Will Gen-Z Ever Come Around to NFTs?

Ben Cheskis
May 12, 2022

Lessons From An Internet Life

With an endless sea of content comes endless competition. Trying to stand out, companies have gotten in the habit of promising more than they can deliver, and those of us who are internet veterans are weary. High profile video games promise too much and then underwhelm fans on release. Apple sells a new phone every year, and every year a new campaign explains that this phone will change smartphones forever. Countless financial apps promise to change your relationship with money altogether. The clickbait culture of Youtube has worked its way into advertising, and we’ve noticed.

Overpromising has made the internet the land of trends. Gen-Zs who have been online their whole lives are used to fads in nutrition, mobile gaming, banking, and countless other industries. Allie (23), a Gen-Z said, “It seems like things just become trends on social media and everyone buys them, but we know we don’t need them.” For companies selling new technology online, “need” is a popular concept. But for those of us that are used to this song and dance, being told that we need new tech makes us skeptical, especially when it’s something we weren't expecting or particularly hoping for.

The Holy Grail For Humans

When Silicon Valley gets excited about something new, it can turn into a feeding frenzy. Investors clamor to show how interested and focused they are on the new fascination in town. In the past couple of years, NFTs have become the bell of the ball. The champions of NFTs see it as a massive paradigm shift that will change culture at its core. Youtube’s favorite garage sale investor and billionaire Gary Vaynerchuk described NFTs as the “holy grail for humans” that “will be used for everything”. The Financial Times said they are “minting new paradigms for life and investment.” Once again, a new idea in tech is being sold on the internet as something that you need to invest in, unless you want to miss out on the next big thing.

It takes long term success for me to be convinced that any “big new thing” I hear about online is the real deal, and I’m not alone. According to a recent study from PC Mag, 82% of Gen-Zs consider NFTs to be “scams”, compared to just 51% of millennials. Even more importantly, only 4% of Zoomers have invested in NFTs to this point. One factor among many that drives this perspective is that Gen-Z doesn’t feel like they understand what NFTs actually are. A Gen-Z, Nickolas (22), asked, “If this is such an important thing, why is everyone being so vague about it? I don’t get what they (NFTs) actually do.”

For Gen-Z’s like Nickolas who don’t feel like they understand NFTs, a deeper dive into the space reveals that right now, most NFTs are pieces of art, and not particularly original ones. Most popular NFT projects have been inspired by the original success story in the scene, CryptoPunks. These projects usually consist of 10,000 original tokens, each minted on a blockchain and representing a different avatar-like piece of art. The avatars depicted in this art are often 16- or 32-bit and have shared visual characteristics that range in rarity. In the simplest sense, the rarity of your avatar’s characteristics determines the value of your NFT, and the goal of the game is to invest in something rare and flip it for a giant profit.

UTA Signs CryptoPunks, Meebits and Autoglyphs (Exclusive) – The Hollywood  Reporter

In January of this year, OpenSea, the largest marketplace for NFTs and NFT art, publicly estimated that about 80% of the NFTs minted using its free creation tool had been “plagiarized works, fake collections, and spam.” From September 2021 to January 2022, DeviantArt (an organization that scans blockchain activity) found 90,000 instances of fraud in their sweeps alone. Their COO, Moti Levy, says that NFTs are driving art theft on a “mind-blowing” scale.

The track record of the NFT space so far does little to quell the concerns of Gen-Zs who consider the technology a scam. But does that mean NFTs have no place in Gen-Z’s future? And what needs to change: our perception or NFTs?

A Faster Horse

Being a leading innovator in tech requires imagination. It’s difficult to give people what they really want, because they aren’t sure exactly what they want. Henry Ford is commonly thought to have said, “If I had asked people what they wanted, they would have said faster horses.” While this probably isn’t a real quote, it still highlights a challenge that innovators have always dealt with. We are often resistant to new tech that feels like it’s changing too much too quickly, but we always want something new. In talking about NFTs, another Gen-Z I spoke to, Mary (23), said, “How am I supposed to know what to make? I just know what doesn’t work”. So it’s left up to the creators of tech to find out what people really want that doesn’t exist yet. For Henry Ford, what people really wanted was to move faster, not to have faster horses. Hence the Model-T.

I first started hearing about NFTs in late 2020. As a new type of technology that was being called the “holy grail for humans”, myself and other Gen-Zs were skeptical. Sure, it would change the nature of contracts and the financial system and society as a whole, but what actually are NFTs? Are they really just digital art? The simple answer shows that NFTs may in fact be what we really want, but we just don’t know it yet.

If you already know what an NFT is, you can skip to the last section. If not, here’s what they are in 98 words. An NFT is data that’s stored individually on a blockchain. It doesn’t have to be art, or anything visual. It can be lyrics to a song, or a speech, or most importantly, a contract. Blockchain information can’t be altered without causing the rest of the chain to collapse, which is the appeal of NFTs that often gets lost. If a lease for an apartment was minted as an NFT, it would be digital, secure from alteration, and easily verifiable in all settings. As someone with a life of internet experience, that sounds like a future I can support.

China to Launch State-Backed NFT Platform - Top Crypto News -  marketfeed.news

Today’s Problem, Tomorrow’s Promise

It’s no secret that the world is always becoming more digital. As the trend continues, purchasing assets will increasingly be done online. These transactions need to be secure and easily verifiable, and blockchain technology offers the best of both worlds. Gen-Zs have learned to be cautious online and seek safety, which is why we’ve avoided NFTs so far. The irony is that NFTs may soon be the foundation of the backend security guarding our many purchases and agreements online. From that perspective, Gen-Zs may be the ideal group to champion NFT technology. It could ultimately give us the security we crave online.

Timeframes are always tricky, but don’t be surprised if Gen-Z sentiment toward NFTs shifts dramatically in the near future as the tech evolves. Our apartment leases could soon be done securely with NFTs. Our insurance contracts could soon be held and verified via an NFT. Maybe we’ll even come around on digital real estate that exists as NFTs, although I’m not so sure about that. It’s possible that NFTs become so common that they’re mundane, and at that point, they’ll be considered a scam no longer.

Pictures sourced:

Gary Vaynerchuk | CryptoPunks | NFTs in Blockchain