An analyst’s new warning on non-fungible tokens or NFTs highlights an additional area of risk involved in buying these digital rights to a piece of artwork or other asset.
Samuel Wan at NewsBTC reports that London-based techie Jonty Wareing is looking at the process through which people like the artist known as “Beeple” sell their artwork NFTs, and finding that the base asset behind them consists of a URL or hash that is reliant on the seller keeping a particular piece of Internet real estate alive. For reference, Beeple recently sold an NFT for $69 million.
“The NFT token you bought either points to a URL on the internet, or an IPFS hash,” Wareing recently tweeted, saying that after a deep dive into NFTs, his “eyebrows are now orbiting the moon.” “In most circumstances it references an IPFS gateway on the internet run by the startup you bought the NFT from. Oh, and that URL is not the media. That URL is a JSON metadata file.”
Since we know that Internet domains, by nature, are ever-changing and transient, Wareing’s warning is a major eye-opener to anyone who would consider buying an NFT.
Indeed, if these expensive purchases can be winked out of existence by a change in Internet domain registration, NFT holders could end up in big trouble.
These types of digital assets were already under scrutiny as pretty dubious in value according to many investors and finance professionals.
“Piracy is running rampid in the NFT space,” wrote ThePie69 recently in a Reddit thread titled: NFT’s Are Worthless In The Long Run – Change My Mind. “There is no accountability. Anyone can use / copy the same piece of digital art, etc. that they come across. Why would anyone care who purchased the NFT “right” of some piece of a digital picture. It’s not preventing anyone from using it, they will just continue to do what they have been doing before NFTs even existed.”
So take note: the market for NFTs is a strange one indeed. Tread carefully.
