Faculty Sponsor

Matthew Puffer

College

Christ College

Discipline(s)

Business, Ethics

Presentation Type

Oral Presentation

Symposium Date

Spring 4-28-2022

Abstract

NFTs have complex direct and indirect consequences on the modern economy, making the average, rational individual’s use of them prone to higher risk. Just as professional, educational, and social institutions progressed through the COVID-19 pandemic using technological tools such as Zoom and Microsoft Teams, the world’s economy has also become more intertwined with technology than ever before. Non-fungible tokens (NFTs), through Web 3.0, have played a major part in this intermingling of public markets and technology. On a surface level, NFTs can seem like a trend or Ponzi scheme put forth by the young “influencers” of social media. Additionally, the deeper technical and social implications make NFTs a more complex option than traditional investments, potentially putting the average individual at a disadvantage in a modern market full of new financial sharks. So, what are the direct and indirect effects of NFTs on individual investors in the modern economy? While many see the economy as strictly related to stocks, the modern economy is broad, in which individuals make decisions based on financial, social, and ethical implications. NFTs play into these factors, resulting in effects such as pricing changes based on social trends in addition to news in the press, in the way that traditional stocks are impacted. This fluctuation and instability can result in an unwillingness for lenders to grant loans based on holdings in NFTs or cryptocurrencies. That volatility calls the intrinsic worth of an NFT into question. Despite these issues, digital capital like NFTs and cryptocurrency do provide opportunities to invest with a low barrier to entry. Concerns of environmental ethics are diminishing as crypto is fully mined and companies become carbon neutral. This multitude of factors and issues results in a market situation that is incredibly difficult to predict. Here, we conclude that while NFTs pose considerable risks to investors, the opportunities and new possibilities suggested by a growing cryptocurrency market suggest that cryptocurrency is not just a fad or a bubble: it’s here to stay, and will have lasting impact on markets.

Biographical Information about Author(s)

Patrick is a business major, while Ian and Franco are both in engineering. The group grew interested in NFTs and cryptocurrency due to their recent social media popularity, in addition to discussion of environmental justice in their Science, Technology, and Society class in Christ College with Professor Matthew Puffer. Curiosity formed from the group's desire to learn more about what crypto and NFTs really are, and what they may be able to do, despite the negative social and possible environmental implications.

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