The NFT bay website was launched in November 2021 by Geoffrey Huntley, an Australian artist, in an attempt to draw attention to issues associated with non-fungible tokens, or NFTs.
NFTs have become immensely popular as a means of certifying ownership of unique assets. They are commonly used within the context of digital art. Some NFTs have been garnering a lot of public attention for their hefty price tags. This has led many to question whether NFTs should be worth that much. After all why pay for, say, a digital image that you can ‘right click and save’ on your computer for free? This has led Geoffrey Huntley to create the NFT bay website.
The launch of the NFT bay website
What is the NFT bay website? The website describes itself as “the billion dollar torrent: all the nft’s on the ethereum & solana blockchains.” It is styled after the “pirate bay”. Pirate bay was created in early 2000s as a peer-to-peer file sharing platform using the BitTorrent protocol by a Swedish anti-copyright organisation. It allowed users to access movies, music, etc. for free and, as a result, faced legal actions due to copyright infringement.
In a similar vein, the NFT bay provides a 17.76 terabyte file uploaded on Nov 18, 2021 by Geoffrey Huntley (link here). You can go ahead and download this file to have a copy of all the NFTs created using the ethereum and solana blockchains!
The galaxy’s most resilient NFT BitTorrent site.Source: The NFT bay
The artist refers to NFTs as a “tulip mania”. That is, he believes that the NFT market is a bubble, and the prices paid for NFTs cannot be rationalized. He also draws attention to the concerns related to the environmental impact of digital tokens (i.e., the emissions generated by cryptocurrency mining):
WTF? We destroyed our planet for THIS?!Geoffrey Huntley
The NFT bay has a newsletter that you can access by subscribing to Geoffrey Huntley’s private contact list. There is also a link to the media coverage the website received here. And, you can read the artist’s press statement here.
Are NFTs this generation’s tulip mania?
The tulip mania was a 17th-century phenomenon in the Netherlands. It was a buying frenzy that involved, well, tulips (as many would know tulips are to this day highly popular in the Netherlands). More specifically, tulip prices, especially those of rare types, increased astronomically over the course of a couple of years. At the height of the mania, some tulip bulbs were worth multiple times the average annual salary at the time. Then, the frenzy ended abruptly with a sharp downturn in prices in 1637.
Many consider the tulip mania as the first economic bubble. It certainly wasn’t the last one. Notable recent ones include the Dot-com bubble of 1999-2000 involving internet stocks and the US housing price bubble that led to the sub-prime mortgage crisis.
Unfortunately, a key problem with bubbles is that markets are not easily convinced of their existence until they burst. This is not least because at least some parties benefit from a growing bubble, and it becomes hard to say “the party is over.”
The NFT bay website and Geoffrey Huntley are right to draw parallels between the soaring demand for NFTs and the tulip mania. It is impossible to find a rational explanation for why tulips suddenly rose so much in value given their lack of importance. In layman’s terms, we don’t eat tulips and don’t need them to produce anything that is crucial for our existence. They are not valuable in the manner of gold or diamond, either. So, it is very hard to justify the astronomical rise in their value during the tulip mania. In a similar vein, it is hard to see how NFTs involving digital art can sell for such high prices.
After all, there is nothing that prevents us from right-clicking an image sold as an NFT and saving a copy of it on our computer. Yes, we would not be the official owner of that image as such, but maybe that is ok if we owned exactly the same file as the official owner without paying any of the cost. To add to these issues, there have been significant concerns that NFTs are being hyped up to sustain their use in money laundering.
NFTs certainly have a positive aspect in terms of rewarding digital artists for their work. However, it is unclear if they will maintain their popularity due to the issues outlined above.
In this post, we explain how and why the NFT bay website came into existence. The website offers a repository of NFTs and is an attempt by the Australian artist Geoffrey Huntley to highlight the problems with NFT markets. In particular, there are concerns that NFTs are simply a bubble and the prices they fetch are irrational. Such concerns are compounded by the use of NFTs for money laundering, in particular.
What is next?
This post is part of our free course on tokenomics where we explain the economics behind digital tokens such as NFTs and cryptocurrencies. In the previous post, we covered fungible tokens, discussing their distinguishing characteristics from non-fungible tokens.
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