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NFTs: Hype, mainstream growth - & implications
Marietje Schaake, International Policy Director at Stanford's Cyber Policy Center, Eurasia Group senior advisor and former MEP, discusses trends in big tech, privacy protection and cyberspace:
How wild is the NFT art world? And are there any loopholes behind the trend?
Well, to start with for me, the prices are insanely wild. It looked like a small circle of already wealthy fans are enjoying this new type of speculation. And while I love art, I think there's a world of difference between the Bored Apes and Van Gogh. And I have not quite discovered any appealing cutting-edge creativity in the NFT space. And meanwhile, the loophole are many, there is unauthorized use of images for NFTs, but also risks of money laundering and inflating prices artificially. And the whole hype reminds me a bit of Tulip mania, when in the Netherlands between 1634 and 1637, bulbs were sold for as much as 10 times the annual salary of a skilled artisan.
How will NFTs reshape our ways of living?
Well, since there's so much money exchanging hands, it's understandable that people want in on it. We see social media platforms accommodating NFT sales and their use. For example, Twitter offering the option of an NFT as an avatar, and venture capital investors are jumping on the bandwagon. Nike now looks to offer the sale of virtual shoes in the metaverse, and Bored Ape characters are expected to feature in the Super Bowl halftime show next week. So, it looks like NFTs are going more mainstream, but there's also question of regulation. They are currently not considered as securities in the US and I'm sure that regulators will be catching up to avoid some of the harms from this unregulated market. So ultimately regulation is also going to be very defining in the future of these investments.
How political sports boycotts (really) work
In recent days, America's pastime has become deeply embroiled in America's politics. US Major League Baseball pulled its annual All-Star Game (an annual friendly matchup of the sport's best players at every position) out of Atlanta to protest the Georgia state legislature's recent passage of restrictive new voting laws.
Just a week into baseball season, the move is a big deal in the US. But more broadly, it's the latest in a series of increasingly high-stakes sports decisions around the world that have a lot to do with politics.
China under the spotlight. Human right groups outraged by China's genocide in Xinjiang are putting pressure on Western governments and corporate sponsors to withdraw from the 2022 Winter Olympics in Beijing. At the same time, Chinese sports fans have turned on Nike — which makes the kits for China's national football and basketball teams — for expressing "concern" over allegations of forced labor in Xinjiang's cotton industry.
Meanwhile, European football (soccer) players have defied a FIFA ban on political statements in order to join a growing chorus of protest over the rampant mistreatment of migrant workers in Qatar, which is set to host the 2022 FIFA World Cup. (Some 6,500 migrant laborers building the stadiums have died in the decade since the gas-rich Gulf kingdom was awarded the tournament under fishy circumstances.)
But what these boycotts actually intend to achieve is probably not what you think. All of these major sports events — watched by hundreds of millions of fans across the world and which draw in billions of dollars from corporate sponsorships — will surely take place as scheduled.
The odds of Georgia expanding voting rights for minorities to get back the All-Star Game in Atlanta are as slim as those of China admitting it holds Uighurs in mass internment camps and uses them as modern-day slaves to pick cotton to ensure all nations attend the Olympics. Interestingly, Qatar caved somewhat by promising long-overdue reforms to improve the conditions of migrant workers.
That's because sports boycotts are not usually designed to reverse the policies they are opposing. But they can be quite effective in achieving other outcomes.
First, their unique combination of cultural and economic power make sports an outsize arena for political disputes to play out.
The MLB's decision to drop Atlanta is less about weighing on the latest US political culture war than taking a stand on not further restricting voting rights, which most Americans support. It also follows the tournament organizer's own efforts in recent years to attract younger, more racially diverse fans.
Second, boycotts raise the cost of pursuing certain policies. While the specter of Western countries pulling out of Beijing 2022 may not be enough for China to reverse course on Xinjiang, a mass withdrawal of corporate sponsors could lead Beijing to lose billions of dollars in revenue from the games.
However, the domestic boycott against Nike is being led by Chinese celebrities and consumers who want the American brand to stop talking about the Uighurs. This puts Nike into an impossible position in China: on the one hand it risks a backlash from its Western clients if it doesn't speak out (which is what the NBA did when it kowtowed to China regarding Hong Kong's democracy protests in 2019), and on the other hand it can lose a lot of business in China if it does.
To further complicate things, China is also in a tough spot: stoking nationalist sentiments by unilaterally terminating these agreements would be immensely expensive. And all of this is going to get worse as US-China relations continue to deteriorate.
Third, boycotts are a great way to draw wider attention to problems that boycotts alone won't solve.
In the 1960s, bans on white-only sports teams in international tournaments, including the Olympics, helped rally public opinion against the apartheid regime in South Africa. Today, with many sports superstars among the world's top influencers on social media, it's a lot easier for them to raise awareness about any issue, and reach a wider audience.
But wading into political minefields in the current highly polarized environment can also be immensely risky for athletes, sports leagues and governments if they make the wrong call. Just ask Colin Kaepernick.
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