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Lithium The rise of NFTs: we can, but should we?

Oct. 4, 2021
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In the last two weeks, a form of cryptocurrency called non-fungible tokens, better known as NFTs, has been on the rise in the digital art world and beyond. Unlike Bitcoin and the common dollar, wherein each unit is identical and interchangeable, NFTs are—as their name states—non-fungible, meaning each unit is unique. To own an NFT is to own an unrepeated piece of code kept secure by a code database known as a blockchain. In their most common usage, NFTs are proof of authentic ownership. Be it a piece of digital art made by Grimes or a video of Lebron James dunking, NFTs are being attached to a range of online media and opening the doors for a new wave of sales.  

In many cases, when someone purchases an NFT they are buying two things: the ownership of an original piece of digital content—oftentimes a work of art—and a token signifying their ownership. This is true of many of the pieces sold on Nifty Gateway and OpenSea, popular NFT marketplaces. 

However, the interesting caveat of an NFT is that it doesn’t automatically grant its owner copyright to its associated digital media; it is possible to sell an NFT without selling the true ownership of the content linked to it. For example, in the case of the NFT of the Lebron James dunk video, the owner of the NFT is not the owner of the video; they are only the owner of the token linked to the video. Because they do not own the video itself, they do not get to collect royalties or remove the clip from YouTube. They are essentially the owner of an empty token—a digital object with no inherent worth. 

Besides, even in cases when the purchase of an NFT does result in the transferring of ownership, there is no way to guarantee the purchaser they are the sole possessor of the work. While they may be the sole owner of the NFT, the art being sold on sites like Nifty Gateway is—up until the moment it is purchased—available for anyone to view and download. Thus, purchasers of NFTs are not buying any exclusive product; they are buying the title of “official owner.” Really, this qualification raises the question of why someone would be inclined to buy an NFT at all.

Mike Winkelmann, better known as the digital artist Beeple, made $69 million off a single NFT sale and suggested in a press statement that “artists have been using hardware and software to create artwork and distribute it on the internet for the last 20+ years but there was never a real way to truly own and collect it… With NFTs that has now changed.” 

I agree with Winkelmann’s suggestion that people are buying NFTs to own and collect digital work. However, much like with real-world art collection, it appears digital works are being collected both out of an appreciation for art and a desire for profit.

Winkelmann’s own work was purchased by a digital art collector who owns the crypto-based fund Metapurse and goes by the pseudonym Metakovan. In an interview with Artnet News, Metakovan explains that he was inspired by how much time Winklemann put into making the piece and purchased it out of admiration. However, he also details his belief that the piece will be worth billions someday—and is transparent in being motivated by this anticipated appreciation. While Metakovan claims to have made his purchase for a combination of reasons, potential for profit suggests a justification behind even the most outlandish and seemingly pointless NFT purchases.

NFTs are still in their beginning stages, and it’s possible that people are trying to invest early and profit down the road. This seems to be the most probable explanation behind the rise of NFTs. Why else, after all, would someone spend millions of dollars on “ownership” of a piece of digital content that anyone with an internet connection could access for free—without royalties, no less? But while profit may be the clearest explanation behind the NFT frenzy, it’s also the scariest. 

One of the more famous NFTs sales was a livestream of the burning of an original Banksy illustration. While the Banksy itself was purchased for $95,000, the NFT of its burning sold for $380,000. While the burning could be justified as artistic expression, I’m scared by the notion that a real-world work of art is worth less than its digitized destruction. If we are willing to destroy a painting for an NFT, what else are we willing to ruin as we create opportunities for online profit? I imagine a future akin to that in the novel Ready Player One, where the real world has been left to crumble and decay in favor of more exciting virtual possibilities. 

Destructive and strange NFTs such as the Banksy burning also force us to question the limits of our purchasing power. In other words, what can’t be bought? What starts as the purchase of a tweet could lead to an Infinite Jest-esque world where even the days of the week and the years on our calendars can be purchased at a price. 

Although NFTs are currently being used in fairly innocent ways, the improvement of technology is like a ball rolling down a hill, speeding up as time goes on. Much like the ball cannot stop itself, so long as they keep making money, technology companies will not stop innovating regardless of the consequences. As digital marketplaces expand and monetizable assets proliferate, therefore, it becomes our duty to take a step back and stop the ball. We must decide when digital profit is no longer worth the real-world consequence of a society where everything can be bought and sold. 

Under the proper constraints, NFTs could prove incredibly beneficial to the digital-art community. Winkelmann is not wrong to suggest NFTs could be the start of the ownership and collection of digital art. They could provide, for the first time, major profit and attention to the long-ignored masters of Adobe, Procreate, and Blender.

However, this initial wave of news coverage and interest has already proven sensational boundary-pushing and profit potential to be dangerous motivators behind this bout of digital innovation. Because of this, I’m not innocently excited but instead deeply distrustful of NFTs and the way their introduction to society has gone unchallenged. And so I bear in mind the works of Wallace and Orwell, Huxley and Atwood, and I ask of NFTs the classic question: we can, but should we?