In 2021, the world watched Beeple sell a JPEG for $69 million. It felt like a revolution, digital artists breaking free from galleries, collectors chasing pixelated apes, and teenagers flipping cartoons into Lambos. But somewhere beneath the hype, a darker reality was quietly unfolding. As someone deeply involved in the NFT community, especially in platforms like OpenSea, Magic Eden and Pentas, I couldn’t ignore what was happening. I decided to dig deeper for my pre-university assignment but what I found turned into something more than academic, it became a reflection of the social dilemmas we’re too quick to scroll past.
The Price of Anonymity. Web3 champions a kind of freedom that Web2 could only dream of. No gatekeepers, no censorship. Just code and creativity. For many, anonymity is liberation, it means a digital artist no longer needs a fancy gallery to be recognised. But this very same cloak is now being worn by scammers and money launderers.
People call it “undoxxed.” It sounds edgy. Cool, even. In the Web3 world, being undoxxed means no names, no faces, no paperworks to just wallets, handles, and avatars. It’s a rebellion against surveillance, discrimination, and control. For many, that anonymity is liberating. But what if the person behind that cute anime PFP isn’t just an artist or collector, but a scammer? What if they’re orchestrating a scam worth millions while hiding behind a Discord username?
That’s not just paranoia. It’s the reality of wash trading, a tactic where someone sells their NFT to themselves, again and again, using multiple wallets to create fake transaction history. It makes the NFT appear valuable, active, and in-demand when in truth, it’s a digital ghost town. These false signals trick others into buying in, chasing hype that was never real to begin with. It’s market manipulation disguised as momentum.
And it doesn’t stop there.
That same tactic becomes a perfect smokescreen for money laundering. Imagine turning illicit funds into “art,” then cycling it through wallet after wallet until it’s squeaky clean, and nearly untraceable. No banks. No IDs. No questions. Just blockchain transactions that look like innocent trades between collectors. It’s the digital equivalent of running dirty cash through a high-end art gallery. Only this time, there are no gallery owners to ask questions. Just code.
Let’s be clear: this isn’t innovation. It’s exploitation. And while the tech community likes to say “code is law,” real people are getting burned, artists robbed of royalties, buyers scammed out of savings, and communities losing trust. When we glorify anonymity without accountability, we build a system where fraud isn’t a bug, it’s a feature. For over a decade, Bitcoin has also been seen as a medium of exchange for criminals particularly in the black market, some would argue, but this requires another writing.
The Trade-Off No One Talks About. Decentralisation has a cost. In our case, it’s the absence of regulation. And while freedom is great, it also leaves victims behind. We’re seeing communities lose trust. Friends getting scammed. Projects rug-pulled overnight. Yes, we can implement Know Your Customer (KYC) policies. We can regulate. But here’s the twist, doing that takes away the very essence of blockchain. We hand over power to centralised entities, the same ones we were trying to escape.
So which do we value more? Privacy or accountability?
The most powerful weapon against crime in NFTs isn’t law. It’s us. We’ve seen how influencers and blockchain sleuths have taken to Discord and Twitter to expose rugpulls. We’ve seen community-based vetting, wallets flagged as suspicious, and NFT flippers educating others before apeing into hyped projects. It’s not perfect, but it’s grassroots. And it’s real. Still, this can be exploited. FUD (fear, uncertainty, doubt) campaigns can destroy honest projects. Misinformation spreads faster than facts. And not everyone has the time or tech know-how to verify blockchain transactions.
So, what now? Let’s be honest, the hype has cooled off. The days of flipping pixel art for five figures are mostly behind us. Media coverage has moved on, and the average person might think NFTs were just a passing phase. But here’s the twist, NFTs didn’t disappear, they evolved. Today, corporations are quietly embedding NFT technology into loyalty programs, ticketing systems, digital identity, and intellectual property management. Companies like Nike, Starbucks, and even governments have and are exploring NFTs not as flashy collectibles, but as efficient tools for ownership and access. So no, NFTs aren’t going anywhere. But their role is shifting, from hype-fueled assets to invisible infrastructure. And as that happens, the social consequences become even more critical, because what was once niche and optional could soon become standard and unavoidable.
Whether for art, identity, or ownership, they’re here to stay. But the social consequences of how we use them, those are up to us.
If we want the NFT space to be more than just a playground for pump-and-dump schemes, we need to face these trade-offs head-on. We must talk about the uncomfortable stuff. Not just the money.
But the trust. The ethics. The people.
This isn’t just about technology anymore.
It’s about responsibility.
Photo Credit
Beeple’s NFT collection. Business Insider
