August 8, 2022

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IF you thought the backlash against the metaverse was savage, you haven’t seen the pitchfork...

IF you thought the backlash against the metaverse was savage, you haven’t seen the pitchfork mobs fomenting unrest online over the sudden ascent of NFTs.
ow if that sentence means nothing to you, let’s back up a bit first.
Mark Zuckerberg has been trying to convince us since late last year that virtual worlds known collectively as the metaverse are where we’ll all socialise in the future. Few outside of Facebook believe his vision is anything but a grubby money-making exercise.
Yet it pales beside the Wild West gold rush that Non-Fungible Tokens (or NFTs) have come to represent in the digital realm. NFTs emerged because digital items such as images or bits of software can be copied ad infinitum. Unlike a real-world object such as a painting or a diamond, digital items have no scarcity and thus no value.
But the tech dudes who now seem to run our lives figured that attaching an NFT to a digital object effectively made it unique and hence something people would pay for. Using the same blockchain technology that underpins cryptocurrency such as Bitcoin, the NFTs and their attached item (image/video/song/whatever) could now be bought and sold.
In theory, NFTs have their legitimate uses, such as allowing digital artists to get paid for their work and proving ownership of items composed only of bits and bytes.
But, as always in nascent technological leaps, NFTs have left the door open to hucksters and snake-oil salesmen, with video games a prominent frontier.
It’s not a new idea in the gaming sphere, with NFT-based Cryptokitties making its debut in 2017, enabling players to buy and sell cat characters via cryptocurrency Ethereum. But the bandwagon really gathered pace in mid-2021 with the sudden lockdown popularity of the Pokémon-like game Axie Infinity, where NFT-based creatures have fetched as much as €100,000 in rare cases.
Just a few months later and many big corporations have come sniffing for gold. Ubisoft, known for blockbuster series such as Assassin’s Creed and Far Cry, dipped a toe in the murky waters with December’s launch of a range called Quartz. It consists of items for its Ghost Recon Breakpoint game such as one-off helmets or guns, each with a unique serial number.
The blowback from gamers was immediate and concerted, with the announcement trailer getting 40,000 dislikes.
“I think gamers don’t get what a digital secondary market can bring to them,” Ubisoft’s Nicolas Pouard said last week. “Gamers really believe it’s first destroying the planet, and second just a tool for speculation.”
Here, Pouard puts his finger on two of the critical weaknesses of NFTs. All blockchain technology requires huge computing power, and thus electricity, to keep track of the ledger, creating an environmental nightmare. Because NFTs are eminently resellable, we’ve seen rollercoaster valuations just as happened in Bitcoin-land as speculators piled in and out.
Unfortunately, you’re going to hear a lot more about NFTs in the coming months. Twitter has just added NFT avatars. US talk show host Jimmy Kimmel hyped his NFT artwork purchase on late-night TV. Atari is launching the gruesomely named GFT — an NFT of a game-themed item that you buy as a gift for someone without knowing what it is.
Don’t say you haven’t been warned.

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