In brief
- NFT craze cooling off is good for NFTs.
- The end of speculation is a good thing, says the co-founder of Nifty Gateway.
If the NFT craze has left you feeling exhausted and overwhelmed, spare some thoughts for the people behind the platforms—NFT marketplaces—who appealed for some sanity at 2021’s Ethereal Summit on Friday.
Duncan Cock Foster, co-founder of Nifty Gateway, told Decrypt that he’s tired of all the profit-seeking.
“If you're just doing it with the sole purpose of making money, then you're probably not gonna have a good time, and you're probably not going to make much money either, which is kind of the ultimate irony,” he said.
The NFT boom in February and March was “destabilizing,” said Cock Foster. Interest has since started to wane. And so has Cock Foster’s patience.
He’s tired of artists or musicians who email to say, “Hey, guys, you know, we need to get on the phone right now. I need to launch my NFT within the next week before the hype dies down!”
That’s an immediate red flag for him. “If that's your attitude, you're probably not going to have long term success in the NFT space,” he said.
But Cock Foster thinks this wheat-chaffing is ultimately a good thing: he takes it to mean that the market’s set for more sustainable growth.
Haters gonna hate
Even though artists and marketplace operators have spent the past few years developing the industry into something worthwhile, people still write NFTs off as a fad.
Nathan Beer, head of content at SuperRare, said on the panel that a lot of the criticisms conflate NFT technology and NFT art.
“NFT technology has allowed [digital] artists to achieve sovereignty, value, ownership, and scarcity. And I think that is what makes this so important,” he said. People should let NFTs stand the test of time, “just like the Internet.”
Today’s NFT naysayers were also around in 2018 when CryptoKitties were the new hot thing, said Duncan Cock Foster. People told them that NFTs will never take off.
“It’s kind of like Peter Schiff,” he said, referring to the arch-critic of Bitcoin. “He just keeps making [the same criticism] every year, and he just keeps getting more and more wrong every year.” Time will also prove NFT haters wrong, thinks Cock Foster.
NFTs: bad for the environment?
But how about critics who lambast NFTs for the damage they do to the environment? Ethereum’s proof-of-work blockchain sucks up huge amounts of energy to validate transactions—including for NFTs.
Such concerns are wide of the mark, said Beer. The Ethereum network always runs at full capacity, regardless of NFTs. “So no matter if there's zero transaction or a million transactions, it's going to have the same impact,” he said.
Griffin Cock Foster, Duncan's brother and co-founder, said that Ethereum’s transition to proof-of-stake will cut out its energy consumption. That’s where he wants attention to be paid, “not on individual artists who mint NFTs.”
Cock Foster argued that it’s not unethical for NFTs to use energy. For blockchain believers, “electricity use is worth it,” he said.
What’s next for NFTs?
Beer said that people are clamoring for decentralized autonomous organizations (DAOs), which allow for members to buy tiny shares of NFTs instead of the whole token.
Others are desperate to show off their NFTs, and are after digital displays that support the rich multimedia assets.
If the operators manage to convince artists to keep making NFTs and customers to keep buying them, the panellists could keep on riding the NFT wave.