Gambling website dappGambl posted a blog post titled “Dead NFTs: The Evolving Landscape of the NFT Market” in September 2023. Mainstream media took up the news about the ‘report’ and the negative sentiment about the general NFT market, but the basis for argumentation is flawed, and there is confusion about price and value. The method provided is very opinionated. The reason for such a blog post would not be of much concern usually, but in this case it is remarkable: high profile and mainstream news media has jumped on the topic and has made it a fact (check how much google buzz this has already created).
Crypto stamp rhino posted a longer critique as thread on Twitter (X), and we felt we have to chip in with a commentary. Here is a list of high profile websites which have re-posted or commented on this poorly researched article
- Rolling Stone: Your NFTs Are Actually — Finally — Totally Worthless (why so opinionated?)
- Econotimes.com: NFT Market Hits Major Snag: 95% of Tokens Valued at Zero, Reveals dappGambl Study (so the blog post is a ‘study’ now)
- The Register: “95% of NFTs now totally worthless, say researchers” (why are these people ‘researchers’, what are their credentials? The blog post has zero research credibility, nor proper scientific or journalistic fact-checking. OP did not use the phrase ‘totally worthless’ and confused price and value)
- Coindesk: 95% of NFTs May Now Be Worthless, Report Suggests (better title, as it says ‘May’ and ‘report suggests’. The term ‘report’ is a bit overstated for such an opinionated clickbait.
The problem with the original ‘research’
First of all: this was not ‘research’ per se. Research is defined as a ” structured inquiry aimed at discovering, interpreting, or revising knowledge”. The article presented by dappGambl is opinionated, is lacking verification, and is not critical analysis (which all are relevant aspects of research). This is an opinionated blog post to boost a crypto gambling website (oh the irony).
19 points of critique about the article by dappGambl
- Lack of Verification: The data is primarily sourced from NFT Scan without cross-verification from other sources or experts, which undermines the reliability of the findings.
- Unsubstantiated Claims: Claims like “95% of NFTs being worthless” are asserted without sufficient evidence or explanation of the methodology, misrepresenting the scope of the dataset as reflective of the entire NFT market.
- Title Misrepresentation: The sensationalized title “Dead NFTs” could mislead readers, projecting a conclusive negative outlook on NFTs to attract more readership.
- Lack of Objectivity: The article leans towards a negative narrative without offering opposing viewpoints or acknowledging the limitations of their analysis, displaying a lack of objectivity.
- Speculative Language: Use of terms like “eye-watering” and “shocking” reflects a bias and lack of objectivity, which deviates from a neutral tone expected in journalistic or scientific writing.
- Misrepresentation of Data: The comparison regarding energy consumption lacks depth and context, which could lead to misinterpretation.
- Lack of Transparency: Absence of information regarding the analysts, their credentials, and the methodology employed casts doubts on the credibility and reliability of the analysis.
- Comparative Analysis: The article fails to provide a rigorous comparison between top NFT assets and the broader market, overlooking the inherent differences between these segments.
- Inadequate Methodology Disclosure: The methodology for data collection and analysis is not adequately disclosed, hindering readers from evaluating the robustness of the findings.
- Lack of Industry Overview and Market Trends: The article misses a comprehensive industry overview, key market trends, and projections, which are crucial for a balanced market analysis.
- No Analysis of Key Competitors: The absence of insights into key competitors in the NFT marketplace signifies a lack of thorough market analysis.
- Absence of Quantifiable Data: Lack of quantifiable data to substantiate claims made, underscores the need for data-driven analysis in market research.
- Absence of Expert Opinions or Third-party Validation: Lack of external expert opinions or third-party validation compromises the balanced view necessary for credible journalistic or scientific writing.
- Lack of Credibility on Part of the ‘Researchers’: The article does not provide credentials or qualifications of the individuals conducting the analysis, undermining its credibility.
- Narrative-driven Rather Than Data-driven: The narrative-driven approach, as opposed to a data-driven approach, casts doubts on the objectivity of the analysis.
- Lack of References or Sources: Absence of references or sources for data and claims made violates fundamental principles of scientific and journalistic practice.
- Misleading or Sensationalized Title: The title could mislead readers regarding the content and findings of the article, hinting at sensationalism.
- Absence of Environmental Factors: Ignoring broader environmental factors affecting the NFT market signifies a lack of thorough market analysis.
- No Clear Distinction Between Opinion and Fact: The blurred line between opinion and fact in the article indicates a lack of adherence to journalistic and scientific writing standards.
The article “Dead NFTs” falls short of adhering to several fundamental standards of journalistic and scientific practice. The lack of objectivity, inadequate methodology disclosure, absence of expert opinions, and sensationalized title significantly undermine the article’s credibility and value as a reliable source of information on the NFT market’s state. Hence, it leans more towards an overhyped blog post rather than a rigorous research/study.
These issues compromise the article’s credibility and reflect a departure from good journalistic and scientific practices.
Value and price are two different concepts
Price is the amount of money required to purchase something, while value is the perceived or intrinsic worth of an item. They are unrelated because price can be influenced by external factors such as supply and demand, market conditions, or cost of production, whereas value is subjective and can be based on personal perception, usefulness, or inherent qualities. An item might have high value to someone due to personal preferences or needs, but its price might be low due to market conditions or other factors. Conversely, an item might have a high price but low value if it doesn’t meet the buyer’s needs or expectations.
Price is the monetary cost of an item, influenced by market conditions. Value is the perceived worth of an item, based on individual preferences and intrinsic qualities. They can diverge significantly.
Price-driven value is an oxymoron
“Price-driven value” is considered an oxymoron because value is supposed to represent the intrinsic worth of an item, independent of its price. However, when value is solely determined by price, it contradicts the fundamental distinction between the two terms, hence creating a self-contradictory phrase or an oxymoron.
The relationship between price and value in the context of NFTs (Non-Fungible Tokens) is nuanced. Here are several arguments regarding the distinction and interaction between price and value in NFTs from various sources:
- Intrinsic Value: The Harvard Business Review article questions the intrinsic value of NFTs by asking how much a cluster of pixels could possibly be worth, hinting at the subjective nature of value in NFTs1.
- Market Valuation: Forbes notes that most NFTs are sold via auctions, which suggests that the price, and potentially perceived value, of NFTs can be heavily influenced by market dynamics such as demand and supply2.
- Valuation Challenges: The Journal of Accountancy mentions that valuation of NFTs became a hot topic with high-profile sales, indicating that price can sometimes create a perception of value, which can be challenging to quantify or justify3.
- Digital Abundance: A study mentioned on Nature.com revealed that the digital abundance of NFTs in digital games led to a substantial decrease in their value, suggesting that the price of NFTs can be influenced by the abundance or scarcity of similar digital assets4.
- Asset Type Dependency: Ecommerce Platforms mentions that the value of NFTs is typically dependent on the type of asset being sold, and can be dependent on its real-world price or speculation, indicating a complex relationship between price and value where one can influence the other5.
These arguments highlight the multi-faceted relationship between price and value in NFTs. While price can be determined by market forces such as supply and demand, value is often more subjective and can be influenced by factors like uniqueness, personal preference, and the type of digital asset in question.
Why NFTs are not worthless
The term “worth” can refer to both value and price depending on the context in which it’s used, but it’s more commonly associated with value.
- Value: When discussing the intrinsic qualities, usefulness, or significance of an item, “worth” is usually referring to value. For example, the worth of a historical artifact might be tied to its historical relevance and rarity, which constitute its value.
- Price: In a market context, “worth” can be used to refer to the monetary amount that an item is being traded for, which is its price. For example, if someone says a house is worth $300,000, they are referring to its price in the current market.
In many conversations, especially casual ones, people might use “worth” interchangeably to refer to either value or price, which can sometimes lead to confusion. It’s always good to clarify whether “worth” is being used to discuss intrinsic value or market price in a particular discussion.
Research Devalued: The Inflationary Erosion
The larger problem: today, mainstream media does not follow standard practices of research and fact-checking anymore. How could it slip through that the people who allegedly did undertake “research” are neither researchers (with a background in journalism, science, or any other) nor did write a study? Why is every blogger considered a researcher these days? Why are online posts considered ‘studies’?
In today’s attention-driven economy, the mainstream media often veers away from the established norms of research and fact-checking, potentially leading to a distorted representation of emergent phenomena such as Non-Fungible Tokens (NFTs) and blockchain technology. A disconcerting example of this deviation is the lack of rigorous inquiry by individuals who, lacking a background in journalism, science, or related fields, venture into the realm of “research” without adhering to standard practices of verification, falsification, and initial data scoping.
As the FTX trial commences, a whirlwind of emotions seems to engulf the narrative, overshadowing the legitimate and functional applications of NFTs and blockchain technology. These novel mediums have understandably ignited a wildfire of speculations, given their disruptive potential. However, the laxity observed in contemporary media’s investigative rigor should not be a gateway for adopting a careless approach in our discourse.
It’s imperative to recognize that while media outlets may falter in their duty, the essence of robust research inquiry remains undeterred. Through meticulous investigation, we can unveil the nuanced facets of these digital innovations, moving closer to an informed understanding, albeit never capturing the entirety of reality. This recognition underscores the importance of upholding the integrity of research and discourse, navigating through the digital wilderness with a compass of factual accuracy and analytical depth.