It’s only been a year since Meta CEO Mark Zuckerberg announced his plan to integrate NFTs into his company’s social media platforms Facebook and Instagram. Barely a year after its pilot, a spokesperson revealed that they are now scrapping the project.
The Meta “Digital Collectibles”
Just last year, Zuckerberg bared his plan to integrate NFTs on both Facebook and Instagram. A company spokesperson said that the integration of the “digital collectibles” could bring a lot of value to creators, and the social media giants could become an ideal marketplace for these types of digital content.
The initial plan was to allow users to mint, sell, and buy NFTs directly on the said platforms, making it easier for creators to monetize their works. Facebook and Instagram would take a cut of each transaction, similar to how it currently takes a slice of sales on its marketplace. This move was seen as a way for Meta to tap into the growing NFT market, which had already gained a lot of traction in the art and gaming industries.
The project was initially rolled out as a pilot on Instagram but based on a recent report, the company has already decided to give up on its plan. It appears that Meta has faced several challenges in developing its NFT strategy along the way.
Meta commerce and fintech lead Stephanie Kasriel let out a series of tweets earlier, which briefly explained the move of Meta. According to him, the company will halt its NFT project to focus on other ways to support creators, businesses, and people using its platforms.
More Factors at Play
Although Meta didn’t elaborate more on its decision, there are obviously many other factors at play that may have contributed to the premature end of its NFT projects. One of the main challenges was the regulatory uncertainty surrounding NFTs.
Governments around the world are still trying to figure out how to regulate or classify NFTs, and there is a risk that some NFT transactions could be deemed as securities or may be subject to heavy taxation. This uncertainty made it difficult for Meta to develop a clear roadmap for its NFT strategy.
Another challenge was the technical difficulties of integrating NFTs on Instagram. NFTs are based on blockchain technology, which is still relatively new and complex. Integrating Web3 technology into Instagram’s existing Web2 infrastructure would require a significant investment of time and resources, and there were concerns about the scalability and security of the platform.
Finally, there were growing concerns about the environmental impact of NFTs. NFTs are created using a process called “proof-of-work,” which requires a lot of computing power and energy. This has led to criticism that NFTs are environmentally unsustainable, and Meta may have been hesitant to associate itself with a technology that is seen as damaging to the environment.
Meta is no longer a stranger to the wrath of environmental groups. Even before the NFT projects, they have been vocal against how the various technologies employed by the company are consuming too much energy from the grid.
The NFT integration in social media platforms Facebook and Instagram certainly holds a lot of promise for creators and collectors alike. However, such an ambitious venture into Web3 entails a lot of funding and effort on the part of Meta. Since the company has been bleeding money as of late, it may not be a good time for it to engage in such types of projects yet.