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Non-fungible abuse material – the “disaster situation” for NFTs

Non-fungible abuse material – the “disaster situation” for NFTs

The NFT space is rife with harmful and explicit content, which – as per the function of NFTs – can never be deleted. While Microsoft bans them, Meta embraces them.

Here’s what you need to know this week:

  • Affairs of state:  Non-fungible abuse material – the “disaster situation” for NFTs.

State-by-state:

  • Google pumped money into healthcare business, Verily
  • Apple’s iPhone release was blasted by Steve Jobs’ daughter
  • Microsoft faced criticism over Call of Duty monopoly
  • Meta fell behind in the hiring race
  • Amazon’s former CEO argued about Queen Elizabeth II
  • Tencent’s rival also made a big bet in healthcare

Affairs of state: Non-fungible Abuse Material

Non-fungible tokens of Donald Trump in front of a flaming Capitol have found their way onto the blockchain.  

Non-fungible abuse material. Other NFTs consisting of abusive, harmful and explicit content include images posted by a “Klu Klux Klan Enjoyer” and one titled “Trans rapes guy”, all on market-leading NFT trading platforms. 

The point of NFTs is to make internet content that cannot be deleted, so it was probably only a matter of time before alt-right conspiracists gravitated to the format. 

They’re now creating abusive material that can be bought and sold anonymously by anyone online and traded like trading cards, says Geoffrey Huntley, a programmer and influential critic of the online space that’s also used by cryptocurrencies. It is, he says, “the ultimate disaster situation”.

Last week, the WSJ reported that ex-CIA counterterrorism analysts and other senior US intelligence officials are concerned about the use of NFTs by terrorist groups. An NFT created by supporters of the Islamic State was found on the Rarible marketplace featuring IS’s emblem and a caption applauding the success of an attack carried out by the group in Afghanistan which left 21 people dead last month.

The US officials share a concern that NFTs – and the transacting of cryptocurrencies  – allow groups like Islamic State to subvert sanctions and access funding through untraceable and anonymous means. 

The BBC reported in 2019 that child abuse imagery and child-pornography had been uploaded to the Bitcoin blockchain as NFTs. 

Duty to report. Journalists often fail to grapple with the reality of the market, Huntley says, adding that given there are journalistic codes for talking about self-harm and suicide, “it feels like there needs to be something similar for talking about blockchain”.

The online world is rife with abuse material. Platforms such as YouTube, Instagram and Facebook face a constant challenge identifying and removing offensive content while implementing their terms of use or community guidelines. 

The difference with NFTs is that they cannot be deleted. Ever. 

What is an NFT? NFTs are links to images or other bits of information stored in a database that no central authority can edit or delete. The database is decentralised, meaning it’s stored across the devices of all the active users of the network rather than in one place on a hard drive or server. 

Why does that matter? The fact that blockchain content can’t be deleted is a dangerous feature of the internet age, especially when it comes to terrorist propaganda or so-called revenge porn.

Why don’t NFT platforms do something? They do. NFT platforms like OpenSea and Rarible can delete the part of their viewer websites that point to entries for NFTs that violate their terms of use – like deleting part of a contents page rather than the content itself. But that content can always be accessed and duplicated by anyone with access to the blockchain, i.e. everyone with a computer.

What does this mean for the tech states? Meta has embraced NFTs; Microsoft has rejected them. The others seem undecided, although Tencent was forced to close down its NFT marketplace earlier this year. Alongside the issue of non-fungible abuse material, there are concerns about the inherently volatile, exclusive and often fraudulent nature of digital collectibles. 

Microsoft. Xbox Game Studios, which is owned by Microsoft, has banned NFTs from Minecraft, the world’s most popular video game. The ban is rooted in concerns that “NFTs… can create models of scarcity and exclusion that conflict with our guidelines”.

Microsoft is aiming to limit what it calls “the speculative pricing and investment mentality” that NFTs encourage. The company has highlighted concerns about the pervasiveness of scams selling NFTs at fraudulently inflated prices.

Its founder, Bill Gates, has dismissed NFTs as “100 per cent based on the greater fool theory”, by which investors expect to resell overpriced assets to bigger idiots than themselves a part of a ponzi scheme. 

Meta. Instagram, which is owned by Meta, has continued to test and integrate NFTs, allowing users to link their wallets (unique storage for a user’s digital collectibles) to their accounts and use NFTs as profile photos. Earlier this year Mark Zuckerberg teased the continued integration of NFTs across Meta’s platforms, including the possibility of augmented-reality NFTs, shareable NFT stories and a new functionality to mint NFTs directly from Instagram. 

Instagram already faces well-documented problems with abuse material, and the prospect of making posts writable to a permanent, unalterable database is cause for concern. 

Meta might be boarding a sinking ship. The market for NFTs has flatlined recently. The number of transactions taking place on OpenSea – the world’s largest NFT and digital collectibles marketplace – has plummeted by 99 per cent since May this year. 

The platform has also lost most of its users, with the number of active wallets falling by 88 per cent. 

Rising interest rates, which make saving cash more attractive, have a big impact on riskier asset classes – and NFTs are among the most volatile out there. Yet that has not prevented “Web3” companies and venture capitalists promoting the market. They insist NFTs represent an eminently monetisable feature of the “metaverse”, and proponents expect the market to recover. 

Meta didn’t respond to our request for comment. 

Why this story? The future of the internet hangs in the balance. The place where most of us now find our news, academic papers and the opinions and statements of elected officials is shared with user-generated content of all kinds, including abuse material, pornography, automated trolling, misinformation and harrassment. By making things undeletable, NFTs sidestep a crucial part of the process of keeping this space safe. 


Google: Verily

Since the pandemic, big technology companies have accelerated their investment in healthcare. Verily, owned by Google’s parent company, is a life sciences research institute with a focus on “precision health”. It raised $1 billion last week to develop data-driven approaches to individual healthcare – never mind the controversy it and other healthcare technology companies caused during the pandemic because of suspicions that its collection of health data made the already massive data collection effort at Google overly intrusive. To use Verily’s full Covid screening service, for instance, you had to have a Google account.


Apple: Bad Job

Bad press, website glitches and a sense of sameness have marred Apple’s iPhone14 release. Ming-Chi Kuo, an analyst at TF International Securities, reckons sales of the iPhone14 standard models are “bad”. Apple experienced website problems during the launch event for the new device, and some customers reported seeing error messages when trying to view the iPhone14 pages. Perhaps worst of all, Lisa Brennan-Jobs – Steve Jobs’ daughter –  shared a meme calling out the fact that the new iPhone looks exactly like the last one. She has since deleted it. 


Microsoft: Call of Duty

Sony has accused Microsoft of misleading regulators over its plans to keep Call of Duty on Playstation consoles. Following its planned acquisition of Activision Blizzard, Microsoft will have control over the Call of Duty video game franchise, one of the most popular in the world. Sony, which owns Playstation and is a major rival to Microsoft’s Xbox console, claims its commitment to keep Call of Duty available on Playstation has been misrepresented to regulators and might influence regulatory scrutiny of the deal, which at $68.7 billion is the biggest in industry history. In simple terms: Sony is arguing that Microsoft will use Call of Duty as an exclusive draw to persuade players to choose Xbox over its Playstation. Microsoft says its commitment to keep Call of Duty available on equal terms across Xbox and Playstation for three years is sufficient to assuage concerns. Meta, of all companies, have come to Microsoft’s defence.


Meta: Hiring race

Meta is being overtaken by Apple in the race to hire advertising and augmented reality engineers. The number of open job listings under augmented-reality (AR) and advertising ads shows that Apple has more vacancies than Meta, with 34 per cent more openings in advertising and 16 per cent more in AR. The study, reported by The Hustle, comes as Meta announces plans to slash its hiring of engineers by 30 per cent this year as a means of bracing for economic headwinds. 


Amazon: Elizabeth II

The death of Queen Elizabeth II has prompted reactions all over the world. Jeff Bezos, the former Amazon CEO, got embroiled in a Twitter dispute with the Carnegie Mellon University associate professor Uju Anya over comments that the academic made about the Queen. Anya wrote: “I heard the chief monarch of a thieving raping genocidal empire is finally dying. May her pain be excruciating.” The now-deleted Tweet prompted Bezos to reply: “This is someone supposedly working to make the world better? I don’t think so. Wow.” Anya also wrote of the Queen that “she supervised a government that sponsored the genocide my parents and siblings survived. May she die in agony.” Carnegie Mellon has not yet said whether Anya will face disciplinary action for her statements. They do demonstrate that – as Kehinde Andrews, professor of Black studies at Birmingham City University – writes, the monarch will be mourned and memorialised very differently in different parts of the world.


Tencent: Healthcare rivalry

China’s internet companies, like Google, are pushing into healthcare. Tencent has experimented with medical clinics, and its multi-purpose app, Weixin, can be used to book medical appointments and receive online diagnostics. Its rival, ByteDance, is committing to bricks-and-mortar healthcare provision through its $1.5 billion acquisition of Amcare Healthcare. Amcare is a private hospital in China which offers “upscale obstetrics for postpartum patients” –  expensive care for mothers and their new babies. Like their US-based counterparts Amazon, Alphabet and Apple, Chinese internet companies are looking for inroads into the healthcare market.  ByteDance’s acquisition is among the largest made by a Chinese technology company since regulation of the sector became more strict in 2020.

Thanks for reading,

Luke Gbedemah
@LukeGbedemah

Sebastian Hervas-Jones