Twitter has begun allowing its users to showcase NFTs, or non-fungible tokens, as profile pictures on their accounts. It’s the latest public victory for this form of … and, you know, there’s the problem. What the hell is an NFT anyway?
There are answers. Twitter calls NFTs “unique digital items, such as artwork, with proof of ownership that’s stored on a blockchain.” In marketing for the new feature, the company offered an even briefer take: “digital items that you own.” That promise, mated to a flood of interest and wealth in the cryptocurrency markets used to exchange them, has created an NFT gold rush over the past year. Last March, the artist known as Beeple sold an NFT at auction for $69.5 million. The digital sculptor Refik Anadol, one of the artists The Alantic commissioned to imagine a COVID-19 memorial in 2020, has brought in millions selling editions of his studio’s work in NFT form. Jonathan Mann, who started writing a song every day when he couldn’t find a job after the 2008 financial collapse, began selling those songs as NFTs, converting a fun internet hobby into a viable living.
NFTs have become both memes and marketing, too. Taco Bell sold “iconic and original artwork inspired by our tacos.” Gap made NFT pictures of Gap-branded hoodies. The first edit to Wikipedia got the NFT treatment. NFT-native collections, such as the Bored Ape Yacht Club’s generated images of ugly primates, have become so popular that an individual ape might sell for millions of dollars.
But it’s not terribly helpful to conceive of NFTs as a new form of digital art or ownership or even technology. Owning an NFT doesn’t confer any rights in the intellectual property underlying the thing owned, which anybody can download for themselves. Those who purchase NFTs end up with nothing but a digital record—the deed for a thing that can be copied at zero cost, with zero repercussions.
Forget the hype around all things crypto. Set aside, for a moment, whether it makes sense to spend a fortune on an ape picture. Those matters are distractions. Let’s call things what they are: NFTs represent a first step in the securitization of digital assets. They turn digital data into speculative financial instruments. That shift has enormous implications because computers are in everything, and that makes anything a digital asset—your bank records, your Fitbit data, rings of your smart doorbell, a sentiment analysis of your work email, you name it. First the internet made it easy for people to conduct their lives online. Then it …….