Instagram announces NFT integration test just as the market flops

Both Ethereum and Bitcoin values are down nearly 20 percent in the last week.

Instagram CEO Adam Mosseri testifies at a US Senate hearing in Washington, DC, on December 8, 2021. ...

Meta CEO Mark Zuckerberg confirmed in a post today that Instagram will begin testing NFTs on its platform. Select users will be able to post their NFTs and add a line above their post, where location data usually goes, disclosing the NFT’s creator. He says that similar features will come to Facebook and maybe other Meta apps and that Instagram will develop augmented reality NFTs that you can build in Meta’s AR Platform, Spark AR. Can’t imagine why I would want to be the sole owner of some skin-smoothing, blue hair filter, but hey, it seems that might be possible someday.

Meta’s NFT embrace isn’t a huge surprise — Zuck announced it at SXSW in March after Twitter rolled out hexagonal NFT profile pictures back in January — but the timing of this announcement is hilariously, mind-blowingly bad.

Ethereum has lost nearly 20 percent of its value in the last week.Coinbase

Cryptocurrency values have been plummeting for about a month. As of today, Bitcoin’s value has fallen to just half of its peak, and Ethereum just had one of its worst market drops. The Wall Street Journal proclaimed last week that “the NFT market is collapsing,” citing that the number of active wallets in the NFT market had fallen 88% from a high of 119,000 in November. Coinbase’s new NFT marketplace has barely completed 100 transactions since its launch last month. It’s almost as if NFTs are trendy speculative assets rather than stable sources of income, characterized by violent price swings, subject to the fluctuations of the broader market, and vulnerable to devastating attacks.

Bitcoin is down about the same amount as Ethereum.Coinbase

In a video update (it’s a self-proclaimed video app, after all), Instagram head Adam Mosseri said that using Instagram’s NFT features would be free and that Instagram knows that there’s “tension” between web3’s purported values of decentralization (despite having a small, dare we say central group of companies dominating the business) and Meta’s legacy: “We want to make sure that we work out how to embrace those tenets of distributed trust and distributed power, despite the fact that we are, yes, a centralized platform,” Mosseri said.

Instagram’s a-changing — With the huge push for videos, a shop tab where notifications used to be, and a default feed that shows you more algorithmically-generated content than before, it’s hardly a surprise that Instagram started testing a full-screen vertical feed — the app is a shameless TikTok knockoff that doesn’t care if nobody wants to watch its crappy videos.

Still an absurdly large energy suck — “We do think one of the unique opportunities we have is to make web3 technologies accessible to a much broader range of people,” said Mosseri, an executive of the quintessential Web 2.0 company.

He didn’t address the devastating environmental impact of NFTs that results from the energy-intensive proof-of-work consensus protocol used by top NFT cryptocurrencies such as Ethereum, which allows the nodes of the network to find consensus on all the information in the blockchain. Ethereum says it is switching to a lower energy proof-of-stake consensus protocol, but the switch is perpetually about six months away. It was slated for completion as far back as 2019 but has seen delay after delay ever since. Meanwhile, cryptocurrency transactions burn through more energy than many countries and are set up to require increasing power over time.

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