If you remember one thing about this article then let it be the following: more than a new ‘What’ NFTs represent a new ‘How’.
Throughout 2020 and 2021, NFTs shot to prominence in a mainstream arena – skyrocketing in popularity and making headlines in the media. Today, while the interest in sales of NFTs have dropped, and in some places completely flatlined, there are still huge amounts of creatives operating with these original intentions. At their core, NFTs enable fair representation and pay for artists and have the makings of an equitable way forward for creators.
Non Fungible Tokens are a new way to prove ownership of things, any things – immaterial ones included, which is the interesting part for digital artists: for the first time they can pin their creations down in virtual realms, sign it and sell it to the highest bidder. A commodification previously reserved for physical art at fine arts institutions. This expansion of the art market makes room for digital artworks, memes, gifs and even tweets to be traded in their own right and earn their creators a living. This revolution has resulted in an opening party at the intersection of art and tech and the banners say NFT.
What, exactly, is an NFT?
An NFT is a new digital file format. Behind the screen you’re scrolling from is a system of information represented by Ones and Zeros. A Non Fungible Token formats those figures into a unique code, and in a given network of computers, each one updates to verify two things about that unique code:
1. that the information is indeed a unique sequence – creating authenticity, and
2. that it was authored by you – creating trackable ownership
Before a chain of computers could perform this automated consensus, you needed centralised human verification to ultimately confirm truths. As human nature is corruptible, this proved to be an easily corruptible system. It is harder to corrupt a computer protocol designed to cut out the middleman. This is the basic setup of the blockchain, and why it has revolutionised trade – it has digitised it, decentralised it from single human verification, and has linked digital actions to nearly incorruptible blocks of code, making it ‘unfunge-withable’ by generating Non Fungible Tokens.
But what does Non Fungible Token mean?
Fungibility comes from the word function, or to perform. When two things have the same function, they are fungible. When they are Non Fungible – you cannot swap one for the other. So a Non Fungible Token refers to a unique file format, and offers a way to prove authenticity.
An NFT is a digital ‘one of a kind’ verified by computers. Just like humans deem a piece of paper linked to rare blocks of gold valuable by collective agreement, computers now confirm blocks of code as valuable due to its digital uniqueness. This token of uniqueness can correspond to anything really, it could serve as a deeds to a house, or represent a limited edition sneaker, but the space it has cleared for non-physical digital things is new: Digital files are easily copy-pastable all over the internet. But having an NFT is not like having a jpg or screenshot, an NFT represents the jpg by linking it to a digital receipt, so somebody can prove they own it. This proof of ownership is the key that unlocks the marketplace for digital items like video art or virtual garments. Backed by the blockchain, they can be owned, collected and commodified via a digital token of originality – a Non Fungible Token.
“An NFT is a format of a technology. It’s not a thing you sell. It’s like, if somebody were to ask you what kind of music you listen to, you didn’t say I listen to MP3s, you say, I listen to rock or jazz.” – Swan Sit
Why are NFTs popular now?
With the global pandemic locking us out of the physical world in 2020, we inhabited new spaces online. Think Zoom gatherings, global Instagram protests, and the online migration of every commercial industry.
Meanwhile, Cryptocurrencies had been gaining legitimacy for a while and paved the way for the acceptance of crypto art. Indigenous to the internet, memes, gifs and brain tingling visuals could now be monetised aside from merely popularised through viral status and likes. Now there was a way to buy digital creations. The creators who make digital art could for the first time sell their stuff by getting on to an NFT marketplace, generating a digital collectible, linking it to their work, and trading directly with other cryptoverse citizens – no gallery needed.
Pinning pixels and vectors to an NFT takes care of that like a signature on a painting. No matter how many prints or replicas are made, the signed original is worth most.
But are NFTs art?
Not the file format itself, but – in the context of NFT art – the artworks they are linked to come under the same valuation as of any physical, non blockchain based art piece, offline. The physical art world values a piece based on many things: who made it? What have they made before? During which time? Is it skillful? Does it compel an audience? And notable here – is it original? Satisfying answers to some of these questions existed for digital art, just not the ones that would matter for trade: Proof of originality and exclusivity – why buy something that’s copy-pastable for all? Pinning pixels and vectors to an NFT takes care of that like a signature on a painting. No matter how many prints or replicas are made, the signed original is worth most. The one you can prove is original is attractive to art collectors.
The mental hurdle traditional art institutions had to jump was from physical ownership to virtual ownership. It can be argued that physical art has always transcended the material by the strength of the idea behind it. Art reflects something ungraspable – it is at home in the immaterial, in a feeling, in disruption, in expressions of cultural consciousness. As much as real world currency, the value of art is linked to social currency. The NFT market is a place for buying into the ideas of tomorrow. The usual art players find themselves on new terrain in creative commerce – underpinned by decentralised tech and enriched by digital art.
NFTs and the Future
Opening a marketplace for digital artists widens the playing field, though that’s not to say every creator will be a rockstar. The ones who have won big in the first NFT rush, like the widely hyped Beeple (link), had mostly already been working in obscurity and building up a community and credibility behind their work.
Newbies will start at begin, and in a decentralized space – with none of the governance of more central structures, novices have proven vulnerable to fraud – an NFT minter (person who registers the code) may not be the original creator of a piece. Decentralised systems can make for an unregulated wild west with much to be gained and much to be lost. The creation of digital scarcity mimics a supply-and-demand resource scramble characteristic of capitalism.
Technology reflects us, the people, flaws and all. Transitioning from the internet to metaverses. NFTs represent a new ‘how’: Beyond the tech this moment offers another chance to move through economic ecosystems – together. Decentralisation refers to self-governing interconnected systems. Whether that is used to good or bad ends, depends on our interaction with this new format. Once again, the medium is the message.
Switch on to NFTs is part of a new educational series on The Flash Drive called Nxt Explains, where we shed light on the latest revolutions in tech and new media art.