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K (he/him) for Fullstack Frontend

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Is Crypto More than NFT Scams?

Two months ago, I started looking into NFTs and crypto in general. The hype for NFTs was so high that a client of mine asked if I could write a piece for them to get more exposure in that space. I saw the hype too, and as with all tech a client asks me to write about, I did it. Getting paid to learn new tech is pretty awesome and the whole reason why I’m doing this writing business anyway.

Right at the start, I saw the first problem with that topic. The internet is plastered with investment advice and scammers who wanna sell you their latest media NFT. I dug through the crap and decided to buy two books instead of just doing research online.

Token Economy by Shermin Voshmgir and Hands-On Smart Contract Development with Solidity & Ethereum by Kevin Solorio, Randall Kanna, and David H. Hoover. They both gave me some insights into the crypto space in general with its fungible and non-fungible tokens and how to implement systems in that space with Solidity. It helped that the authors weren’t your run-of-the-mill crypto dudes.

Next, I started following some people on Twitter to be up-to-date on my research, and rather quickly, I got a taste of the fact that many people hate blockchains. I’ve been in the IT industry for over a decade and as a JavaScript, React, and serverless developer, I experienced quite some resentment in my time. It’s nothing new for me to use a promising new technology and find out many people don’t like it.

I wouldn’t consider these critics dumb just because they don’t understand that specific topic in all its depth. I don’t understand many things and still can help people with the knowledge I have. Also, I was in that place myself. I saw people I hold in high regard moving into the crypto, and I was sad that they would do such a dumb thing. How could they support all these scammers with their hideous jpegs?

How Can Smart People Do This?

What does “smart people” even mean in that context?

I have the feeling; smart doesn’t mean smart in the classical sense here. The type of people we talk about here are influencers, somewhat prominent people in an industry that are either good at marketing or consistent enough to improve their luck with “the algorithm.” So, we’re not talking about “people I consider smart” but “people whose opinion I like.” They can be dumb as they come on both sides.

On a side note: I see it as a good sign if I like one opinion of a person and disagree with their other views. That way, I’m sure I’m not just doing it because I like that person too much.

Why did I Leave for Crypto?

First of all, I didn’t leave. I only got one NFT-related article paid for by a client and still make almost all of my money with non-crypto-related writing. But I thought, I’m fresh in the space, and it would remove many assumptions if I just write about my personal experience.

Next, I wouldn’t consider myself particularly smart. I had many experiences that showed me I’m a slow learner. Learned swimming with 9, biking with 13, took me years to grasp functions in programming. But I made things work with persistence, and after some time, I figured out what helped me learn better.

I might not be one of these “smart people” who are leaving “the old world” for crypto, blockchain, or web3. But we also learned that we’re not talking about “smart people,” but just “people whose opinions we value,” so I don’t think it’s too far-fetched to extrapolate my own experience on other people.

Why do I spend so much time with crypto? Is it more than just a bunch of dudes shilling their JPEG NFTs? Is it destroying the environment, or could it help society?

It’s Fun

It’s pretty fun. I joined a community of developers that are interested in that space. Like many things in this young crypto world, the community is just forming, and it’s just lovely to be part of something that feels new and significant. I like to learn about new technology, and this is the newest of the new.

It’s Inclusive

I also had the impression that the communities I interacted with were pretty inclusive. I’m a white dude, so I’m biased, but in the two months in that space, the books that gave me the most crucial insights were written by women.

Also, I regularly talked with queer people, people of color, and women. I bought and read their books, got advice from them, and helped them out when they had problems themselves. This experience felt like crypto is open for everyone who wants to learn.

I’ve been in IT for over a decade, and I encountered that kind of inclusion only recently in communities like one of the Rust programming language.

It has a Low Entry Barrier

The entry barrier is low for a developer in that space. You don’t have to sign up for a cloud provider. To get started, you can just open your browser and use a blockchain. There are free blockchain-gateways that allow you to connect to a chain from a browser, and all the test networks are basically free, too, and they’re already up and running.

In terms of backend development, I’m coming from the serverless side of things, where things are straightforward, but even that feels quite a bit complicated compared to blockchain development.

Sure, signing up for a blockchain-gateway service is a good idea when you get into developing smart contracts, but it isn’t necessary to get started, and I’d say you can go by for the first one or two weeks without doing it.

A counterargument here is that the learning resources are a bit cumbersome. As an educator, I think most people who create learning resources in that space could do a bit better. Also, the whole security aspect is something that throws people off at the beginning. Asymmetric cryptography usually isn’t something a developer learns on the side.

It’s a New Paradigm

The next point unique to the blockchain is that it’s a new paradigm of doing things. Decentralization and protocol-level payment integration might seem incredible but not that important. Critics say blockchain is like AWS but more expensive, slow, and bad for the environment.

And it’s already alienating people who are curious about crypto. A private message I got on Twitter asked, “is this something i should do or is this like a earth harming fracking thing? lol. i'm desperately looking for a developer tech job period.” Which I found sad.

It feels a bit like the anti-serverless arguments to me. Sure, a Lambda function is more expensive per execution than a container or VM that’s always under full load. But that isn’t the point. Lambda removes much of the work running low-level infrastructure brings and, in turn, removes the costs of that work. You might pay more per execution, but you can also do with less personnel.

The same goes for blockchain-based infrastructure. All the critics are correct, but it might be that the points they deem unimportant are so much more valuable in the long run.

Decentralization

While not in full gear with younger blockchains, decentralization might be a killer feature alone. We’ve all seen what happened with Tumblr or how OnlyFans wanted to rid themselves of sex workers. We’ve all seen the power that payment providers have. Even everyday services like social networks are prone to censorship, so the whole “is decentralization really needed” might not be answered with “yes, but only in a very few special cases.”

While decentralized technology is in its infancy and desperately needs improvements, especially in terms of energy consumption, I think it could be a step in the right direction. I don’t know how things will go, and it probably won’t be a utopia in 10 years from now. Still, decentralized systems could swing the pendulum more to the masses, not single entrepreneurs who blow it on space holidays.

Now, you might ask, “Why does it have to be blockchain? There are decentralized systems out there that are more efficient than blockchains; why shouldn’t we use those?” which is an excellent question that brings us to the next point.

Payment at Protocol Level

While payment providers like Stripe made “getting paid for your service” simpler in recent years, it still feels like payment isn’t an integral part of software architectures.

If it’s ad-financed, you integrate an ad-provider, it pays you for the ads your users viewed, and then you pay your employees, cloud provider, and hopefully yourself in the end.

If it’s subscription-based, you integrate a payment provider, users pay them for a subscription, the provider pays you, and you pay what you have to pay, etc.

There are many ways you could make money with your service, some more offline, some more online, but overall they all feel like grafted on a software that could work perfectly well without payment.

It seems, at least to me, that blockchains are the first mainstream(-ish) technology that includes payment as an integral part of its design.

You can’t write or execute things on-chain without paying for it. Heck, you can’t even deploy your programs on-chain without paying for it. This makes it obvious, right from the start, who will pay for all that decentralized infrastructure.

Smart Contracts

Smart contracts are what make decentralization and protocol-level payment accessible for the everyday developer. While cryptography might not be the most accessible concept to grasp, Solidity isn’t much more complicated than, let’s say, Python or JavaScript.

JavaScript gave us much good on the web, but it was also used for popups and user tracking. I realize that many people out there still think JavaScript is a stain on the internet. But I think it’s a net plus with all the rich applications I use daily, without a need to consider if I have the right operating system or have synchronized my data to all my machines.

People use them to build cryptocurrencies and now to make NFTs, and both have good and bad applications. NFTs aren’t just about media ownership certificates stored on a blockchain. They can be much more, proof of access, knowledge, or membership, etc.

I own two NFTs, one for a DAO membership and one for an ENS domain, and they have nothing to do with jpeg shilling. They can’t be “right-clicked and saved because the ownership gives me more options than looking at them or listening to them.

Smart contracts don’t solve scamming, and their “code is law” pledge doesn’t fix bad laws in any way. They make applying such rules more transparent and remove steps between creating such a law and enforcing it.

Summary

The points above work together and set the “like AWS but more expensive, slower, and worse for the environment” and “Is Crypto More than just JPEG NFTs?” in context.

Are blockchains more expensive than AWS? Sure, but you’re buying something that is just similar to AWS infrastructure, but not the same. Depending on your circumstances, what you buy can have much more value than what AWS is selling.

Are blockchains slower than AWS? Sure, they have limited application, and in many cases, you might not be able to wait for the execution of a transaction. If you need blockchain-specific features, waiting might not seem bad.

Are blockchains bad for the environment? I don’t know! They might be, but this question isn’t trivial to answer. It’s not that you replace AWS with Ethereum, and everything else stays the same. A blockchain gets you rid of payment providers and banks, which all have a pretty hefty CO2 footprint themselves. With every update, these systems get more efficient, and some layer two solutions for Ethereum already claim to be carbon neutral.

Is there more to it than JPEG shilling? I very much think so. NFTs are a way for artists to make money, and where money can be made, scammers aren’t far.

This is what’s in the news right now, but NFTs isn’t just about media ownership; they can be so much more and already are. “Code is law” might not lead to just laws, but it removes much of the interpretations between the creation of law and its application, which can help eliminate some amount of human bias.

What Does the Future Bring?

Just to make things clear, I don’t know if the upsides will play out in the long run. In the end, it might very well be that the old wealthy class will take over the blockchain space and distribute it between themselves like they always did. At least right now, the whole blockchain space feels like in the 90s, when the internet was in its infancy.

What about me? Will I keep using non-blockchain technology? Of course!

I love serverless tech and for many workloads, spinning up a Lambda function or a Cloudflare Worker is more than enough.

But blockchain technology opened my eyes to solutions to problems I knew existed but had no idea how to solve them. So, when I now try to build something, I ask myself which part of the system should better live on-chain.

Discussion (5)

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itr13 profile image
Mikael Klages

I think you have a few misconceptions:

1: The environmental cost of crypto is not in the contracts themselves, but in the mining for currency. This does have a very large and unnecessary carbon footprint

2: Blockchain is great for decentralization, but 90s of ventures using it for financial gains are in essence centralizing them. An NFT is literally just a token that everyone agrees you own, and any image or item some random person or authority says is connected to said token is still owned by whoever made it. Take for example crypti kitties, if they ever shut down their servers then you're essentially left with nothing.

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kayis profile image
K (he/him) Author • Edited on
  1. I totally get it. My argument was:
  • Mining has high energy consumption
  • Banking has high energy consumption
  • Smart contracts require mining, but could eliminate banks
  • Smart contracts could be indirectly lead to lower energy consumption overall

Also, many chains don't use proof-of-work, Ethereum is moving away from proof-of-work, and Layer 2 solutions for Ethereum, that are already available today, don't use proof-of-work.

  1. This is a very real risk, yes.
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itr13 profile image
Mikael Klages

Though eventually cryptocurrency might be better, using them at the current point of time where the biggest ones use proof of work is irresponsible.

Ethereum has been moving away from proof-of-work for years, but should not he used until it actually has finished said move.

Though cryptocurrencies originally were meant to work as a decentralized normal currency, people keep trading them like stocks, making them too volatile for normal people.

Banks would still be needed for tax-reasons, unless governments started accepting cryptocurrencies as their main coin. But this is highly unlikely in its current state.

Thread Thread
kayis profile image
K (he/him) Author

Yes, crypto is volatile right now, that might be an issue.

But, as I said, L2 PoS solutions are available right now, big companies like Reddit are building featues with them.

And there's a literal government that started accepting a cryptocurrency as legal tender.

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codecustard profile image
Emmanuel Barroga

I would say that the majority of crypto whether that's currency or NFTs are useless. However, I will say this.... the next few years will be another lesson of standing by people that you really believe in at the beginning and not after the fact.... which is what investing was supposed to be all about.

People flock to bluechips, which are at the peak.... For people with small capital it makes zero sense to get in on that... what makes more sense is using your small capital on smaller businesses that would really benefit and your capital could make a better impact, vs little to no impact on a bluechip stock.

There are people that are against NFTs because they see the whole idiocrasy behind big money creating NFTs on things with no real community. Kinda maintains the whole "B2B" venture capital fundraising -> sell strategy business model that the recent years has does not focus on end consumer wants/needs.

However, NFTs would really help game devs for creating communities. Offering limited free NFT's for your community, which is worthless at the start, but if you're able to foster and build communities you can make a bunch of money from the FOMOs that did not see the value in the beginning.

The NFT space is not about selling fake digital coins for outrageous prices. As long as you drop the FOMO mindset, and go back to the main principles of an NFT and the principles, you're golden.

2021 is proof that people with money are willing to spend ridiculous amounts of money on speculation and things that are overvalued.....

If you have the means to provide value (games, saas, content, etc..) NFT's are a great way to capitalize on real value, as long as you provide it.... think nft license keys, nft game assets, nft content, etc...

Hopefully this makes more devs really consider opposed to getting a bad taste of crypto from all the dumb valuations that they see on the news on a daily basis...... if you maintain impressions based off the FOMO news, you're kinda missing out on something that doesn't cost you that much money to implement, opposed to trying to get a sense of what's valuable or what's not valuable and putting like 5k+ on a project you have no control over.