Digital art and collectibles are a rich vein of opportunity, but this isn’t the way.
I don’t live under a rock, but I’d never even heard of “NFTs” until about a month ago, and now they are absolutely everywhere. Mainstream artists and pop acts are “minting” digital collectibles, artists are auctioning off image files for tens of millions of dollars. Very few trends emerge so widely this without pointing toward some problem that wanted solving. But the current ecosytem springing up around NFTs is a confusing mess, slow and expensive.
I spent some time as a total normie trying to buy and sell a crypto collectible, and I’m going to explain what the fuss is about, and how they suck. And take a guess at where we’re headed.
An NFT is just an online registration for a file
It’s a so-called non-fungible token. While I’ve always liked the word “fungible” and I’m happy to see it going mainstream, this is a pretty silly acronym and basically just means “a unique item that has only one owner.”
If this sounds a lot like an “object in the real world,” that’s because it is. Just like the shampoo bottle in your shower, or your car. It’s a thing, and it has one clear owner (you). In the case of the shampoo bottle, we all know you own it because it’s in your bathroom. For the car, we know you own it because the state government has a record of you on the registration (plus, only you have the key that starts it.)
An NFT is like the car registration, but for a computer file. We all know that if I have a digital photo or an MP3 and I copy it to you — by email or Dropbox or USB stick — then you also have a copy of it, and those copies are the same. Once I’ve copied you the file, I can’t be said to own it any more than you can.
An NFT means, definitively, that I own the file. Even if I chose to copy the data to you, I still “own” it as far as the rest of the world is concerned.