NFTs: The promise for authenticity
If you have been keeping up with the technology world recently, it is likely that you have heard the acronym NFT floating around. NFTs or non-fungible tokens are the latest hot commodity in the blockchain world. Many of the headlines are related to digital art and NFTs. Recently, artist Beeple’s digital collage “Everydays: The First 5000 Days” sold for a staggering $69 million. Jack Dorsey, co-founder and CEO of Twitter, sold his first tweet as an NFT for $2.9 million. American DJ 3LAU collaborated with digital artist Slimesunday to produce an NFT that includes a music video and dance track that the buyer can choose, selling for $1.33 million. Other artists have been making significant compensation for their work as well and new uses for NFTs are being explored constantly. It is a relatively new technology that has not been widely investigated philosophically by scholars yet. I am diving into NFT technology to raise interesting and enduring philosophical issues surrounding authenticity.
The brief history of NFTs
The first NFT, “Quantum,” was a piece of digital art created in 2014 by Kevin McCoy, a prominent media artist, in partnership with Anil Dash, now CEO of Glitch, a small technology company. A few years after “Quantum”, in 2017, the rise of Ethereum, a blockchain platform that powers the second-largest cryptocurrency ether, led to Cryptopunks, the first NFT on Ethereum used for trading unique cartoon characters. During this time, CryptoKitties also surfaced as a way to adopt and trade virtual cats using NFTs. Soon NFTs caught on for more mainstream businesses such as Nike. In 2019, Nike patented CryptoKicks using NFTs to verify collectors’ shoes. In 2020, the NBA established TopShot in partnership with Dapper Labs, a blockchain company, to host an online marketplace for virtual player trading cards and other media such as highlight clips using NFTs to provide authenticity. Today, NBA top-shot has 800,000 accounts and is leading the NFT market with $500 million in sales. To understand the recent craze over NFTs, we can look at sales data from NonFungible.com that shows how NFT sales peaked during the first three months of 2021. Transactions have slowed since the end of March 2021 in which the month saw almost $150 million in sales. While purchase levels seem to be on the decline, sales have remained higher than pre-pandemic levels. The technology does not seem to be fading away anytime soon.
What is an NFT?
It is important to understand the technology behind an NFT as its features lend itself to the philosophical questions regarding authenticity I am addressing shortly. An NFT or non-fungible token is a unique digital asset with certifiable ownership that lives on a blockchain; hence, the descriptor non-fungible meaning the asset cannot be replaced with something else–it is one-of-a-kind. For those unfamiliar with blockchain technology, in brief, blockchain is a data structure for storing transactional records otherwise known as “blocks” on a “chain” of public databases. These blocks are connected in a network of adjacent nodes which is called the “digital ledger”. The intrigue of blockchain technology, and consequently NFTs, is its ability to be transparent in recording changes to the ledger thus creating greater trust in transactions. NFTs exist as assets operating on blockchain technology. Most NFTs are part of Ethereum blockchain, but exist on other ledgers as well. Ether, the cryptocurrency used on Ethereum, gives individuals the opportunity to bid on and buy NFTs. If an NFT is bought on Ethereum, Ethereum will hold a public record of that individual’s ownership of that NFT. Additionally, anyone can “mint” an NFT, which is the process for making a digital asset part of the Ethereum blockchain (or another blockchain of choice), through online services. After minting an NFT, the new digital asset is stored in a digital wallet. The wallet can then be linked to an individual’s account for digital marketplaces such as OpenSea, the first and largest marketplace for crypto collectibles and NFTs, where individuals can then buy and sell their NFTs.
When an NFT is purchased, the individual only purchases a link to the digital asset. Further, it is the link that lives on the blockchain. The data from the digital asset does not reside on the blockchain. For instance, when purchasing digital art as an NFT, the owner receives a hash code–for example, the hash code for “Everydays” is 6314b55cc6ff34f67a18e1ccc977234b803f7a5497b94f1f994ac9d1b896a017–or lone key of numbers and letters that directs the owner to the transaction on the blockchain that signifies their unique ownership over this NFT. The digital art itself does not live on the blockchain. It is important to point out that owning an NFT does not grant the owner any intellectual property rights over the digital asset associated with the NFT. Thus, in the instance of digital art, the NFT owner could not necessarily print out the piece of art and reproduce the artifact in any way that they would like to. The NFT also does not prevent copies of the digital art from circulating. Other instances of that piece can exist simultaneously, however, the replicas would not be the NFT. Despite this lack of property rights or control over reproduction, NFTs’ ability to be mathematically unique and transactionally transparent via blockchain is the key intrigue of NFTs. These particular attributes of NFTs promise authenticity among digital assets, and this quest for authenticity is not new.
The desire for authenticity
For a while now, there has been an obsession over obtaining the “authentic” or “original” work, particularly, but not exclusively, in the art world, with the end goal of establishing and certifying the value of a piece so that it can be monetized. The first written instance of an original work of art having “authenticity” was by German philosopher Walter Benjamin in 1935 in his essay “The Work of Art in the Age of Mechanical Reproduction” where he explores art reproduction of various mediums and the philosophical issues that arise because of art’s ability to be copied. Since Benjamin’s writing, the desire for authenticity has not waned. People have been pining over and paying millions for true Warhols or Van Goghs rather than for a reproduction. Challenges surrounding proving authenticity and sniffing out frauds continue to persist with many cases getting to the point where the law is needed to settle disputes. However, according to lawyer Peter R. Stern, interviewed in an article by The New York Times, “Ruling on Artistic Authenticity: The Market vs. the Law,” “A decision by a court in the United States that a work is authentic may or may not have any value. It’s totally up to the market.” The law can not always resolve issues of art authenticity since the value of art is assigned by the people. With digital art becoming more prevalent, these issues of authenticity that arise due to the reproducibility of art has not gone away. Before arriving at the role of NFTs in this issue, I am first investigating the desire for the authentic asset, despite being digital or physical. I am focusing on authenticity in relation to art as there exists foundational undertakings on the subject. Regardless of the attention given to art, the discussion of authenticity can be broadened to other mediums that NFTs cover such as music and trading cards.
Nigel Warburton, a British philosopher, wrote about the “fetishistic element” of art associated with the original or authentic. In his 1997 paper “Authentic Photographs,” Warburton examines the medium of photographs with their ability to be copied. In reference to photography and what constitutes an authentic print, Warburton explains that
the very fact that the photographer was involved in this direct way in the causal process of print-making, even if the photographer did not print the work, is significant. We should not underestimate the importance of this aspect of an original print, one which is frequently a psychological spur to imaginate involvement with the photographer’s embodied intentions.
In order to certify, even a print, as authentic, Warburton claims the photographer must be involved: “only the photographer can determine that a print is of sufficient quality for it to count as an authentic print.” This is because “[a]nyone else can only hazard a guess, and may in the process seriously damage our understanding of a photographer’s style, and thus his or her possibility of creative expression.” The certification of the authentic ensures that the artist’s intentions and craft is not tainted. Benjamin, in his paper on art reproducibility, also comments on the aspiration to be connected to the artist’s process and history: “The authenticity of a thing is the essence of all that is transmissible from its beginning, ranging from its substantive duration to its testimony to the history which it has experienced.” An original piece of art carries with it a story that is valuable in itself. Additionally, Benjamin believes “the uniqueness of a work of art is inseparable from its being imbedded in the fabric of tradition,” or “in other words, the unique value of the “authentic” work of art has its basis in ritual, the location of its original use value.” There is a particular, “aura” as Benjamin explains, that “withers in the age of mechanical reproduction” thus revealing the desire for the authentic. It is this quality that accompanies the original that creates value for many individuals.
Related to the fetishistic element Warburton brings up, there is also a desire for closeness to the artist through owning the original work. Benjamin mentions
the desire of contemporary masses to bring things ‘closer’ spatially and humanly, which is just as ardent as their bent toward overcoming the uniqueness of every reality by accepting its reproduction. Every day the urge grows stronger to get hold of an object at very close range by way of its likeness, its reproduction.
In Benjamin’s instance, he claims people are willing to accept copies in order to get closer to the actual object since they can not have the original. This comment still reflects the desire for proximity to the artist.
Warburton proposes two kinds of authenticity–token authenticity and type authenticity–that make a useful distinction when examining NFTs. For Warburton’s classification, the key difference between the two types of authenticity is the presence of this fetish:
In such cases of token authenticity, the fetish element of authenticity is preserved: we take token authenticity as the only reliable guide that compliance conditions have been met, which has the added benefit that the photographer will have ‘passed’ the print in question. But there is a further variety of authenticity: type authenticity. Here the fetish or relic element is lost. The photographer certifies a type, and implicitly sets compliance conditions.
Further, “if two prints were virtually (or even actually) indistinguishable, only the one certified by the photographer would count as genuine or authentic,” according to Warburton. While Warburton was contemplating these questions surrounding authentic photographs in 1997, digital photography was just coming into the scene. Warburton hypothesized that the easily reproducible nature of digital photographs would create a shift away from token authenticity toward type authenticity. Warburton’s speculation on authenticity of digital versus physical photographs relates closely to the discussion today with digital work and NFTs. Just as digital photographs are inherently reproducible, so is digital art and nearly any other digital asset that could exist as an NFT.
As discussed by Warburton and separately by Martin Zeilinger–a researcher and philosopher who is interested in digital art and emerging technologies–in his paper “Digital Art as ‘Monetised Graphics’: Enforcing Intellectual Property on the Blockchain”, being reproducible means that little to no value is assigned to copies. However, all the value is given to the original. In Zeilinger’s discussion of the nature of digital work, he points out the challenge digital art faces in being authentic:
the digital is almost always easy to reproduce and share, suggesting, again that immaterial digital-born artworks cannot easily attain the status of the unique, desirable collector’s item that continue to inform the standards by which the commercial art world measures value in both its aesthetic and commercial connotations.
Zeilinger uses this point to support his claim that platforms like Monegraph, a blockchain media rights company which can be likened to today to NFT online marketplaces, will not help artists in their attempt for control over their work: “it may be the nature of the digital itself that stands in the way of turning digital art into a stable financial instrument.” However, Monegraph and other similar platforms work to create authenticity where it does not currently exist. Zeilinger explains this phenomenon as “an ontological transformation from infinitely reproducible intangible artefacts to ones that are artificially scarce and therefore, potentially, valuable.” Since we desire authentic art for its connection and closeness to the artist and for its promise of particular qualities, and now face problems with authenticity for digital work, NFTs have arisen as a potential solution in order to fabricate authenticity to assign value to digital assets which can then be bought and sold.
NFTs intend to solve the problem of verifying art by using blockchain technology to provide unique hash codes that signify an individual’s ownership of the NFT. While this is the promise of NFTs, that does not necessarily mean the technology is capable of doing so in the real world. Zeilinger believes that the question of authenticity has shifted when we talk about NFTs:
Technically, our understanding of the image’s ‘authenticity’ would no longer be bound to any particular copy of it but rather to a distributed blockchain hash that accurately and irreversibly documents the GIF’s [or other digital asset] origin, ownership history, etc. Conceptually, the authenticity of the image would no longer be inscribed in a scarce ‘original’ and linked to the creator of this artefact but rather in its distinctiveness as verified by the blockchain hash.
In his view, NFTs are ineffective at providing this authenticity that can lead to potential value thus not giving artists a stable income they desire.
What’s next for NFTs?
Since the technology is still in its infancy, there remains a host of possibilities for future uses and an unpredictable future for the technology. There is discussion among content creators on YouTube to use NFTs to establish shares in their videos by minting short clips of a larger video in an effort to lessen reliance on YouTube’s monetary policies. Other possibilities exist for using NFTs to decentralize big business, but many people including Zeilinger and Dash, the first NFT creator, suspect that NFTs will continue to benefit the big companies supplying the technology rather than the artists. It is useful to consider the original intention of NFTs in relation to the state of NFTs today.
In a recent Atlantic article, “NFTs Weren’t Supposed to End Like This,” Dash explains how McCoy, the artist Dash partnered with for the first NFT, wanted a way for artists to have ownership over their work. This conversation between Dash and McCoy happened during the time when people were reposting artists’ works that were not their own on Tumblr, generating engagement (and likely monetary compensation). The original intention for the NFT technology Dash and McCoy developed was for providing artists with ownership rights and protection over their work. Today, “Quantum” is valued at $7 million and Dash has no stake in the high value of that asset. Dash points out how artists are not the ones profiting from NFTs as originally intended, rather it is the tech industry seizing opportunity in a new multi-billion dollar market. Additionally, since platforms like Ethereum are responsible for maintaining the public record of ownership, individuals are dependent on the platform continuing to operate into the far future if they hope to keep their NFT asset for a while. This establishes a new dependency for artists hoping to make money by getting around other monetary reliances. However, many artists like digital artist Alfredo Salazar-Caro, the one interviewed on Wall Street Journal’s “The Future of Everything” podcast episode “How NFTs Could Disrupt the Art Market,” are hopeful that NFTs is the way forward for selling their art. Yet, sales for Salazar-Caro so far have been unsuccessful.
There is speculation on whether NFTs will remain a collector’s economy or whether it will disrupt economies. As mentioned prior, NBA’s TopShot is leading the NFT market in sales with its trading cards and highlight clips–a great example of the use and enthusiasm for NFTs for collectors. It is possible that the NFT market stays niche, but there is also continued expansion of uses particularly in virtual worlds like Decentraland. Public voices such as Gary Vaynerchuk, CEO of VaynerMedia, among others are making big bets on the NFT market. Vaynerchuk has even suggested that small businesses should utilize NFTs for memberships, clubs, and discounts. Again, Vaynerchuk is highlighting the desire for verifiable authenticity that NFTs could bring. It will be interesting to see how the NFT market transforms along with blockchain and cryptocurrency in the coming years. Despite whether or not NFTs are here to stay, the issue of authenticity for digital assets will persist because of the reproducible nature of the medium and the desire to hold the original asset.
