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Buddhistdoor View: The Rise of Non-Fungible Tokens

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From msnbc.com

Most Buddhists are familiar with the Lotus Sutra’s parable of the burning house. In the story, a wealthy and strong man returns to his home one day to discover that it is on fire. Seeing this, he rushes into the house to rescue his three sons. He thinks about carrying them out but realizes he could not fit through his house’s narrow gate with all of them. Next, he tries explaining the situation to them, but they are too engrossed in their toys and games to listen. So he demands that they leave. But they do not listen. Finally, he promises each a beautiful and rare toy, which catches their attention and they dash from the house. Once outside, the promised toys are missing but instead there is a beautiful cart covered in jewels and drawn by a pure white ox.

The Buddha tells us that the man is like the Awakened One who teaches the various vehicles to entice, attract, and guide many living beings. In the end, however, there is just one “Great Vehicle” for all of us.

The story offers itself to many layers of interpretation. On one reading, it says that the wise might seemingly deceive ordinary, foolish beings to encourage them to do what is for their own good. Another reading says that the Great Vehicle (Mahayana) is the only vehicle in the end, while those other teachings are just skillful means (upaya) to guide as many people as possible to this one vehicle.

With either of these interpretations, we see that there are deeper senses—or perhaps clearer visions—of reality than what most of us as ordinary humans can see. Awakened beings are those who see the many layers of reality and can use that vision to help guide us to our own full understanding.

In the age of the internet, digital media, and cryptocurrency, we might wonder whether we are moving toward a deeper and clearer understanding of reality or toward increasingly complex toys that merely distract us from the fire around us. Entering into this is the latest iteration of digital reality: the non-fungible token (NFT). What exactly is an NFT?

An NFT is a digital asset that exists on a blockchain, a record of transactions kept on networked computers. The blockchain serves as a public ledger, allowing anyone to verify the NFT’s authenticity and who owns it.

(Reuters)
“Machine Hallucinations – Space: Metaverse” by media artist Refik Anadol. Later turned into and NFT and sold at auction in Hong Kong. From reuters.com

An NFT is thus a one-of-a-kind digital item. It cannot be replicated like other digital items. Its unique nature relies on the blockchain—which is also where cryptocurrency transactions are stored—to record its creation and ownership. The promise of NFTs seem to lie most immediately in the art world, where artists can create digital works and sell them as an NFT. While people can copy the piece of art—just as easily as one can download and share a picture from this website or others or buy a very realistic print of a Van Gough or Monet painting—the NFT ensures that the purchaser holds ownership of the work itself. According to enthusiasts, NFTs are how ownership will be established in the future.

First created in 2017, NFTs have taken off in 2021, with estimated sales of US$10.7 billion in the third quarter of this year, up eightfold from the second quarter. This success follows largely on the heels of cryptocurrencies such as Bitcoin, which was first released in 2009 and has reached a value of approximately US$60,000 per coin as of this writing.

Since NFTs and cryptocurrencies rely on the same technology, they are subject to many of the same concerns. One of those is the energy required to create and maintain ledgers of ownership. A recent article in The New York Times showed that Bitcoin alone uses as much electricity each year as Finland, or around seven times as much electricity as all of Google’s global operations.

NFTs run on the Etherium blockchain, which is less energy-intensive than Bitcoin’s, but still costly. In February, the French artist Joanie Lemercier canceled the release of several works after discovering the environmental costs. “My release of six CryptoArt works,” Lemercier wrote on his website, “consumed in 10 seconds more electricity than [my] entire studio over the past two years.” (Frontier Group)

From cryptoslate.com

Advocates point to technology upgrades that could dramatically reduce the carbon footprint of NFTs. The UK-based Renewable Energy Hub suggests that young people are increasingly concerned with the energy they consume, and this demographic is also the most important for emerging NFT markets. As such, they encourage miners—the people whose computers create and manipulate the blockchain for each NFT—to adopt renewable energy for their own good, “Miners must adopt renewable energy and sustainability features for financial success. Over time, their influence can bring carbon-neutrality to the NFT industry.” (The Renewable Energy Hub)

But for now, caution is warranted. Buddhists interested in NFTs, like cryptocurrencies, must ask themselves what their motivations are. Are they seen as shiny new toys, worthy of infatuation and distraction from one’s practice, study, and veneration of Buddhist teachers? Or do they instead offer a realistic way of cutting through literal material bonds and limitations imposed by national borders and fiat currencies?

In our ever-more cosmopolitan and interconnected world, where friends, family members, and colleagues are often more accessible by screens and WiFi than ever, it makes sense that our understanding of money and ownership should shift too. And just as early solar energy panels were expensive, requiring vast amounts of raw materials for the small amount of energy they produced, it is possible that cryptocurrencies and NFTs will evolve into eco-friendly and broadly accessible alternatives to current standards.

A second consideration, however, is that of renunciation. For many people today of above average wealth and material comfort, the next step might not be buying into a new digital world—or adding solar panels and an electric car—but rather simply cutting back their use of what they already have. This virtue of renunciation should be enough to at least keep us away from the fancy new developments long enough to allow others to make the questionable leap into the unknown. Having fewer bonds of ownership, whether fungible or non-fungible, can be liberating on its own.

See more

Explainer: What are NFTs? (Reuters)
Bitcoin Uses More Electricity Than Many Countries. How Is That Possible? (The New York Times)
How Much Energy Do NFTs Take Up? (The Renewable Energy Hub)
NFTs: The hot new fad with a massive environmental cost (Frontier Group)

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