NFTs = Non-Functional Things? I Have Questions…
I am questioning some of the hype around NFTs. And I worry that something that is intended to help digital art is actually going to impede it. Given 100% of the emphasis in the NFT discussion is on blockchain-secured ownership and how secure it is, and 0% is on the work itself, with an NFT you have to believe that the value is in the blockchain signature, not in the asset itself. And that is like going to MoMA because you like buying the ticket — not because you like to see the art. Art is without utility and intrinsic value. And yet it is absolutely vital to our lives — and so people decided to attribute value to it. Scarcity and the difficulty to get something defines its price — and copyright is keeping art protected. But it is the piece of art, the asset, that creates all the emotions — not the signature on its back. NFTs create more questions than they answer — I found some disturbing ones.
NFTs may be all the rage in the art community these days, but I felt driven to question some of the hype around them. I’m worried that what has been intended to help digital art is actually going to end up impeding it.
In my recent efforts to secure, and evaluate, an NFT, the process ended up creating more questions than it answered.
A painful process
It turns out I’m something of an idiot when it comes to NFTs. It also turns out that you have to really, really want to buy an NFT, in order to really endure the process of buying one.
On a recent Clubhouse call, I spoke to an artist and checked out her NFTs. Based on that conversation, I decided to buy one for myself and eventually found something that I thought would be cool to “own”. Now, I had assumed that it would take a matter of minutes to secure one on Opensea. Especially given that I have actually held a minuscule amount of crypto in a wallet for the last 5 years or so, and I have also been following the steady evolution of the blockchain era.
Unfortunately, my wallet wasn’t one that Opensea accepts, so I ended up having to go through the entire registration and purchasing process like any new user would. I thought this would give me the chance to see how the user experience has improved over the last 5 years. But in reality, I found myself jumping through an ever-more-frustrating series of hoops that took me over an hour to complete.
I will spare you all the details, but if you read this article you’ll get a taste of the cryptillion steps you need to take. It’s “simple” if you’re the kind of person who loves dealing with the blockchain and seeing how a new ecosystem arises. But if you consider that we live in an age where the iPhone represents the simplest user experience, then it’s a total nightmare! And that’s because you can’t simply pay for something — you need a wallet app to buy the NFT and an exchange app to buy cryptocurrency. You need to confirm almost everything — all the time. Compared to this, your banking app experience feels like heaven, no matter how much you may complain about it.
Long story short, after an hour of furiously tapping on my phone, and enduring a ridiculous amount of signature requests (please confirm that you are, in fact, you) and payment confirmations, I reached the final approval screen which asked me to confirm payment of the “gas” fee, the Mining fee to process my purchase (and to send the transaction to the Etherium blockchain). It was an eye popping $174, or 33% on top of the purchase price of $520!
So, I was about to buy a unique collection of beautiful pixels for what I already considered to be a lot of money and this fee adds another 33% on top because… some computers are busy mining cryptocurrency and can’t make a blockchain entry for my one transaction unless I pay $174?
I couldn’t resist not making the purchase! Instead, I tried again and again until finally, 12 hours later, the sale went through for a Mining fee of $25 (4.8%). As I said before: you have to really, really want to own an NFT, in order to endure the process of buying one.
And in case you wonder why people are throwing out Crypto worth millions of dollars like kids love throwing candy at their synapses: it is a weird fact that the cryptocurrency market value went from zero to two trillion in five years. There are over a 100,000 Crypto millionaires.
What do I own?
So, now I own a NFT. What now? Well, because I didn’t quite know what to do with it, I started to ask some questions instead. What did I actually buy? Where is it located? What if the artist becomes the next Picasso and I need to secure my artwork? What if someone copies or steals my NFT?
In terms of theft or copying, in the physical art world you can do something about that. Having co-founded and operated a music TV channel, I know more about licensing and copyright than I’ve ever wanted to, and copyright is at least enforceable. If you copy someone’s copyrighted imagery without their permission, you can take them to court — there’s a legal process for that.
NFTs are touted as being more secure than traditional copyrighted material — and that may very well be the case — but how exactly do you go about enforcing an NFT? If someone copies the image you bought as an NFT, how do you want to take that to court? How do you even explain to a judge what you’re talking about?
You can’t tokenize trust
Who is responsible for confirming that someone minting a piece or digital art and putting it up for sale as an NFT is the actual artist? An art buyer can limit the risk of buying fakes by only making purchases from reputable galleries or auction houses who do extensive due diligence. But the art market is still built on trust.
You could argue that NFT buyers could do the same, only buying NFTs from the same reputable auction houses or some known exchanges. But here comes the next problem: what is a known exchange? And how do artists get on them? How do they verify artists? The very few and well known exchanges like Nifty and SuperRare have waitlists as long as a year. In fact, several artists that I spoke to complained about not getting onto the platforms, forcing them to consider other channels, which may have a bunch of fake artists.
Anyway, back to my NFT. It is mine now. I paid for it. But what does that really mean if someone else sees the same image? Or copies it and shares it with friends on Whatsapp? Yes, they may not have certified ownership in a blockchain, but they also might not care.
During the Sotheby’s auction of Pak’s digital art, you were able to right-click on the asset and save the file to your computer, and you had the same thing that the buyer got (minus ownership). There is even a “Right click, save as” debate, where less crypto savvy people question why they should buy if copying is one click away, and with crypto folks arguing that the others don’t see the deeper meaning.
Here’s another question — when you create an NFT, an algorithm creates a hash code which identifies that exact piece of digital art as being unique, and links it to your ownership certificate before storing it on a blockchain. That’s all well and good, but what happens if the artist changes a few pixels of that digital image? Wouldn’t that generate a new hash code, and the work would be considered a brand new piece of art? Which could then be sold as a new limited edition? 1 pixel changed and there goes the uniqueness of your $69M Beeple piece?
NFT = espresso cup
Because Friday is the day when I carve out time for learning new stuff, I went to the bottom of this particular rabbit hole. Here is the best article I found on the subject.
In a nutshell: I learned that you can’t store the actual digital artwork in a blockchain because (at least for now) blockchains are too small. So, what do you do when you can’t squeeze an alligator into an Espresso cup? You put a note into the Espresso cup and tell folks where the alligator can be found — and who owns it.
So, wait. I am now the proud owner of a beautiful, shiny…link?????
I learned that I bought a file with a certificate of ownership (that is the note in my Espresso cup) which is on the blockchain forever and no one can take that away from me, and I bought a link that leads to the content on some startup’s server. Beeple did that too. His artwork lives on a Cloudinary server which is used by Nifty, where the original NFT was bought. So, does that mean that if Nifty or Cloudinary go out of business, you can’t find your artwork any more? But you still own the certificate?
Did I buy a cloud?
That got me thinking: what happens if the link breaks, or they go out of business? Does my NFT turn into a non-functional thing? An ownership certificate without any artwork? It would be one thing, I suppose, if everything was stored on Azure, Microsoft’s cloud service, but I don’t know how long these other services will last. Who do you think will still be around in 5, 10, 20 years? Azure or Cloudinary/Cloudify? [Note: The industry is actually trying to alleviate that particular problem by using the InterPlanetary File System (IPFS), but I”m going to draw the line at discussing InterPlanetary…]
And yes, of course I can save the image to my desktop, but that then defeats the purpose of the NFT. So are these people, who have recently spent millions of dollars on digital art, now downloading them and saving them to a computer or memory stick? Is that the future of art curation? I certainly hope not!
But seriously…
So, are we supposed to go through this entire elaborate process just for the sake of making triply sure that we really, really own a piece of digital art behind a simple link?
Because, let’s be honest - it’s REALLY complex. It feels to me like going through the laborious process of entering your car by getting into the trunk, clambering into the back seat, climbing over the passenger seat, and then getting behind the wheel and driving off. Sure, no one has seen you enter the car, but you could just as well open the driver’s door, hop in and drive.
For the sake of anonymity and mastering the complexity, am I willing to do that? It feels like a very big hammer for a very small nail.
Right now, ALL of the emphasis in the NFT discussion is on blockchain-secured ownership and how secure it is, and NONE of it is on the work itself. Which appears to mean that, to like NFTs, you have to sincerely believe that the value is in the blockchain signature, not in the asset itself — the work of art. And yet it is precisely the piece of art that creates all the value and emotions we associate with it — not the signature on its back.
I completely agree that we need to be able to buy, trade and exchange digital art. So much is being created exclusively online that is awesome and inspiring and engaging, that it would be ridiculous to limit yourself solely to buying physical art. And of course it needs to be secure — if you’re a digital artist, there absolutely has to be something that attributes ownership for digital-only art. It’s imperative for a healthy internet, where so much creative exists that is digital only.
What’s interesting about NFTs from the digital artists’ perspective is that for the first time in the digital age they have the power to publish work which is automatically signed and thus has value. Creators and digital artists finally realized that for the last decade they had basically given away the value of their work to platforms like Instagram for free. NFTs are smart contracts and often have a “secondary sales fee” built in. Every time someone purchases and sells a NFT, the original artist gets a share. The mental shift from “Maybe I’ll get 1,000 likes for my published work” to “Maybe someone is willing to pay $1,000 in Crypto for it” really empowered many artists to stand up for themselves and be vocal about the value of their work.
But I just don’t get where the benefit is in choosing something as complex as I found with NFTs.
Let’s keep it simple
Shouldn’t we be making it SIMPLE for people to sell their art — and just as simple for people to buy it?
How about offering a way to grab images or videos or files from your camera roll or your desktop, upload them with some watermarking to a (future-proof) cloud server like Azure or AWS, then tie them to a simple access management and payment tool? What if you could share a link on social media and all people needed to do is pay? They can still own the image, the video, the asset — and have easy access to it. Ok, so you can’t brag about it being on the blockchain — but do you really care?
From companies like Amazon and Apple we can learn how to make it easy for people to buy. My own company, Laterpay, made it a 1–2 click experience to buy digital content without upfront payment. Why shouldn’t we stick with what works, rather than build up complexity that needs to be solved in strange ways?
Art should be all about what it sparks within us and the value it creates within us. After all, you wouldn’t frame a price tag and a certificate of ownership, while leaving your art in the cellar. But that’s what NFTs seem to be asking us to do…
