Support road.cc

Like this site? Help us to make it better.

feature

The angry backlash against NFTs in cycling, and how Bike Club NFT is trying to turn the tide

When news of a virtual cycling club selling NFTs via cryptocurrency surfaced, some of the reaction was vicious. We spoke to founders of Bike Club NFT to get some answers about non-fungible tokens, and why it says it is doing things differently

When we first caught wind of Bike Club NFT, claiming to be 'the world’s first blockchain-based cycling club', we also noticed that the idea was met with a pretty scathing reaction from some corners of the cycling community. After the second wave of backlash we got a message from Bike Club, and thought it was time to put some questions to two of the founders: Tyler Benedict, also the founder of Bike Rumour, and Richard Mitchelson, the popular cycling artist also known as Rich Mitch.  

 

*Press play to listen to the interview, keep scrolling for bonus musings

A decentralised cycling club with members from all over the world, happily chatting away online about their shared love of all things bike… sounds great, right? Almost a little bit like the original concept of road.cc when we started out way back in 2008. It’s also what the founders of Bike Club NFT say they have started; however, it turns out if you add in the word ‘NFT’ and require members to buy in using the controversial cryptocurrency called Ether, you risk making at least half of cycling Twitter pretty mad.

Environmentally damaging, 'Ponzi scheme', 'scam' were some of the terms and accusations being thrown around, and it was all turned up a notch when the former pro-turned presenter and commentator Matt Stephens announced his involvement earlier this month. 

Stephens is a highly respected and much-loved personality in cycling, so it was perhaps unexpected to see such fury directed his way, even if what he'd got himself involved in was controversial. Rich admitted to us that he expected some backlash, but was taken aback by the ferocity. To understand why for those who don't know anything about NFTs, it's important to clarify what they are first... 

What are NFTs? 
bike-club-nft-avatar-teasers

NFTs (non-fungible tokens) are unique pieces of data stored on a digital 'ledger'. They often take the form of images, but even Tweets can be stored as NFTs. The blockchain it is stored on contains proof that the owner bought it. That means it's a digital asset, like a physical one, and owners can claim the asset holds value, because the file contains a digital certificate of sorts that proves they own the original. In the case of Jack Dorsey's first tweet sold for $2.9 million, the buyer received signed confirmation of the sale from Dorsey and meta data accompanying the tweet, arguably meaning that it holds much greater value than finding the tweet and simply saving a screenshot. 

In the case of Bike Club, the NFTs are 10,000 unique cycling-themed avatars created by Rich Mitch, that will then be sold for the equivalent of around $200 each using the Ethereum blockchain to make transactions. They are set to be 'minted' (put up for sale) this spring. 

Why the backlash? 

The first big sticking point – that might be particularly pertinent for many cyclists who believe their choice to get around by bike is better for the planet – is the environmental concerns. This isn't so much about the NFTs themselves, rather the cryptocurrency that is used to buy and sell them. Bike Club's NFTs are set to be sold using Ether, the currency native to the open-source Ethereum blockchain. 

Ethereum is currently built on the 'proof of work' mechanism, which means that in order to maintain the network and prove transactions are genuine, Ethereum 'miners' solve complex puzzles to add blocks to the chain. Miners are rewarded with Ether for doing the work, so are incentivised to do so. In order to severely compromise the chain you'd have to use enough computing power to take out more than half of it, which would be so expensive it would outweigh the gains you would make. It's been claimed that all the computing power needed to mine Ethereum creates a huge amount of greenhouse gas emissions, as much as the entire country of Libya.

There has been talk of Ethereum moving to the much more environmentally-friendly 'proof of stake' mechanism this year, whereby cryptocurrency owners would instead have to put down virtual currency as a deposit against messing up the chain. If they do mess it up, by making a bogus transaction for example, they would lose those coins. 

The other main criticism is financial. One artist who has been outspoken about her distrust of the NFT market is Eriana Ura-Smith, who told The Business of Business last year: "The biggest negative of NFTs is clear: The market as it currently exists is a classic Ponzi scheme.

"Users invest in something more-or-less intangible, a digital receipt of ownership of an infinitely replicable image or other online object. The general consensus is that they will, in turn, be able to sell this intangible thing for absurd returns.

"Early investors are paid out from the money coming in from new investors, seeing the success of the early ones. Wash trading inflates the value of NFTs, and original owners slowly cash out by selling off the NFTs they've minted for extraordinary prices." 

The Financial Conduct Authority also warns: “Cryptoassets are unregulated and high-risk. We have repeatedly warned people should be prepared to lose their money.”

Why does Bike Club say it is different? 
BikeClubNFT-roadmap

To those not involved in the buying or selling of NFTs, one of the most bewildering things is understanding why you'd want one and why it's worth anything. What is the point of paying eight grand to 'own' a digital image of a Colnago when a half-decent graphic designer could knock you something up for a fraction of that price? Or, you could just buy a real one...

This is where Bike Club says it differs, with Tyler reeling off the many benefits he says the club will offer besides the digital asset: free access to the Bike Club community forum on Discord, discounts and offers from Bike Club's surprisingly large list of brand partners, 10% of Bike Club proceeds going to cycling-related charities, and the prospect of using your unique avatar in virtual games after the mint phase. 

There's also the decentralisation aspect: 

"Bike Club stands on its own without the NFT," says Tyler.

"The decentralisation is really the whole premise of Web 3.0, which encompasses NFTs, cryptocurrency and the whole concept of taking the control and the information and everything back down to user level. 

"We're never going to force you to reveal your true identity, we're never going to force you to pay anything, and we're not going to capture your data to sell against advertising."

Bike Club NFT 1 - via Bike Club NFT

On the environmental concerns, Tyler admits that Ethereum and Bitcoin is very energy-intensive, but claims that proof of work isn't always dirty:

"A lot of the energy usage for these things, Bitcoin mining in particular, comes from places where there is an abundance of energy. 

"The truth is... there are areas where there is an abundance of wind-generated energy, and the infrastructure has been built to hold that energy right there, but the infrastructure has not been built to move this energy out to the bigger cities and places where it's needed. 

"So to justify that build-out expanse, somebody needs to use that power. And so what Bitcoin miners will do is go to these areas and actually consume that power.

"People who were mining in China... it was all coal-fired so it was extremely dirty. Now we've moved all that to other places where there is greener energy. 

"These sensational headlines do not tell the story." 

Bike Club avatars.PNG

On the financial side of things, Tyler and Rich appear to be as scathing as anyone else about heavily 'hyped' projects, where a very anonymous creator might drive up the price of whatever it is they are selling with clever marketing, then disappear when they've bagged a huge amount of cryptocurrency. 

Rich and Tyler argue that the first reason this won't happen with Bike Club is that they - alongside the other two creators, the founder of DeFeet and a former member of the Equipe Z pro cycling team respectively - have reputations to maintain. 

They also claim that because the value of the NFT is tied to club membership, and the community exists on its own without the NFTs, it's unlikely that members of the club will simply cash out if/when their NFT skyrockets in value. 

"With a lot of the NFTs you see people cashing out for tons, those tend to be the art and the hype projects," says Tyler. 

"Some people maybe get lucky and make a whole bunch more crypto coins, who knows. 

"We're going to offer a lot of utility and benefits just for being part of the community, without you ever having to buy an NFT." 

NFT, or NFI? 

So, have I changed my mind about NFTs – and specifically online cycling clubs that involve NFTs – after speaking to Tyler and Rich? I’m still not completely sure. I think Tyler’s prediction that NFTs and cryptocurrency will explode so much this year that they will be unavoidable is pretty far-fetched, and I still don’t fully understand why crypto needs to be involved at all if Bike Club's intentions to start a worldwide cycling club are as honourable as it is claiming.

I now understand that what Bike Club members will be buying is perfectly tangible, so feel like the accusations about it being a 'scam' or pyramid scheme were largely addressed; but I don't think our questions about environmental concerns were answered fully. Although we learned that, according to Tyler, not all energy being used to mine Ethereum is dirty, and the promise of moving to proof of stake is encouraging, I think Bike Club will struggle to convince the wider cycling community that this venture won't be at all environmentally damaging, especially while Ethereum is still built around the proof of work system. 

Bike Club NFT 2 - via Bike Club NFT

As mentioned towards the start of the pod episode, maybe I’m the dinosaur US senator and Tyler is Mark Zuckerberg trying to explain a concept I don’t fully understand yet. Even so, Ryan and I came away thinking that Rich and Tyler seem like they genuinely have good intentions (even if we did decline the offer of joining the Bike Club NFT Discord), and we’re pretty fascinated to see how this all plays out.

Images courtesy of Bike Club NFT

The road.cc Podcast is available on Apple PodcastsSpotify and Amazon Music, and if you have an Alexa you can just tell it to play the road.cc Podcast. It's also embedded further up the page, just press play. If you have any feedback, tips or suggestions, message us at podcast [at] road.cc 

Arriving at road.cc in 2017 via 220 Triathlon Magazine, Jack dipped his toe in most jobs on the site and over at eBikeTips before being named the new editor of road.cc in 2020, much to his surprise. His cycling life began during his students days, when he cobbled together a few hundred quid off the back of a hard winter selling hats (long story) and bought his first road bike - a Trek 1.1 that was quickly relegated to winter steed, before it was sadly pinched a few years later. Creatively replacing it with a Trek 1.2, Jack mostly rides this bike around local cycle paths nowadays, but when he wants to get the racer out and be competitive his preferred events are time trials, sportives, triathlons and pogo sticking - the latter being another long story.  

Add new comment

30 comments

Avatar
Miller | 2 years ago
4 likes

If someone wants to be in a cycling club they should just join their local club. £15 annually for my local club, then you can discover your local roads with people who'll help you if you need it. No bizarre NFT crap required.

Wouldn't you have to be something of a bellend to actually join that thing anyway?

Maybe it's for the people who'll pay £4000 for that new Cannondale with the built-in lights.

Avatar
franta2 | 2 years ago
0 likes

I don't understand. Is this a normal web site/forum with a 200$ membership fee that has to be paid by buying an NFT or is there more to it ? How does it differ from similar sites where you pay with normal money?

Avatar
peted76 | 2 years ago
3 likes

Addressing 'angry backlash'. 

We've had brexit, covid and now russia for the past four years,  living costs are increasing and everything now costs a lot more. In the UK our political overlords (on both sides of the house) seem more ridiculous than ever before (if that's even possible), in the US the political systems seems totally broken (IMO), in Europe the political system seems toothless and self serving, on top of that the weather systems across the world seem to be going bonkers on a monthly basis, we also have HS2 cutting a near kilometer wide swathe through Englands heart, a 'war' for hearts and minds of the country from the motons and the UK is being forced into moving to an electric reliant country, away from gas but quite has literally does not have a plan to cope for the demand incoming.. breathe... 

But don't worry, there's a few guys over here who've come up with a new way they can make some money.. how would you like to join a virtual bike club where you can spend your money in a new and exciting way on your very own 'digital picture'. 

So yeah... it's a bit like when you've had a barney with someone in public, emotions are running high and then some really persistant person is trying to sell you a woven wristband/or neon hat and won't take a polite no thank you as your answer.

Avatar
Wingguy | 2 years ago
4 likes

On the financial side of things, Tyler and Rich appear to be as scathing as anyone else about heavily 'hyped' projects, where a very anonymous creator might drive up the price of whatever it is they are selling with clever marketing, then disappear when they've bagged a huge amount of cryptocurrency. 

Lol, yes. Of course they are. Have you ever met a scammer that comes out and tells you that known scams are a good thing? No, of course not. You can trust us because we're just like you. We hate those bullshit crypto scams as much as you do which is why you can trust us to do the right thing with all the crypto cash you're about to give us.

Then the 'decentralisation aspect' - what actually  is the decentralisation aspect? What is taking the control and the information back down to user level? How do I have more control by using them than not using them?  When you're only telling me what it isn't, not what it is then you get how that's a red flag, right? Then there's the final aspect of decentralisation, which is that we don't have to give them any money for it. Ok, so why should we give them money? So they can give 10% of it to charity? 

Finally, the tangibility thing (and again, how exactly are they not 'forcing' you to spend money in any meaningful sense if the tangible benefits are only unlocked by spending money?) - if the benefits you get are tangible then why are they locked into buying an intangible thing? What is the point of the central NFT itself. 
 

Frankly Jack, if you're saying at this point that your concerns are assuaged it's because they've baffled you with bullshit.

Avatar
Jack Sexty replied to Wingguy | 2 years ago
0 likes

My concerns are 100% not assuaged I assure you! Pretty much anything tangible costs money, my point was that what they are offering could be considered useful or worth something by some people, unlike simply buying a tweet or a photo and claiming you own it, which doesn't seem tangible to me in the traditional sense. I concluded that what they are offering appears to be a service that some outside of the crypto bubble might want to spend money on. Some people think a business class flight is worth spending money on, but I find that utterly baffling. 

I take your point on decentralisation, and probably should have questioned harder here. It’s not truly decentralised if I’m still going through an organisation/’club’ to buy the thing that I want, I get that. 

Avatar
Wingguy replied to Jack Sexty | 2 years ago
1 like

Maybe you can email them and ask. Re. decentralisation, Tim Berners-Lee described it as this - "Decentralization: “No permission is needed from a central authority to post anything on the web, there is no central controlling node, and so no single point of failure...and no ‘kill switch’! This also implies freedom from indiscriminate censorship and surveillance.”" Well, that sounds like every other cycling website I've ever used. And quite frankly, what kind of comments are they hoping will be posted on their new bike forums that could be subject to censorship and surveillance?

Next, what do they give for free and what do you have to pay for? Because on their website it really depends on who they're talking to at the time. When they're telling you why you should buy an NFT it's all about access to members only forums with athlete and industry connections. Then when telling you why you should like them They say "For brands, it’s a new way to connect directly with riders without the pay-to-play gatekeepers controlling your access, letting you have real conversations directly with your customers." How are Bike Club NFT not the pay to play gatekeepers in this relationship?

Avatar
peted76 | 2 years ago
6 likes

There's no 'honour' involved here regardless of the implication, it is pure capitalism. 

Tyler and Rich and whoever else is backing and involved in this venture might well be 'nice people' with 'professional reputations' (Fred West had a good reputation as a plasterer) but they're quite simply out to make money from others selling 'membership' to a club which quite literally uses the earths resources to make the rich richer. I'm quite sure Matt Stephens wasn't brought into this with a promise of altruism.

The people getting rich from NFT's are the same people creating the message and marketing that people are getting rich from this, so that other people feel left out and buy into their ideas and then realise the only way for them to get rich is for more people to buy into the idea, so they create a message and market that people are getting rich from this new, innovative, awesome way to make money without actually working or producing anything. 

Avatar
Simon E replied to peted76 | 2 years ago
1 like
peted76 wrote:

The people getting rich from NFT's are the same people creating the message and marketing that people are getting rich from this, so that other people feel left out and buy into their ideas and then realise the only way for them to get rich is for more people to buy into the idea, so they create a message and market that people are getting rich from this new, innovative, awesome way to make money without actually working or producing anything. 

100% agree.

It's run on the same lines as the pyramid structure of 'influencer culture', where the wannabes trying to climb the ladder promote and fund the lives of the wealthy few at the top (there's a Graun article about this by Symeon Brown).

I skimmed the article as I know these people aren't going to change their tune because of our responses. I'm not an angry, I am just bored of scammers and the whole Emperor's virtual new clothing thing and feel no guilt for ripping into it.

I just feel sorry for anyone who gets suckered into it.

Avatar
Oldfatgit | 2 years ago
3 likes

Guess I must be thicker than a cottage pie, as I *still* don't understand this.
I get the idea of buying something and getting a receipt - that's hardly stunning.
I don't get the rest of it ... Blockchain, Ethereum ... And what on earth does this mean:
"Ethereum 'miners' solve complex puzzles to add blocks to the chain. Miners are rewarded with Ether for doing the work, so are incentivised to do so. "

Avatar
Captain Badger replied to Oldfatgit | 2 years ago
9 likes
Oldfatgit wrote:

Guess I must be thicker than a cottage pie, as I *still* don't understand this. I get the idea of buying something and getting a receipt - that's hardly stunning. I don't get the rest of it ... Blockchain, Ethereum ... And what on earth does this mean: "Ethereum 'miners' solve complex puzzles to add blocks to the chain. Miners are rewarded with Ether for doing the work, so are incentivised to do so. "

For greater understanding, may I refer you to the story of the Emperor's new clothes.....

Avatar
0-0 | 2 years ago
1 like

They look like extras from South Park.

Avatar
Mungecrundle | 2 years ago
8 likes

You could make a better avatar out of fuzzy felt and it would actually exist!

Avatar
mdavidford replied to Mungecrundle | 2 years ago
1 like

Can I put in a pre-order?

Avatar
Mungecrundle replied to mdavidford | 2 years ago
2 likes

I could make one for you, but I'd have to charge you $200 in some crypto currency which I would then lose to criminals.

Avatar
vthejk | 2 years ago
1 like

I much prefer the work of James Arnold aka @littlejamesarnold on Instagram - a wonderful artist who celebrates lesser-known and more humbling narratives in cycling and does some wonderful animations too with trademark humour and humility. He doesn't sell as NFTs, but does sell prints. I'd encourage y'all to have a look at his work and give him a big thumbs up, James is a lovely guy too. Not an advert!

https://littlejamesarnold.bigcartel.com/

Avatar
Simon E | 2 years ago
3 likes

Am I the only one who thinks that Mitchelson's identikit 'portraits' are just a bit crap? It always looks like a way to sell tat to impressionable fans and I wouldn't thank you for a £10 Cavendish mug for instance.

I suspect Bike Club will be just another case of lots of hot air and nothing of substance, like so many "ground-breaking" startups that promise the world, take your money and then it all fizzles out before anything of note happens. But I won't mind in the slightest if I'm proven wrong.

Avatar
Sniffer replied to Simon E | 2 years ago
1 like
Simon E wrote:

Am I the only one who thinks that Mitchelson's identikit 'portraits' are just a bit crap? It always looks like a way to sell tat to impressionable fans and I wouldn't thank you for a £10 Cavendish mug for instance.

The mug is way better than this though.  You can use the mug for tea.

Avatar
mdavidford replied to Sniffer | 2 years ago
4 likes

Probably quite enough mugs involved with this anyway, though.

Avatar
Simon E replied to Sniffer | 2 years ago
0 likes
Sniffer wrote:

The mug is way better than this though.  You can use the mug for tea.

I can use any mug for tea!

I already have 5 or 6 mugs at home and at least 20 unused at work (it's probably even more as 80% of the team are WFH). Absolutely zero need to buy an overpriced one with a crap drawing on it.

Avatar
eadipus | 2 years ago
5 likes

None of the benefits described require the blockchain (or that cursed phrase Web 3.0), a database would do fine, there is no benefit to decentralisation here.

I hesitate to recomend a 2hr+ YouTube video but Line Goes Up is fantastic and explains why NFT's and crypto in general are a terrible idea. Video is here: https://www.youtube.com/watch?v=YQ_xWvX1n9g

The only use for crypto (I don't count speculation as a use) is buying things your not meant to have or money laundering/capital flight. Given the public nature of most crypto currencies they fail to achieve even these uses.

Avatar
Rich_cb replied to eadipus | 2 years ago
2 likes
eadipus wrote:

The only use for crypto (I don't count speculation as a use) is buying things your not meant to have or money laundering/capital flight. Given the public nature of most crypto currencies they fail to achieve even these uses.

That is true but only if you consider all central government actions to be benign/beneficial.

A quick scan of the history books or even the news should disabuse you of that notion fairly promptly.

Avatar
SimoninSpalding replied to Rich_cb | 2 years ago
9 likes

Unfortunately I see no evidence that cryptocurrencies are used by the downtrodden masses to overcome despotic and corrupt regimes. They are used by organised crime and speculators.

Avatar
Rich_cb replied to SimoninSpalding | 2 years ago
1 like

China recently brought in some very draconian anti-crypto laws.

The corrupt despots obviously saw something to worry about...

Avatar
Rich_cb replied to Lance ꜱtrongarm | 2 years ago
1 like

Cash doesn't have an intrinsic value and the value of gold is far in excess of its commercial uses.

Both are valuable because the supply is limited and people think they're valuable.

Cryptocurrency can easily tick both those boxes.

I quite like the idea of a currency that is outside of government/central bank control.

We're all about to suffer a few years of diminishing living standards as a consequence of central bank policy, maybe an alternative approach wouldn't be such a bad thing?

I do agree on the scam aspect though, some degree of regulation for the exchanges would be good.

Avatar
grOg replied to Rich_cb | 2 years ago
0 likes

'Cash doesn't have an intrinsic value'.. of course it doesn't, it has relative value; next you'll be telling us that it's dark at night..

Avatar
Rich_cb replied to grOg | 2 years ago
0 likes

Which was exactly the point I was making...

Avatar
Captain Badger replied to grOg | 2 years ago
1 like
grOg wrote:

'Cash doesn't have an intrinsic value'.. of course it doesn't, it has relative value; next you'll be telling us that it's dark at night..

Not sure if even has that. The values is worth as much as the faith that the individual places in it. If enough people have faith it becomes worth something.
But that's about it.

Avatar
matthewn5 replied to Rich_cb | 2 years ago
0 likes
Rich_cb wrote:

I quite like the idea of a currency that is outside of government/central bank control.

The FT pointed out that means you have absolutely zero protection when the scheme goes tits up. Indeed, they wouldn't dignify crypto with the word 'Ponzi scheme', preferring 'pump'n'dump', because there is nothing of value that anyone holds when it does eventually fail.
https://www.ft.com/content/83a14261-598d-4601-87fc-5dde528b33d0

"In a crash, the holders of bitcoin will collectively have lost what they have paid the miners for their bitcoin. This sum may be not far from the sum originally invested with Madoff, after accounting for inflation. But bitcoin holders will have no one to pursue to recover this sum: it will simply have gone up in smoke, a social loss. The holders of bitcoin would then only wish it had been a Ponzi scheme."

Avatar
cdamian replied to eadipus | 2 years ago
3 likes

I also highly recommend that video. A bit long, but explains the system and problems well.

Summary: it is a scam, only people who disagree are the ones who already bought into the scam

Avatar
Captain Badger replied to cdamian | 2 years ago
2 likes
cdamian wrote:

I also highly recommend that video. A bit long, but explains the system and problems well.

Summary: it is a scam, only people who disagree are the ones who already bought into the scam

Not only a scam, but a highly attractive one (if you jump off before it collapses), and very damaging environmentally.
Crypto is a real problem.

Latest Comments