The darker side of non-fungible tokens

(QuickHoney for The Washington Post)

You can buy just about anything these days — even what you can’t actually own.

The world is in something of a fever over “non-fungible tokens” or NFTs, crypto-jargon for a concept just as tortured as it sounds. NFTs are digital collectibles, verified through the blockchain, so that an image, song, url or any other piece of data can be authenticated as “original.” Putting a price on the priceless, however, doesn’t come cheap.

The NFT innovation gives something that might otherwise have no value some patina of worth by letting people claim sole possession of trading cards they can’t actually hold, or cars they can’t actually drive, or limited-edition kittens they can’t actually pet.

Or art, like the JPG file by the artist known as Beeple who sold a collage for $69.3 million at auction last week to a digital asset investor with the pseudonym MetaKovan, who paid for the purchase in a cryptocurrency called ether.

The NFT bonanza seems wacky enough to have come from a whole other world, but in reality the opposite is true. Our physical world is replete with scarcity. The fashionably thrifty can print David Hockney’s “A Bigger Splash” as many times as they like to furnish their bedrooms, but there’s only one canvas to which the man himself applied his brush, and that’s in the Tate Britain.

The Internet works the other way around. Any MP3 file can be retransmitted over and over from person to person. We can all send the JPG of Beeple’s collage to each other, too, and we’ll all possess the same thing — which, because it’s infinitely available, is unlikely to fetch much money at market. What we won’t possess, and what NFTs provide, is proof that the version in our possession is special. Suddenly, thanks to a bit of blockchain magic, the same scarcity that stalks the offline world exists online, too.

Is this good? For Beeple, certainly. And for some others dabbling in crypto-conversion, too. Kings of Leon this month became the first band to release an album as an NFT, which is a big boost for a group you hadn’t heard much from since “Sex on Fire” limped off the charts in the late aughts.

The proponents of NFTs argue that digital creators can finally earn something for their labor. Sometimes, they do it by cutting out middlemen and marketing their wares directly to consumers. Sometimes they’re making money for products that previously no one would have thought to pay for — like an animated flying cat with a Pop-Tart body streaming out a rainbow as it prances through more pixels. This meme born on YouTube 10 years ago raked in $580,000 last month.

It scarcely matters that whatever value these non-objects have is manufactured by algorithmic sleight of hand, because value has always been made up. The hottest sneakers resell for thousands despite consisting essentially of some plastic glued to some rubber with a little leather thrown in. Even the Hockney hanging in the Tate is just cloth with acrylic resin slathered on. Marcel Duchamp’s famous urinal is, of course, just a urinal — which is precisely the point.

Maybe paying for the Nyan Cat is sillier, because anyone can stick a Nyan Cat into a WhatsApp message — and because in the absence of a tangible flying cat, most of what you’re getting is bragging rights. But how much sillier is it, really?

Unless it’s worse than silly. Unless it’s dangerous. The skepticism about NFT mania has taken on an environmentalist air. Major cryptocurrencies are mined, which basically means that a computer must solve a puzzle to craft a new coin. But computers use energy, and because the puzzles have become harder as cryptocurrencies have become more popular, the past decade has spawned a financial network with a bigger carbon footprint than entire countries.

There’s another problem: The biggest buyers of NFTs often aren’t buying to own. They’re buying to sell again. They’re investors in cryptocurrency, or investors in NFTs generally. Some may be art lovers, or cat lovers, or baseball card lovers. Many, however, are just traders. They’re market-makers hyping up their own stocks.

Maybe that’s why few of those who are ballyhooing all we’ll gain from this revolution are stopping to consider what we might lose. Obviously, we like owning stuff. But the absence of ownership on the Internet has cradled much of our modern-day culture. Think of memes, which are by their nature collaborative: someone cracks a joke, and suddenly the joke turns into a template for other people to crack jokes of their own that are the same, but different, constantly evolving. We’re writing a common language.

Think about Nyan Cat, a GIF some guy put on YouTube that suddenly everyone was putting everywhere, to mean everything. No one owned the creature because all of us did. The same goes for any digital contrivance: We’re all able to have something, and we’re also able to share it. Add proprietary rights, and the whole communal project falls apart.

All these odes to a new world where you can stick a price on anything are also eulogies for the old one.

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