In the past several weeks there’s been a lot of talk of NFTs and how they are the evolution of fine art collecting. Here’s my honest assessment: that’s hogwash. There, now you don’t have to read the rest of the article if you don’t want to.
What’s an NFT?
I’m not going to go into the technology that makes an NFT work. There are plenty of sites that will help you understand that if you want to. What you really need to know is that an NFT is a digital proof-of-purchase. It’s your way of having the copyright on something.
See, in the digital world, copyright isn’t really the same sort of thing as in the real world. It should be, but it isn’t. The way it should work is, if you retweet something, or copy an image off another web site, you should have to get express permission from the original author. You see it work that way with stock photography, but in most cases artwork and words are swapped around on the internet with abandon.
The idea of an NFT is that someone does own the rights to something significant. It could be a social media post, a meme, or this article. And those rights can be sold. The NFT is an electronic record that the rights have been transferred.
What’s all this nonsense about people paying a ton of money for NFTs?
If you’ve followed the news, you’ve heard that some NFTs have gone for tens of millions of dollars. When we say that we aren’t really talking about the NFT itself (which is nothing but a chunk of data), it’s really the rights that NFT represent.
When you put down that chunk of money, you get the rights to the “original” version of something. It’s like if you bought the Mona Lisa. You’d have the original painting. You wouldn’t really be able to stop anyone from posting this:
But everyone else would be passing around a copy. You’d have the one-and-only one.
The difference here is that in this case, the original is also digital. You could buy this:
which happens to be the first ever tweet. And it’s for sale, at least it was when I wrote this. It wouldn’t stop me or anyone else from publishing an exact digital copy, but you could sleep well knowing that you had the rights to an original.
If this doesn’t make sense to you…
…you’re not alone. Why would you buy something that anyone else could have for free? But that’s what the “rich people” economy is all about. Why would you collect anything that doesn’t have an intrinsic use? It’s all about the pleasure of having, the pleasure of making sure no one else has.
Although, in this case, it is stretching the idea a bit thin. If paying $2000 for a purse sounds like pure idiocy to you, paying millions for a GIF probably makes no sense whatsoever.
I will say from the point of view of a content creator, it’s nice to think that there is a pathway to profit for some of the things I’ve created. If my work on this blog ends up changing the world, then this post might become valuable (it’s the first I wrote.) I wouldn’t share in the profit, but Signal Group might become a lot richer, and that’s something.
But yes, it’s pure idiocy
This is a bubble, plain and simple. Some people have too much money. The things they find culturally relevant are all digital, and they’ve invented a way to collect them the same way folks might collect a signed baseball or a prop from a movie. And they’re willing to pay ridiculous amounts that will probably never pay off.
I can’t imagine ever getting an NFT. I’ve collected a few things in my life but this makes no sense. I expect the market for them to crash in the next year or less, and it will be good riddance to a bad idea.