What about Ethics in the NFT space?

Once upon a time in the utopian universe of libertarianism, a new technology brought us a little closer to the ultimate goal of this philosophy.

As you probably already know, the blockchain allows you to check transactions thanks to different mining algorithms and to the wallet’s private keys storing your assets.

For fungible assets such as Bitcoin, this proves that you do have a number of them in your portfolio. Non-Fungible Token guarantee, in a forgery-proof way, a total right of ownership for more and more types of assets to its holder. 

This way, there is no longer a trusted third party to manage your assets, you are supposed to be the sole master on board. By no longer delegating this trust to others, it belongs to you by right! And you are no longer a mere observer but a real actor in this system.

But do you have enough confidence in yourself? In your knowledge of the economy and this technology? Are your ethical principles strong enough to keep on track with the libertarian philosophy.

What is Ethics?

To introduce this delicate subject, here is the definition of the Cambrige dictionary:

“a system of accepted beliefs that control behaviour, especially such a system based on morals”

Ethics is a concept that continually evolves according to morals, usages and regulations. In the absence of state regulation surrounding NFTs, only individual or community choices remain to define our conduct. This is why it is important to discuss and question one’s convictions in order to (re)define this notion. The goal is to find a balance so that everyone benefits from this ecosystem.

For a better comprehension, please consider that this article have been written based on the definition of libertarianism from the french version of Wikipedia :

 “a society whose institutions respect and protect the freedom of every individual to exercise the full right of ownership over himself or herself as well as the property rights he or she has legitimately acquired over external objects.”

If we take the example of Bitcoin, there is a track of political convictions in the Genesis Block but also a discussion forum for the community to exchange around the use of the project.

The Bitcoin ethic

When the Satoshi Nakamoto nickname ceased to be active, it allowed all those working on the project to take control of governance and de facto interpretation of its use. Without institution to rule, the only ones who were able to make decisions for the project was: Every individual involved, holders, builders, miners, content creators – every actor has a role and a say in the governance and future of Bitcoin.

When the “external objects” were only blocks containing Bitcoin to be shared between miners, no problem: Ownership issues revolved mainly around securing the blockchain to avoid purely technical hacks. However, when Bitcoin began to be used for something else than buying pizzas, the society’s codes began to be hacked and it did not appeal to everyone…

When Mark Karpelès was arrested for two things: the FBI thought he was linked somehow with the darknet marketplace Silk Road and the japan police thought he stole the 850 000 Bitcoin.

When Ross Ulbricht was arrested, a lot of people in the Bitcoin community tried to defend him in the name of freedom. Unethical and vicious techniques were used by the FBI to take him down, in the name of the war on drugs…

Without going into the sanctimonious judgment (is it “right” or “wrong”) of the arrest of Ross Ulbricht or Mark Karpelès, is it not ultimately the arbitrary intervention of States without consulting or listening to the various actors in the field that deserves further thinking?

Source :

• I Sold My Soul in Bitcoins – Jake Adelstein

Side Effects

The consequences of a prohibition are always the same: the multiplication in clandestinity of what was intended to be prohibited.

To prepare for this change and avoid ending up like Mark, the new trading platforms took the lead and started implementing KYCs in anticipation of regulation. The avarice and fear of these actors prevailed over the decentralized ideal to which Cypherpunk aspired, and the easy way out was imposed fairly quickly. Of course, some took advantage of this because not everyone shares the same ethics and many official user documents ended up on the Darkweb…

The climax of this avarice was reached at the end of 2017, but fortunately the very expensive price and the delay between transactions caused by the clogged Ethereum blockchain played a safeguard role to put an end to this speculative madness. Maybe people remembered that Bitcoin was mainly used on the Darkweb. Maybe this CryptoKitties wasn’t so pretty and you didn’t have to be in such a hurry to finally get one.

With the dry loss that everyone suffered, the state of affairs was catastrophic enough for a massive adoption of the blockchain :

• The evangelists were preaching their churches.
• The “general public” had locked itself into its conservative individualism.
• The Whales held the markets in their hand.

So how, in this climate, have the NFT projects fared?

Are NFTs a Win-Win?

At the beginning of 2018, a new dream appeared in the minds of the survivors of the bloodbath:

« What if it was possible to earn crypto-currencies other than by mining or trading? »

Knowing that it had become out of the question for users to pay another single cent for a Crypto project, the developers used a fairly simple method to gain the trust of users and that works very well in supermarkets: give a sample of the product.

Thanks to the ERC-721 standard that has become operational, the use of “Giveaways” had a double effect :

• Create some buzz about the games and projects users’ social networks
• Develop FOMO as every class of assets are limited edition

Little by little, a new bond of trust was established, the one of an audience ready to play for rewards, and that it was going to be possible to exchange for cryptocurrencies. The compromise was the right one: while waiting for prices to recover, it is possible to obtain assets through entertainment. The « Play to Earn » term was created and in essence, this function seems to complement a definition quoted above: Independent developers receive support from players, and players were rewarded with “outside items” that they own. But if the objective is a “fair” society in the long term, would one of the ideals be to find a form of shared governance to evolve serenely?

Ethical questions are here stay

NFTs do not currently have any state regulations, so once again the codes and moral principles of each apply.

What is notable about the current model is that for the moment the priority is to strengthen each community by project to ensure the presence of players in the medium-long term.

We asked ourselves the question when we looked at how the NFT community is constituted in the first half of 2019. Some ethical questions arose when Enjin managed to stand out thanks to ultra-aggressive, growth-hack marketing to promote their project.

Let’s not forget that temptation can be quick and effective, except that unlike its big brother the “trading game”, there are new settings to take into account in the Play to Earn economy. In addition to do an evaluation of the project’s quality in which you are going to invest at least some time or even some money, you will have to evaluate the value of the goods you are going to acquire.

There are two initiatives gathering the different actors of the Non Fungible Token universe: The Non Fungible Alliance and the Blockchain Game Alliance. It might be worthwhile for it to be open to everyone so that everyone can choose our general policy freely, consciously and transparently. The rise of decentralized voting platforms like Agora propose interesting opportunities for the end-users to get heard.

Let’s not forget that there is no such thing as 0-risk, but with a good dose of pragmatism, it is always possible to reduce the risks associated with the use of the blockchain. And it is by pooling our dreams that it will be possible to create the ideal world in which we want this universe to evolve.

Inspiration sources:

• Arise of ethical questions
• Why it’s time to start talking about blockchain ethics