Should NFTs exist?

Have you ever been to an art museum and felt moved? Standing in front of a canvas and admiring the brush strokes, color choices, and subject matter that an artist toiled over can be a humbling experience. It’s partly why patrons flock to museums each weekend. They want to be in the room with the art and, by extension, the artist. In turn, the art gains value, purchased at auctions, loaned to museums, and generally appreciated by more and more people.
                                     

WTF are NFTs?
NFTs are a different breed. NFTs (i.e., nonfungible tokens) are digital tokens that ascribe ownership over a thing, usually a piece of digital artwork. While the artwork can be replicated, tweeted, and shared, offering the same experience to any viewer (generally from behind a screen), its ownership is the distinguishing feature. Whoever owns it has clout and an item that can be traded, utilized in gaming, or to buy real estate in Web3.

But after an initial spike in interest and therefore prices, current prices are tanking. Sina Estavi’s purchase of Jack Dorsey’s first tweet for $2.9MM recently didn’t receive any offers over $14K. Google searches for NFTs, a great marker for interest and therefore prices, are down 80%.

Are NFTs a Ponzi scheme?
For some, the NFT model is a textbook example of a Ponzi scheme. A particularly contentious Twitter thread points out the SEC’s definition of a Ponzi scheme, comparing it to the crypto art market. NFTs may also be contributing to art theft, where criminals take an image and tokenize it as their own. How do you own someone else's tweet, anyway?

Still, the market is poised to recalibrate as art creation slows down and buyers eventually have less to choose from (currently, there are 5 NFTs for every buyer). Or, more people may jump on the bandwagon as prices decline and investors anticipate that prices will bounce back. Instagram just announced it will be supporting NFTs on its platform, signaling mainstream adoption is on its way.

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What’s certain is how NFTs are genuinely bad for the planet. All this digital creation and trading create huge volumes of carbon emissions. This excellent article from 2021 examines the environmental impact of NFTS, where hype roughly equals emissions.

For more on this topic, here's an article on NFTs for physical goods. Check out recent fundings using the keyword "NFT."