In 1989, British scientist Tim Berners-Lee created what would become the world wide web, and famously gave up the source code (the ‘language’ of numbers, letters and symbols used to develop computer programmes) for free. Last month, Sotheby’s announced that they would be auctioning an NFT representing that original 10,000-line-long source code on behalf of Burners-Lee, with the proceeds used to benefit unnamed initiatives supported by the computer scientist. Bidding on the NFT, titled ‘This Changed Everything’, was to begin at $1,400, with no final sales estimate from the auction house offered due to the item being “so unusual”. (In March, Christie’s auction house sold an NFT artwork called ‘Everydays: The First 5000 Days’, by digital artist Mike ‘Beeple’ Winkleman, for $98 million.)
“The ability to offer a digital-born artefact is a paradigm shift within the rare books and manuscripts world,” says Sotheby’s global head of science and popular culture, Cassandra Hatton. “For years, people have been asking ‘what do we do with digital born artefacts?’ NFTs are making this possible.”
What is an NFT?
NFTs, sometimes called ‘nifties’, stands for ‘non-fungible tokens’, which can be used to prove ownership of just about anything that has been digitalised—think films, books, songs, games, GIFs, or, currently most commonly, artworks.
Which all makes very little sense without first knowing what ‘fungible’ means.
‘Fungible’ refers to goods or assets that are not unique and can be traded for goods or assets of the same type or value, the most obvious example being cash or cryptocurrency, while non-fungible items are one-of-a-kind objects like a Renaissance painting, a house, or an iconic photograph.
“NFTs in their current form represent a collision of these two forms: currency, specifically cryptocurrency, and art,” notes Diana Seave Greenwald, an assistant curator at the Isabella Stewart Gardner Museum, for Foreign Policy.
NFTs are built using similar programming to cryptocurrency, making trading even easier (you’ll need a cryptocurrency account, or digital wallet, in order to purchase the tokens). As with cryptocurrency, ownership of the NFT, each of which has a unique digital signature, is lodged on a decentralised shared ledger retained on numerous computers around the world—meaning forgery is impossible—a system known as the ‘blockchain’.
What’s The Attraction?
An NFT can only ever have one owner at a time, and though the digital tokens have been around since at least 2014, the past few months their popularity has exploded. The purchase of the tokens is often compared to obtaining an autographed print, but just like an autographed print, there is nothing to prevent someone from taking a copy of it (in the case of an NFT it would likely be a screenshot or a download from Google images) to hang on their wall.
So, what exactly is the point? NFTs are essentially computerised collector’s items, so it’s all about the bragging rights—countless copies of the ‘Mona Lisa’ in the form of postcards, t-shirts, posters and framed prints in circulation there may be, but that doesn’t prevent the original from being priceless. However, rather than acquiring an original da Vinci, owners of NFTs are getting perhaps a piece of internet history, in the form of a digital file (the NFT of Twitter co-founder Jack Dorsey’s first ever tweet fetched more than four million bucks).
Information can also be incorporated within an NFT’s metadata which allows, say, artists to ‘sign’ their creations. It also means that ‘stars’ of memes can finally benefit from, if not always reclaim their identity, of a viral photo or video which they have unwittingly created.
Zoë Roth was just four years old in 2007 when her father snapped a picture of her looking mischievously over her shoulder as a building burnt in the background. The snap was digitally snatched and sent into the infinity of the internet to take on a whole new life of its own as ‘Disaster Girl’, one of the webs earliest memes.
“Any time anyone looks up your name, that is what is going to show up,” Roth tells the Guardian. “So it feels as though you’re always being reduced to something… One picture can never define some fully for their life.”
Last April, Roth sold the image as an NFT for nearly $700,000, money which will help clear her student loans. Though it doesn’t make up for an adolescence of being an unpaid, non-consenting internet punchline, she draws satisfaction from having “some sort of control over what was happening… for once”.
Worth it, or worthless?
“NFTs are risky because their future is uncertain, and we don’t yet have a lot of history to judge their performance,” Arry Yu, chair of the Washington Technology Industry Association Cascadia Blockchain Council and managing director of Yellow Umbrella Ventures, tells Forbes. “Since NFTs are so new, it may be worth investing small amounts to try it out for now.”
But the NFT market is certainly currently on a roll, and worth big bucks—nearly 500 million of them over a 30-day period as of early May. Though it has slowed, at the time of writing NFT sales are still in the region of $14 million per week. However, even record-setting artist Beeple admitted before his auction that it could be a bubble, and that “we could be in that bubble right now”.
“The more you look at it, the more you realise how bonkers it is,” Nicholas Weaver, who studies cryptocurrency at the International Computer Science Institute in Berkeley, tells the journal Nature. He believes auctioning physical papers, rather than digital receipts, makes far more sense.
David Gerard, author of Attack of the 50-foot Blockchain, describes NFT sellers as “crypto-grifters”, the same type of person who’s always “trying to come up with a new form of worthless magic bean that they can sell for money”.
All sentiments further echoed by former Christie’s auctioneer Charles Allsopp who describes the idea of “buying something which isn’t there” as “just strange”. “I think people who invest in it are slight mugs,” he tells the BBC, “but I hope they don’t lose their money.”
Financial ethics and possible instability aside, there’s also the environmental impact to consider. NFTs and cryptocurrency leave a massive carbon footprint owing to the sheer levels of energy required to keep that blockchain running. Bitcoin’s annual power consumption, for example, is estimated to be comparable to that of the Netherlands—which will likely cause a backlash that, some say, will may lead to the cryptocurrency and NFT bubbles to burst.
