Non-Fungible Tokens (NFT) are currently at the center of a rising hype for blockchain technology and a cryptocurrency-oriented economy. They are essentially a digital guarantee that one owns a certain digital or physical asset, encoded directly into a blockchain system such as Ethereum. Unlike its counterpart blockchain asset cryptocurrency, NFTs cannot be interchanged, hence “non-fungible”.
Despite early concerns from various experts that it may just be a massive Ponzi scheme, NFT markets have been growing at sky-high rates. Nonfungible.com, an NFT data firm, alongside L’Atelier, a research firm, published a study showing that NFT trades reached a grand total of 1.7 billion USD, a 210-fold increase in just over a year. Christie’s, an auction house that usually only handles historical artifacts, opened an auction for an NFT artwork which fetched a record-breaking 69.3 million USD.
Though these NFTs and blockchain networks may seem rather unfounded and suspicious, they are both considered as precursors to a new age of decentralized networks, also known as Web3. Web3 is a new paradigm in internet technology, where all transactions and their ledgers are transcribed on a large-scale peer-to-peer network of strangers, without the potential meddling of a middleman. It is supposed to make centralized authorities obsolete on the web and stop big-tech companies from abusing their monopoly on internet technology to extract private information from unsuspecting users.
However, an experiment by Moxie Marlinspike, an American entrepreneur and software expert, demonstrated some flaws in Web3. He exploited the fact that NFTs did not actually carry the information of its asset but usually only a link to an external server address that held the asset. This was contradictory when thinking about what web3 was all about, destroying the server-user relationship-based internet ecosystem and making it all about user-to-user interactions. Hence, Marlinspike made an NFT which, depending on the site of access, changed shape into different images and even an emoji in the shape of feces for some routes. This brought forth some controversy, as this was against the concept that NFTs should be “non-fungible”.
As news about this shape-shifting NFT was shared around the web, OpenSea, an American-based NFT marketplace, decided to take down Marlinspike’s item. Apparently, it was against their terms of service, despite the fact Web3 was supposed to remove middlemen and gatekeepers from the internet. It appeared Web3 had sprouted up its own gatekeepers. Marlinspike argues that this follows from the fact that people simply do not want to run their own servers and prefer a centralized entity to do the work for them. This was the reason centralized networks had sprung up in the first place, and a fundamental cause that was holding Web3 back.
Despite these concerns, block-chain technology and Web3 themselves have promising prospects that could really reform how security on the web works. A single server could be compromised by a few determined hackers with decent skills, but a large enough blockchain network is simply too computationally complex for malicious users to penetrate even with extensive computing power resources. The future for Web3 should be set down with careful considerations for new internet protocols and sufficient thought into just how much we want the internet to be decentralized.