The NFT You Like and the Facts U Dislike (FUD)

From stamps, paintings, cars, to novelty cards, people are obsessed with collecting. For some a collection is more of a personal hobby. For example, collecting trinkets and other oddities that suit a certain interest and putting them somewhere as reminders for something significant. On the other hand, some collections are treated as assets. For instance, items that are being kept safely because of how much they are worth. Either way, objects that are being “collected” have value. Nowadays, almost everything is becoming digital. Images, songs, videos, and other pieces of art can now be found on the Internet. Surely, some people have saved links or files of their favorite “artworks” that serve as their digital collection. But, the problem with saving, or in this case “owning”, a digitized art is its “value”. Since the Internet is an open source of information wherein every user can upload or download a masterpiece, the uniqueness and value of a certain “collectible” becomes questionable. That is the modern dilemma that NFTs are answering.

Definition
NFT or Non-Fungible Token is a kind of digital collectible that represents real-world objects (arts and multimedia) that can potentially grow in value. In short, NFTs are digital assets that allow the owner the original rights to the purchased piece of artwork or multimedia. NFTs use built-in authentication technology as proof of ownership to the item. According to Forbes, NFT’s market value skyrocketed to $41 billion as of 2021. This means that there is a demand for this kind of asset. One can argue that creativity in the digital space is unlimited because the only limit to creativity is the artist’s imagination. Even though there are millions of artists around the world, the fact that NFTs are aiming to create digital scarcity by giving authentic ownership to certain people that would buy the rights of the item would solve this issue. However, the concept of legitimately owning a digital asset on the Internet in exchange for real currency is fairly new and scary for the general public. A lot of negative campaigning and opinions circulate the mainstream media. And as an effect, general acceptance of this new system of collecting is surrounded by clouded judgment and misinformation.

FUD
FUD stands for Fear, Uncertainty, and Doubt. It may seem self-explanatory as it implies but in the world of Cryptocurrency and NFTs, fudding (term used to utilize FUDs) is a marketing strategy. These tactics appeal to the human emotion to affect the market. The objective of fudding can be to lower the prices in the market or take down competitors. FUDs can come from different sources such as competing NFT companies or the government’s action for or against it. Whatever the case maybe, these are some considerations as to why the society is still quite reluctant to generally recognize NFTs legitimately.

Factors that contribute to Fudding
By virtue of its nature, fudding is like bad propaganda against a certain artist or company producing NFTs. Information that comes from fudding is not often based on charts and data but news that spreads across all media platforms. However, some negative publicity that NFTs receive came from actual unfortunate events that contribute to FUD. Here are some examples of FUDs that are not from intentional disinformation:

1. Scams and Vulnerabilities
The world of Cryptocurrencies and NFTs experienced “rug pulling” in the past. Rug pulls are acts of creators or companies that abruptly exits as soon as they have received large amounts of money and support from its investors after showing some appealing properties and promising market performance.

2. Government Regulations
Since Crypto and NFTs are fairly new concepts. Some countries are not ready to adapt to these digital systems. They still favor the conventional and traditional “fungible” markets. For example, banning Crypto-mining (Crypto being one of the major payment methods in NFTs) in China, Egypt, and other countries in December 2021.

3. Falling Prices
Even though it is normal to see how wildly volatile the crypto-market is, some fudding could arise from its unpredictable and inconsistent value. This contributes to more reluctancy from investors that are new in this kind of market.

4. Social Influence
There is nothing more powerful than influence; especially if it comes from a very notable, respected, or popular person. Big names all over the world also express some distrust in the industry of NFT and this could generate a general opinion around their followers that could be passed on to more people. In one report of CNN Philippines last February 14, 2022, written by Julienne Joven, states the frustration of one of the famous digital artists in the Philippines, Jaime Cruz. Cruz said, “There have been a lot of scams recently, and even some people hacking artists’ accounts with big following just to promote NFTs and crypto, “How am I supposed to trust and feel safe around those types of things, especially as an artist already doing their best to keep afloat?”

Conclusion
As Taylor Swift says in one of her songs, “people throw rocks at things that shine”. It is undeniable that NFT is getting even more popular nowadays compared to its conception in 2014. It is even echoing not only in social media but also in mainstream media as well. Many artists are joining the fray and it is inevitable to adapt to this kind of new collecting someday. As for now, since NFT is still in its infancy, public scrutiny would surely be around for quite some time. But as we progress to the digital age, people will surely see the significance of NFT and why it has been conceived in the first place.