NFTs : Alice down the rabbit hole
Commonly observed showdowns between art and high tech seldom occur between digital artist and the digital world. But add a new emerging technology — the believers, the antagonists, the skeptics, the supremacists — and the scene changes dramatically.
So lives the ecosystem of a technology known as NFTs (abbreviation of Non-Fungible Tokens). To understand it as clearly and simply as possible, I invited an expert: André Franco, editor-in-chief of Crypto Talks, a publication of over 200,000 subscribers. I presented the topic to Mr. Franco through the lens of an artist, whom we’ll call Alice.
A young freelance software developer for companies in the Digital Port of Recife, Brazil, Alice sketches 3D digital figures of loving colors as a part-time job to supplement her income. This second job, however, presents obstacles to an introverted person like her: pressure from commercial agents, disorderly management disputes and, often, the devaluation of her art.
Her most serious and purely artistic dissatisfaction originates from artworks commissioned according to stylistic requirements defined by the end customer (whose identity she rarely knew, among so many intermediaries). To meet such requirements, her artistic spirit was often corrupted.
Through 2020, Alice became acquainted with a technology with the strange name of ‘Non-Fungible Tokens’, or ‘NFTs’. The ability to fully replace a 10-dollar bill with two 5-dollar ones, for instance, is what makes money ‘fungible,’ she learned. Her cell phone’s unique serial number makes it non fungible item. She can get it sold or traded for a similar model, but never replaced wholly by an identical one. Similarly, her artwork is exchanged for money or given up for something else, but never substituted entirely by any other exactly identical item. So, her art designs and her cell phone fall into the ‘Non-Fungible’ category.
The (non-fungible) token — where her art gets introduced and displayed — is a security and coordination layer produced from (and laid over) a digital bookkeeping record called ‘blockchain.’ Once the token was produced (or ‘minted’, the most used term), her artwork was displayed and put for sale in e-commerce NFT marketplaces inside the blockchain but accessible online. These e-commerce marketplaces are similar to eBay in look and feel, but with a distinctive quality: through this NFT token, Alice directly manages digital creation, digital ownership, presentation, and means of transferring her designs within the blockchain network directly to customers registered there (there are hundreds of thousands).
One day, Alice hesistates. The NFT hype seems too good to be true. She feels she is descending into a rabbit hole which could transport her to frightening situations. Alice’s name is fictitious, but her story is not.
1. Advantages. Mr. Franco, in your opinion, which artistic profiles would most benefit from the apparent advantages offered by blockchain-based tokens, such as NFTs (autonomy in managing digital creation, digital ownership, cutting out the middlemen, managing the transferring and life-cycle of her work)?
R: I think that every artist, be it a producer of digital or physical arts, could benefit from this new technology. Those using the mouse as a brush may find a smoother transition to it, as understanding the digital world is much simpler for them.
I also believe that more traditional artists would find a beneficial to sell tokens tied to their physical artworks (for example, through high-resolution photographs of their physical artworks linked to the NFT).
The fact remains that NFTs represent a new paradigm for artists, who now have the technical option to eliminate intermediaries and connect directly with fans registered on the blockchain.
2. Safety of Alice work. Alice followed the cheapest way of producing NFTs called ‘Off-Chain’: the token created within the blockchain record contains a link to an internet data storage outside the blockchain (hence the term ‘off-chain’) like iCloud or Dropbox. In this way, the token and the link to Alice’s Dropbox live inside the blockchained bookkeeping, but the artwork file does not. Mr. Franco, do you believe this model could in any way threaten the safety of Alice’s work?
R: I wouldn’t think so, because current buyers of art via NFTs already understand the dissociation between the art displayed by the NFT (the underlying artwork), on one hand, and the registration that secures the digital ownership of NFT itself, on the other. For them, the NFT is the official digital record, regardless of where the underlying artwork is actually stored.
Nevertheless, as decentralization advances in our centralized world, in the future new buyers might prefer to have their digital works stored on decentralized storage platforms.
3. Safest storage alternatives. Mr. Franco, for many artists who do not have the resources to represent all their art within the blockchain, what would be the safest storage alternatives?
R: I believe that storing on platforms like iCloud or Dropbox is not a bad idea at this stage. It is the cheapest way to store tokenized artworks. In the digital world, anyone can have an image of the art itself, but only the token holder can claim its ownership in terms of its origin and its life-cycle within the blockchain bookkeeping (in the strictly copyright sense, of course, the buyer must do his due diligence to make sure the NFT issuer has good title to the tokenized artwork).
4. Cost of producing the token. Even adopting the cheapest procedure previously described, the transactional cost (popularly known as ‘gas fee’) of minting the token was still high for Alice. In social forums, she heard about alternatives that could be more affordable than ‘Ethereum’, the blockchain most commonly used to mint NFTs. Mr. Franco, is there a reliable alternative to Ethereum for cost savings?
R: There are other blockchains focused on NFTs that aim to be cheaper than Ethereum for issuing assets, but they are still under construction. What looks most promising at the moment is Flow’s blockchain, but it is not yet ready to enable artists to issue their tokens from it.
Meanwhile, the Ethereum community is aware of the problem of cost and scalability of the network and has been planning to implement both definitive and palliative solutions to pave the way towards a cheaper and more democratic network.
5. Proof of origin. Having inherited her artistic talent from her late great aunt, a well-known painter, Alice planned to introduce her great aunt’s paintings into NFTs using high-resolution photos. Do tokens or blockchain-based programs provide Alice with proof of origin and authenticity of the digitized paintings, considering that many of the related physical archives were either lost, or remain in non-digital material?
R: In this case, I don’t believe there is a solution that is completely reliable, as integration between physical archives in the real world and the blockchain is very difficult to perform without friction and without a centralizing agent.
6. Recommendations for emerging artists. What would be the three main recommendations you would give to emerging artists willing to venture into the crypto world (digital assets protected by cryptography, a security technique), in general, and the NFT space, in particular?
R: The ideal pathway would be to understand the concept of NFT first, then venture to sell their exclusive art using this medium. Ideally, at some later stage, artist would be able to propose improvements to the technical process as well. As for the practical steps, I would start by using the Ethereum blockchain at first and experiment with it. Subsequently, artists should be encouraged to explore alternative NFT-focused blockchains like ‘Flow’.
