The vast world of cryptocurrencies – which includes blockchain-backed technologies such as digital currencies, non-fungible tokens, Internet organizations, play-to-earn video games, the metaverse and Web3 – has what it takes researcher Catherine Flick calls a “colonialist mentality” which she says is based on central entities and poorly paid workers.
“These people sail the sea to get there first, plant their flags and make money,” says Flick, a researcher at De Montfort University’s School of Informatics. “But at the expense of the people doing the work, who are less likely to get the same kind of benefits and who are more likely to be exploited or not understand what they’re getting into.”
Workers, like some artists behind collections of digital tokens called NFTs, are paid less than their fair share of benefits, he says. A Wired article noted that the artist behind the successful Bored Ape Yacht Club collection, which features 10,000 pieces of art, said her salary was “definitely not ideal.”
Flick, who has conducted research on topics such as video game ethics and technological innovation, is among a number of critics who have emerged recently to warn investors not to get caught up in the hype.
Cryptocurrency critic and YouTube personality Dan Olson, whose video on NFTs garnered 6 million views, called cryptocurrencies the “biggest scam” whose ideals are “deeply destructive to the fabric of our society.”
Flick points out an obvious disconnect. One of the key principles of the crypto world is that it is “decentralized”, meaning that no one person, company or government is in control. But that may just be a ruse, as “we’ve seen the recentralization of a lot of the theoretically decentralized stuff,” he says.
For example, Yuga Labs, the team behind the Bored Ape Yacht Club, acquired the popular CryptoPunks collection of NFTs, as well as Meebits from Larva Labs. This means that the group now owns two of the most valuable NFT projects on the market.
In response to the news, Molly White, a crypto critic who runs the satirical Twitter account called “web3 is doing great,” said: “Nothing really says ‘decentralized’ like one company controlling the most expensive NFT collections! and popular!”
Flick also points to NFT exchanges, where buyers and sellers can trade digital collectibles, as another example of centralization. If the market was truly decentralized, it should be easy for people to sell NFTs on their own account. The thing is, adds Flick, “society doesn’t work like that.”
“We look at centralization because people need it to be easy to use, and they need to be able to see what’s for sale, and they need to be able to have nice user interfaces because they don’t understand it. They don’t want to understand it. They’re probably not interested,” he says. “Like the classic: you don’t need to know how your car works to drive it.”
In recent years, cryptocurrencies have become mainstream. The market capitalization of bitcoin and other tokens topped $3 trillion in 2021 before retreating, while NFT sales soared above $40 billion.
But Flick has a grim outlook on wild earnings: Be wary of investing; it will inevitably fall apart.
“The people who win are the ones who got in early, which is probably not you. And those who lose will be the ones who keep the bag.”
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