do that, your crypto wallet will have these images and messages stuck there between your actual purchases.
I understand that Web 3 is new and that the community is still working out how, if at all, the new culture of living on the internet is going to manifest in the future. But we’ve seen how terrible Web 2 can be and the ideology of “let’s get things working and we’ll deal with things after they go wrong” with social media today. We have the chance to actually think about things and build with safety and privacy in mind to avoid obvious gaps and ways to abuse the system.
I’ll be back on the problems with Web 3, moving on to environmental and user experience issues.
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If you have a better idea than I do, if I’ve missed out anything or you think I am talking absolute rubbish, feel free to reach out either by commenting on the post, or by emailing me on tanvirtalks@substack.com