NFTs = Digital Money Laundering

In 2021 I launched an OpenSea profile so I could explore the world of minting and selling NFTs. I learned the hard way that NFT markets are just for money laundering criminals, and of no use to 99.9% of actual artists.

What is an NFT?

If it sounds like I’m speaking Greek (and you’re not Greek)… NFT stands for “Non Fungible Token”, which of course tells you nothing about what it actually is, so to try and explain as best I can: An NFT is a digital file – for example a digital artwork, a video, or an in-game character – that’s minted as a digital asset, which can then be sold in the cryptocurrency market. It’s an attempt to make a digital item feel like a one of a kind physical item that one person can “own”, like they could own a painting in the real world.

Much like our paper money isn’t backed by gold or anything valuable – it only has value because we say it does – most NFTs are like that too.  They’re mostly just bought and sold as investments, like stocks, but I guess there are collector’s who just horde them as prizes, and minor instances where they are backed with something of tangible value.

NFTs as Money Laundering

I’ve been following the scene from almost the beginning and I’ve long suspected that much of it is just money laundering because the NFTs fetching the best prices are objectively crap.  More than half of the NFTs I’ve seen look like poorly drawn clip art. Of course I’m using the word ‘objectively’ a bit liberally because we all know that no matter how pathetically bad a piece of art is, they can always hide behind the ‘ol “art is subjective” excuse… but you know, and I know, and they know too. *wink*

We already know that money laundering is rife in the modern art world, and I think it’s mainly because of it’s subjective nature. if some fool tapes a banana to the wall and sells it for six figures as art (actually happened), and you point out that it’s not art, then they turn around and say that art is subjective and you’re being elitist and gatekeepy. That way, rich people can launder their ill-gotten gains in peace.

As a side note, it’s also hilarious that it was confirmed recently that the CIA did in fact promote and fund expressionist paintings. for their own nefarious purposes. For non art history lovers, Expressionism is where they throw paint on a canvas and call it art.

NFTs are just the next obvious evolution. Now rich criminals can launder their crypto with “art” too.

NFT’s with Real Benefits

Even so, some NFTs are backed by real world benefits, for example, having a specific NFT in your crypto wallet may get you access into places or events where you couldn’t ordinarily go, or get you exclusive discounts on services or items in the real world.  When I originally wrote this article, I thought naively that this is probably where the bulk of the NFT industry was heading. That and continued money laundering of course – I’m not that naïve. 🙂  

Environmental Concerns with NFTs

Many artists have a knee jerk reaction when they hear anyone mention NFT and immediately reach for the pitchfork, but it’s important to note that not all NFTs are equal, and not all crypto is devastating. There are different types of blockchains (digital ledgers containing crypto). Some, like bitcoin, are undeniable bad for the environment. Some, like Ethereum and other proof of stake (vs proof of chain) blockchains are way more energy efficient, and the one I planned to mint on is the Polygon network, which is one of the very best, in terms of energy efficiency – at least at the time of writing. Perhaps they will release even better ones. So please don’t lynch me.

My Experience with NFTs

Seeing as I’m not part of a crime syndicate, and I really did want to offer something of value, I linked all my minted NFTs to the benefit of owning the high res file too. I researched crypto pricing and made mine a little cheaper than average, and had them in the market for more than two years.

Not one of them sold.

What’s more is as I edit this article three years later, OpenSea has become flooded with AI slop. Instead of clamping down and banning AI, OpenSea has now entered a deal with an AI slop maker, which proves that NFTs are not for the benefit of real artists, but rather for money laundering criminals with no taste. Needless to say, I’ve given up the entire venture as an epic waste of time, but at least I can warn you to not waste yours!

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Photo by Fernando Hernandez on Unsplash, edited by me.