This is an exciting announcement that brings with it a lot of new opportunity for you to expand your digital portfolio and also diversify your investments. I hope this will be a positive advancement for the NFT space.
But buyer beware. There are ironies and warnings signs all over this announcement. As I’ve been predicting all along, the dream of decentralization is going to be crushed by the very people who believe in it most. They won’t be able to help themselves.
What do I mean by that? Keep reading.
First, The Fun Exciting Awesome Announcement
Coinbase is a brokerage platform that allows you to buy, trade and sell crypto. One of the more popular crypto coins is called Ethereum. What makes Ethereum special is that the protocol allows for other applications to connect with it. This makes it a much more dynamic and flexible form of digital currency.
As such, you can use Ethereum (and other coins) to buy digital tokens on the blockchain. These digital tokens are called NFTs. (I’m sure you’ve heard all this before, but if you haven’t please read this guide I wrote to help you understand.)
Most of the NFT market has been transacted on a trading platform called Opensea. Opensea allows you to connect your crypto wallet and make purchases through the platform. It’s also a space where artists can “mint” their NFTs and get them in front of buyers. So far, Opensea has ben the dominant player in the NFT space.
But maybe not for long.
On Wednesday, Coinbase announced that it will be launching it’s own marketplace for users to buy, sell and trade NFTs.
I believe this will throw gasoline on the NFT market. More buyers will get in the game, more artists will create and mint digital artwork, and more speculation will be formed around NFTs as an asset and a potential storage of wealth. I hope this will be a positive advancement for the world of NFTs and the possibilities they behold.
The Irony of Decentralization Continues to Amuse Me
Crypto maxis love to talk about decentralization. They love to talk about how institutions have failed us, and how the government is corrupt, and how decentralized protocols solve the problems of society.
But over time, these ideas and platforms build on decentralization are becoming more centralized. (Read that again)
For instance, the Coinbase platform is going to have the UX of a social timeline. Each person’s feed is going to be “customized” by what their particular interests are. It will follow the same rules as current social media platforms. Algorithms based on user behavior will determine what content gets put in front of who.
Buying and selling will be core features of Coinbase NFT. We’ll have a vibrant, secure marketplace. But we believe we can do much more. We’re designing for social engagement. By fostering connections, Coinbase NFT will help creators, collectors, and fans build community. Based on your interests we’ll curate your personal feed. Your profile will showcase all your NFTs in one place, helping you connect with like-minded fans or artists. The social element shapes the future by sharing passions, birthing new collaborations, and firing up the imagination.
There is a an ever growing outcry against networked social media platforms. We are seeing how networks effects can put a strangle hold on data on the flow of information. Because of this, crypto advocates have been calling for decentralized social media, where no one person is in charge. Yet in the same breathe, they cheer in excitement over a public company building them a new shiny social media platform that offers them a new toy.
Am I the only one recognizing these dangers?
Either You Die a Hero, or Live Long Enough to Become the Villain
Web3 makes me feel excited, confused, bullish and bearish at the same time. Obviously, I believe that web3 will change the world. There’s no stopping it. But I also wonder how much of Web3 is a giant hype cycle being used as a way to inflate the value of useless assets. How much of crypto (and NFTs) is another way to take money from the bottom 99% and funnel it to the top 1%?
I would bet that NFTs playout like most other tools of wealth allocation. The top 1% will hoard all of the wealth, while the bottom 99% end up in the negative and that loss is probably exacerbate by gas fees, transaction fees, and mistakes. Wealth gives
I hope I’m wrong, but I see Coinbase NFTs as a continuation of the norm. It’s another form of Robinhood. One company will create a network that will completely own the distribution channels of our information and the network effects baked into these social platforms will create a monster.
Coinbase is our hero now, but given a long enough timeline, it’s a certainly that it will become an enemy.