A defense of Ethereum and NFTs

On parrying and critiquing the naysayers!

Metaversal is a Bankless newsletter for weekly level-ups on NFTs, virtual worlds, & collectibles


Dear Bankless Nation,

Some in the mainstream talk about Ethereum and NFTs as if they’re monstrosities that have been loosened on the world.

Well, that’s a hard pill to swallow for those of us who know better.

In today’s post, I do some parrying and critiquing of these critics. I don’t have all the answers or all the insights, but ultimately I hope to further the conversation on how and why much of our work in the cryptoeconomy is important and should be defended.

So, how about a little defending then?

-WMP


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The Crypto Defendooooor (Ahhhhh I’m defending)

Let’s get right into it. Some mainstream critics argue that the Ethereum and NFT ecosystems are a giant hyper-capitalist bubble that’s destroying the environment. These thrusts can be parried in various ways.

First, an international community of users are collectively building Ethereum as a credibly neutral “civilizational trust layer,” or rather a “global public utility and settlement layer.” By the nature of this structuring and the arbitrary programmability of smart contracts, the economic and political possibilities available here are limited only by our imaginations.

For instance, I reckon in 100 years every labor union will be a DAO. Or consider how even now you could undoubtedly code up a dapp based on the Bank of the People, an anarchist credit union devised by the “father of anarchism” Pierre-Joseph Proudhon. So to hail Ethereum and NFTs as inherently and thoroughly hyper-capitalist is to miss the forest for the trees, and a lot more. They’re DIY public goods infra, and that will mean a lot of different things to a lot of different people over time. Believe it.

As for the eco-disaster line, it’s rhetorically insincere. Currently, Ethereum appears to consume less annual energy than the U.S. video game industry; also it’s estimated that soon at the base layer “Ethereum will only use the [annual energy] equivalent of between 710 and 1650 average Australians in the future.” Not bad for the 21st century’s public cultural and financial settlement layer, right? What will Visa and Mastercard’s energy numbers look like in comparison?

Moreover, note how the great “modular” layer-two migration has also just begun and how going forward the proliferation of these L2 scaling solutions will support millions and then billions of users in green fashion. This is the way, and it’s already happening.

On utilitarian grounds, then, and considering how many people and the types of people Ethereum and NFTs have already empowered (by and large kind, proactive, and smart), I think their energy use to date is more than justified. And it’s vastly justified considering 1) how much activity Ethereum + L2s will de-physicalize or make green over time, and 2) the types of eco-friendly activities Ethereums and NFTs will increasingly facilitate coordination-wise, like green DAOs and beyond.

So we can problematize and defend against the “hyper-capitalist eco-disaster” critiques easily enough, right. And I won’t even bother with the “all NFTs are scams” line, it’s utterly disingenuous. Where does that leave us? Why are people saying these things?

So it turns out the NFT hater mob isn’t gonna stop when it’s all environmentally friendly — that was just their first line of attack and they find new ones pretty quick […] it was never really about the environment.” Jackson Dame

Alas, I get the sense most of these Ethereum/NFT naysayers are unwitting agents of the mainstream status quo that isn’t working. They resist what could be breaches to that status quo because of reasons of comfortability or uncomfortability, and in doing so they defend the status quo and extend it. 

This all sort of reminds me of John Carpenter’s 1988 film They Live, featuring Roddy Piper as “Nada” and Keith David as “Frank.”

As the movie’s IMDb summary, written by Melissa Portell, notes:

Nada, a down-on-his-luck construction worker, discovers a pair of special sunglasses. Wearing them, he is able to see the world as it really is: people being bombarded by media and government with messages like ‘Stay Asleep,’ ‘No Imagination,’ ‘Submit to Authority.’ Even scarier is that he is able to see that some usually normal-looking people are in fact ugly aliens in charge of the massive campaign to keep humans subdued.

To see what I’m getting at here, you can swap out “media and government” and “aliens” for the “mainstream status quo” in general that I mentioned before. 

Going off that point, there’s this great scene in the movie where Nada tries to get Frank to put the glasses on to see the way things are, and they get into a fight accordingly. At first Frank can’t accept the possibility Nada could be right, but eventually he sees (Fight scene below, violence/language warning).

I think those of us around Ethereum and NFTs are sort of like Nada, while many other people are like Frank right now. We’re the metaversal barbarians at the gate who’ve seen and lived beyond the city walls. They’re the city insiders who fear but actually do need the open lands beyond. Will they put on the glasses, too? Will they become nomads resisting state machines, too?

“These new ways are wrong and should be avoided,” the naysayers currently say, “you should instead do things how we already do them.”

In other words, you shouldn’t put on those strange glasses; you shouldn’t sell NFTs instead of shipping physical prints; you shouldn’t start a DeFi app when you can just legally start a bank; you should stay in the city walls with us like good proper citizens! 

Yet we here in this ecosystem and in these communities have already put on the glasses, as it were, and we look to help others do the same. The naysayers’ arguments can’t be convincing again because of this. Call us new kinds of culture angels, then, though we may still seem like crazy monsters to those who don’t know better yet. On that point, I recall an insightful quote from Antonio Gramsci:

“In a time when the old is in the middle of dying and the new is not yet born, things that look like monsters may appear.”


Action steps


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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.


Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here.