HYBE NFT venture causes frustration among ARMY
On Nov. 3, 2021, during their live streamed community briefing, Bang Si-Hyuk revealed that HYBE had partnered with Dunamu to begin a new NFT-based business venture. According to Bang Si-Hyuk, this “will allow the artist IP-based content and products that HYBE has showcased to date to become digital assets for fans.”
However, this decision was not met with overwhelming enthusiasm — in fact, just the opposite. In their write-up on the situation, Mashable pulls a selection of tweets from ARMYs, none of which are in support of the idea.
But why are ARMYs so upset about the idea of NFTs?
First, let’s talk about what NFTs are
Disclaimer: the NFT concept is deceptively simple. In a way, it’s like an iceberg — the basic definition seems easy to understand, but as you look into it further, it starts to make less and less sense.
“NFT” stands for “non-fungible token.” This in and of itself doesn’t really make things any clearer. So let’s break it down. “Fungible” means that the currency or commodity is essentially interchangeable. Merriam-Webster uses oil, wheat, and lumber as examples of fungible commodities. You can replace a sheaf of wheat with another identical sheaf of wheat and there’s basically no difference. One US dollar is the same as another US dollar.
Therefore, a non-fungible token is something that doesn’t have an identical counterpart. The Verge uses trading cards as an example: if you have a unique, one-of-a-kind trading card and you trade it for a different one-of-a-kind trading card, you’ll have something entirely different than what you started with.
NFTs are in the cryptocurrency family; they’re all digital and can take the form of a whole host of different things — art, music, and tweets (yes, this is a thing: according to CNN, Jack Dorsey sold a tweet for $2.9 million) are a few examples.
The main conversation has seemed to focus on selling digital art, according to The Verge. People are creating digital art and selling the originals as NFTs. Apparently, by some, this is viewed “as an evolution of fine art collecting, only with digital art,” The Verge says in their article explaining NFTs. In some ways, the comparison is valid: many famous works of art get made into prints, which you can easily purchase for an affordable price and hang up in your house. But they aren’t the original piece, and original art pieces often sell for millions of dollars.
For digital art, however, this issue is somewhat murky. As The Verge explains, and every internet user knows, you can right click and copy an image as many times as you want. Forbes also adds that a portion of the things being sold as NFTs have existed on the internet already for some time. One example that CNN lists is an iconic clip of a LeBron James slam dunk, which sold for over $200,000.
The argument seems to boil down to this: you could make a copy, sure, but you could also own an original, and that seems to be affecting the judgment of a lot of people.
How is this HYBE partnership going to work?
According to TechCrunch, the partnership between HYBE and Dunamu involves the exchange of stocks. HYBE will buy a 2.5% stake of Dunamu stocks, and in turn Dunamu will acquire a 5.6% stake in HYBE stocks.
Dunamu is a “blockchain-based fintech startup that runs the cryptocurrency exchange Upbit,” TechCrunch says. Upbit is a specifically Korean-based cryptocurrency exchange, so it might be unfamiliar to Western-based audiences. Dunamu will then be helping HYBE manage and/or create their NFTs and their exchange. If you need an explanation of how cryptocurrencies work, or just a refresher, take a look at our cryptocurrency breakdown from earlier this year.
One thing that is worth noting: the TechCrunch article is headlined “BTS enters NFT market in joint venture with Upbit.” However, as this article itself and many others state, it is not in fact BTS themselves that are participating in this project, at least at this time. HYBE, the parent company to Big Hit, is the one entering the venture, not specifically BTS. This distinction is a key point, which we’ll circle back to later. For now, the most important thing is that the headline was clearly intended either as clickbait or to incite a reaction of some type. Since one of the founding tenets of “Check Yourself: Facts” is constructive criticism and analysis of the media, it seemed worth it to point out that the TechCrunch headline is distinctly misleading.
During the community briefing, Bang stated that existing products would become digital assets for fans, listing photocards as examples. Every fan who owns a physical BTS album knows about photocards, since one or two of these little trading cards are included in every album, and it’s not uncommon to see ARMYs taking to Twitter to share which photocards they received with their newly-opened albums.
With the new NFT project, Bang explains that they are looking to “create a way to expand the fan experience more diversely and securely, such as digitally authenticating the uniqueness of these photo cards and making them permanent, but also allowing them to be collected, exchanged, and displayed in a global fan community platform like WEVERSE.”
From this explanation, it seems like in addition to the printed cards that are contained in physical albums, ARMYs would be able to acquire individual, permanent digital photocards and then exchange them with other ARMYs and build a collection. Bang also implies that the future of this NFT venture would expand to include photocards which featured moving images or audio.
However, while it doesn’t specifically state that these “digital photocards” would need to be purchased, it’s clearly going to be necessary — they wouldn’t be part of a partnership with a cryptocurrency company if it wasn’t. So, ARMYs are going to have to engage in cryptocurrency, which is a divisive topic in and of itself (as also explained in our cryptocurrency article from February), and then on top of that, it will also likely mean that the NFTs will have large price tags. If people are willing to pay hundreds of thousands of dollars for NFTs created from things that already existed, like that LeBron James clip, what might people pay for entirely unique items? ARMY has already proved its purchasing power time and time again, and this project of HYBE’s does beg the question: are they doing this because they have seen what ARMY is capable of?
This possibility hasn’t escaped some ARMYs, as you can see from the selection of tweets pulled together in this NME article, with some going so far as to call HYBE “money hungry” and stating that they are using BTS for their own benefit — for corporate gains. ARMYs trended two hashtags following the announcement, #BoycottHybeNFT and #ARMYsAgainstNFT, to demonstrate their outrage at the upcoming project, and have cancelled orders for products in protest.
However, the idea that ARMYs are being exploited for financial gain isn’t even the foremost complaint about the upcoming venture. Instead, most ARMYs are concerned about something else entirely: the environment.
Crypto against the environment
In fact, most of the tweets that have been aggregated in articles about the situation have been expressing intense displeasure at HYBE’s decision on the grounds that cryptocurrency is bad for the environment (check out the Mashable and NME articles linked for some examples); only a few have been in our own defense against possible exploitation.
But why is crypto considered bad for the environment? What impact could it possibly have?
Quite a lot, actually.
The New Yorker and Investopedia provide some context for us. The main problem is not the cryptocurrencies or the NFTs themselves, but rather the specific cryptocurrencies that use what’s called “mining.” According to Investopedia’s writeup, bitcoin mining is the process by which new bitcoins are entered into circulation (without putting any money into it up front) and uses “sophisticated hardware that solves an extremely complex computational math problem.” So, you need a special computer (or many computers) to create a mining rig, which is costly, and apparently hit-or-miss: “The first computer to find the solution to the problem is awarded the next block of bitcoins and the process begins again,” Investopedia says. You might buy all these things, and the coins might go to someone else, therefore you don’t even get the reward.
As The New Yorker reports, the Cambridge Bitcoin Electricity Consumption Index states that worldwide bitcoin mining operations currently use energy at the rate of 120 terawatt hours per year. For perspective, this is the same amount of energy consumption as the entire country of Sweden. “According to the Web site Digiconomist, a single bitcoin transaction uses the same amount of power that the average American household consumes in a month, and is responsible for roughly a million times more carbon emissions than a single Visa transaction,” The New Yorker states.
It is worth noting, however, that not all cryptocurrencies use mining, according to Investopedia, and thereby would not have the same environmental impacts. Our research could not uncover whether or not Upbit uses cryptocurrency mining in its processes.
Given the potentially catastrophic environmental impact of cryptocurrency, it makes perfect sense that ARMY wouldn’t want to support this venture. Many ARMYs are calling out the hypocrisy of the behavior on HYBE’s part (see the Mashable article for a decent selection of tweets demonstrating this fact), since BTS themselves have spoken out about the importance of climate change — most recently in their UN speech as part of the SDG Moment, which is specifically geared towards talking about the impacts of climate change — and ARMY has participated in several projects to do our part to help, planting forests and adopting endangered animals in BTS’ name.
Now, however, we must circle back to the key point that we mentioned before: how HYBE and BTS are not the same thing. The Mashable article, which inspired this installment of “Check Yourself: Facts,” has one glaring problem in its conclusion.
They state: “BTS’ Army of fans seem to have decided the K-pop group wouldn't want anything to do with NFTs, and are condemning HYBE's venture in support of the company's artists. Yet even aside from BTS’ assumed opinions, as reasonable as they may be, many fans have also expressed their own personal and justifiable misgivings concerning NFTs.” (Note: the misspelling of ARMY exists in the original article and was left in this piece for consistency.)
Not a single one of the tweets that Mashable aggregated to demonstrate their point actually states an opinion and paints it as ARMY assuming BTS’ opinions. Instead, these tweets acknowledge that HYBE is the one making the choices, and almost all of them wish that HYBE wouldn’t be involved in this because it is in direct contradiction to what BTS stands for. Several of them also state ARMY-based frustrations. Mashable’s choice to specifically state that ARMY has made decisions for the group and assumes that we know their opinions does not seem supported by the sources that they provided.
The entire section seems to contradict itself, which then presents an agenda (somewhat negative towards ARMY, in that it is generally perceived as a bad thing to assume that you “know” the group’s mind) and then backpedals. Clearly, ARMY is able to determine the difference between what opinions belong to BTS (as indicated in their UN speech) and which opinions belong to ARMY. Why does it remain so difficult for the media to just let ARMY have their voice without trying to put a spin on it? They know it’s there and visibly acknowledge it, so why must they put a qualifier on it?
In conclusion
The NFT situation is remarkably complex, especially in this case where it involves issues and people that we, ARMY, care about. NFTs are involved in cryptocurrency, and some cryptocurrencies are known to be bad for the environment. NFTs also tend to be part of the Ethereum blockchain, which is known to engage in some unsafe environmental practices, but HYBE hasn’t announced which blockchain they’ll be using for their NFT venture, only that they’re working with Dunamu and Upbit. Perhaps they will involve themselves with a cryptocurrency blockchain that won’t use mining practices unsafe for the environment, but at this stage, the lack of concrete information has given rise to protests.
BTS has clearly stated their opinions on climate change and the environment, and ARMY has worked to uphold these same views. Not wanting to participate in something that goes against these beliefs and values is a completely valid protest, and it is the right of ARMY to withhold their support of a venture, which so clearly doesn’t match up. While it seems that the partnership with Dunamu is well underway, and we’re unlikely to be able to reverse the process, we can still hope that HYBE will take fans’ views into consideration and at the very least not harm the environment in respect of their artists’ values and their fans’ aligned views.
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Written By: Anna Moon
Edit By: Vera
Checked By: Esma