At BlockDown 2021, EllioTrades, YouTube’s encryption program and co-founder of the Superfarm NFT project, joined a discussion on the value of non-fungal tokens with Edmund Schuster, Associate Professor of Law at the London School of Economics.
By definition, NFTs are unique pieces of digital content that are retrieved and transmitted over the Internet using blockchain technology, which is the common technology for cryptocurrencies such as Bitcoin (BTC) and Ether (ETH). As a main feature of NFT, blockchain guarantees digital rarity and authenticity of digital collectibles, but some experts believe that this is not strictly necessary.
Schuster, skeptical of NFTs, argued that there is no technical reason why the world needs NFTs, suggesting that collectible digital solutions other than blockchain can achieve “exactly the same properties.”
“If there is no clear explanation as to why you need this particular technology, I think it’s a hype or hype about the technology itself, not what we’re talking about. The professor noted that this is propaganda, in my opinion, almost by definition.
Schuster pointed to the question of trust in the gaming ecosystem, and argued that the use of blockchain alone would not make a collection system very different from a central database.
He said: “If you have to trust the party that organizes the game to enjoy your symbol, it does not matter if you have a secure version of the blockchain or a database run by the same people.”
Bear NFT also claimed that the “blockchain element provides unnecessary complexity” due to counterparty risk associated with the potential devaluation of digital holdings due to the opportunistic behavior of issuing companies. Schuster mentioned an example where game developers give players more powerful special weapons, making older weapons no longer valuable.
According to EllioTrades, expressed in the NFT debate, blockchain technology is important to ensure the protection of digital assets. “When you have a digital warehouse, a digital asset, and it is not protected by blockchain, time has shown that this digital asset will be stolen at some point. Information cannot be protected without a decentralized network that provides this protection. This is why blockchain is crucial, ”notes EllioTrades.
EllioTrades stressed the importance of decentralization offered by blockchain technology, and said that virtual property in NFTs and in cryptography in general can not be confiscated from users.
NFT Thor said that the technology gives token holders a better quality of life, as well as more freedom to interact, including lending, leasing and other complex activities related to decentralized financing.