My take on NFTs

In recent months, an "innovation" has been shaking up the world of culture, and more particularly artist communities. For several months now, NFT (Non-Fungible Tokens) have been spreading in these circles, as they are seen as a way to buy and sell artworks. Reactions are very divided: some present them as a great revolution in the art world and are very enthusiastic, while others see it as the incarnation of the evil, with all its problems. But generally speaking, all artists have heard of it, and almost everyone has an opinion on it (positive or negative).

As I looked into the technical aspect of NFTs, and I therefore have my opinion on it, which I will elaborate on: NFTs applied to the art world do not bring anything new and innovative, and are just a trend that will fall into disuse - or at best be relegated to a niche market - within a few years.

NFTs: what they are, and how they work

You may be familiar with the concept of blockchain. I am not going to explain it in detail here, as it is a technical and a long topic, which actually deserves a dedicated article (maybe I will do one).

To keep it simple, a blockchain is a kind of database, where we will add blocks of data one after the other (think of an Excel sheet: there is a defined number of columns, and a virtually infinite number of rows, and each time we add data, we add a row). The particularity of this database is that it is impossible to modify a data block once it has been written (not even a single character!). The point is that the database can then be distributed publicly, and anyone can read it and add new data. It is therefore a decentralised database (as opposed to a centralised database which is managed by a single entity or company).

Cryptocurrencies, such as Bitcoin for example, are based on the concept of blockchain: each block of the Bitcoin blockchain represents a transaction, and by reading the entire blockchain, a digital wallet manages to "reconstruct" the entire Bitcoin monetary system, and thus calculates how much we have on our "account". So, in the context of Bitcoin, what we will write in the block is an instruction like "account 84df8d7bd7438 sends 1 bitcoin to account be560c42793b29". (Of course, you cannot create a block saying "I give myself 999999 bitcoins", there are verification mechanisms to prevent this)
Why do cryptocurrencies use a decentralised system? Because not relying on a central authority can be a huge advantage: you are not dependent on it, you are not affected by its possible failures, and it is much harder to compromise the system (since there is no longer a single organisation to hack). Since cryptocurrencies were originally intended to be an alternative means of payment independent of a central authority (and still are), the blockchain solution was therefore obvious.

What does this have to do with NFTs, you might wonder? NFTs are also based on the blockchain concept. The only difference is that the instruction we are going to write is something like "Mr John Doe bought the artwork n°2d82837e from Mrs Jane Doe, and is now the owner of it.".
A particularity of NFTs is that they are bound to an identifier (which can represent an object, material or not), and that there can only be one NFT for each identifier, which is therefore unique (hence the "non-fungible"). This is therefore very useful for "attaching" a unique NFT to a specific object.

Summing up, then, NFTs are a method of certifying that one owns an item, using blockchain technology instead of relying on a certified actor to deliver that certification.
That's it. That's "just" it.

In the context of works of art, NFTs are used as "title deeds" to prove that one is the owner of a work of art (but not only, as we will see right after...)

We are the "owner" of the work... and then?

Lately, we have seen a wide variety of unexpected, even surprising, things being sold through NFT. Artists are selling their fan art with NFTs, Reddit is selling unique avatars through NFTs, already-written tweets are being sold through NFTs, and there are even internet memes sold by NFT, such as this famous photo sold for $74,000:

But in practice, what does it mean to "buy a meme" or "buy an avatar"?

It means that when you are going to buy this image, it will be written in a blockchain that you are the owner of this image. Better yet, the sole owner, because NFTs are by design unique (it will be impossible to create another record referencing the same image without "undoing" the previous one). At this point, you are probably thinking "what is the point of being the official owner of a meme or tweet?" Well... not much. Being the owner of a digital object in NFT, in absolute terms, does not prevent this file from being able to continue to circulate on the Internet, and to be copied at will (as a proof, I posted the meme of the girl just above, even though I am not the owner...).
Even if we accept that the owner of a work bought by NFT is recognized as an owner from a legal viewpoint (which, to my knowledge, is not yet the case) and that he does not want this image to circulate on the Internet anymore... he can always take legal action, but can you imagine doing that repeatedly until the image disappears completely from the Internet? Especially since we know very well how the internet tends to react when something is censored...

In fact, in the end, the only use of buying an NFT in this context is just... to be able to show off. To be able to say "I own that tweet!". Since it does not prevent unapproved reuses of this thing, either technically or legally.
Another use that some people see for NFTs is to speculate: to buy title to property in the hope of selling it for more later. But since NFTs do not really have any value apart from what you want to give them (yes, because even crypto-currencies have intrinsic value: their primary purpose is still to serve as a payment unit. But NFTs? ...), it is a very risky investment and tends to attract scams.

Useful for small artists? Maybe, but...

From a more mundane perspective, one could argue that NFTs can be useful to small creators (typically, the average artist posting on Tumblr or DeviantArt). NFTs could provide irrefutable proof that someone who has paid for a commission is indeed the owner of the work, and can therefore do whatever they want with it: this would therefore be useful, especially if the author of the work disappears or comes into conflict with the buyer and decides to "steal" it.

But, beyond the problems mentioned above, there is also another major problem with NFTs. Remember, I said earlier that NFTs are, by nature, a decentralised technology. This implies that anyone can potentially make a write to the blockchain, and write whatever they want... so the problem easily appears. Then, what is going to stop someone from taking an image (let us say that one for example) and writing in the blockchain that they are the owner of that image, unilaterally?
Or even worse: let us say an artist does not sell their artworks in NFT, but someone decides to write that they are the owner of that work, without the artist's consent. Do not laugh, it is a problem that is clearly recognised and known today, so much that it led DeviantArt to develop a tool that alerts the author of a work if their work ends up on an NFT buying/selling platform:

That problem could be partly solved by establishing trusted actors, whose "word" would be more valuable than anyone else in the NFT ecosystem. But this also does not guarantee that this kind of abuse will not exist (it depends on the platform's willingness to moderate its content and check that works are not illegitimately offered for sale), and it has the paradoxical effect of reintroducing centralisation into a system that was intended to be decentralised.

This leads me to...

Where is the real innovation in this?

Some people present NFTs as a revolution in the art world, arguing that it will change the way artists make a living, the relationship that "consumers" have with art...

However, I do not agree with this at all. Indeed, if one wants to certify something digital (like a sentence saying that someone owns some item...), it has been possible for decades, thanks to cryptographic certificates. In the digital world, we need to certify a lot of things, so cryptographic certificates are massively used. By the way, if you are reading this very web page in HTTPS right now, it is thanks to a cryptographic certificate! It guarantees that the encryption key used to encrypt HTTPS traffic is actually mine and not someone pretending to be me.

In fact, the only difference that NFTs make is that this certification is no longer dependent on one organisation, but works in a decentralised way, which avoids some of the problems I mentioned above. But given that, as said in the previous section, we will still need trusted actors, it is a snake biting its own tail, and so the value of a decentralised system falls almost to zero.

But in the end, are NFTs something to throw away? Would not it be useful in some contexts?
I have no doubt that good applications can be found for NFTs. Being able to certify possession of something without the need for a central authority has its advantages, and it has potential in some areas. But in the art world, I do not think NFTs will become a reference, for all the reasons I mentioned above.
Will NFT continue to exist as a niche? Maybe. Is it the revolution that some are predicting? Certainly not.