Robbie Barrat is an artificial intelligence researcher and artist. His works harness the power of neural networks and question the creativity of machines. Of course, he very quickly became interested in “NFTs”: this technology makes it possible to sell and buy digital objects – virtual works of art, collections, images, sounds and other objects – in a decentralized and presumably secure way. Back in 2018 he partnered with Christie’s, the famous auction company, to offer 300 gift cards to event attendees, allowing them to collect an exclusive NFT from the artist. Problem: Most of those present had no idea what an NFT was. Only twelve of them eventually claimed due and the other works were probably lost (the card code was not used). The story of the “Lost Robbies” has become a popular anecdote among digital artists, as a symbol of the traditional art world’s inability to take an interest in the digital revolution.
Three years later, NFTs are exploding in popularity and have taken the art world by storm. French start-up Sorare, which is developing an online football game juggled with NFT, has just received $ 680 million (about € 580 million). This is the largest fundraiser ever by a French start-up. But while the NFTs are fantasizing, Robbie Barrat has given up on everything. “I don’t want to do NFT anymore until the environmental and speculative issues are resolvedhe wrote on his Twitter account in April. Nobody talked about my work, except to discuss the price […]. It’s as if my work is no longer art “. This crisis of faith is a good example of the concerns caused by this seething market. There are those who see in NFTs the future of art or intellectual property and, more generally, a new technological frontier to cross. Others criticize an absurd, even dangerous speculative race for the planet and society.
Contemporary art and “shit mail”
NFT stands for non-fungible token, or non-fungible token in good French. Specifically, it is a data file that represents a digital object, stored on a “blockchain”, a decentralized and secure information storage and distribution network. Unlike a cryptoasset, such as a bitcoin, an NFT is unique. It cannot be exchanged for another, while one bitcoin is worth another bitcoin. This uniqueness encourages transactions. With an originality: With a few exceptions, when you buy an NFT, you actually acquire data that proves you own it, not the object itself. If you are the proud owner of Nyan Cat, a popular online video of a 2D cat galloping into space whose NFT sold for $ 500,000, nothing will stop people from continuing to share the happy feline GIF.
Although NFTs are intrinsically linked to cryptocurrencies (most of the time, they are bought through the Ethereum blockchain, with its means of payment, “ether”), experts in the sector, albeit accustomed to the roller coaster of cryptoassets, are quite overwhelmed by their success. “We are currently witnessing a purely speculative race, believes Grégory Guittard, publishing director of local newspaper, French-speaking media specializing in cryptocurrencies. It is up to those who manage to find the least known, oldest or most absurd project, which risks exploding in a few months. Because while NFTs have been trading for several years, it was in 2021 that their popularity really took off. They first developed in the contemporary art world, giving rise to record transactions, such as Every day: the first 5,000 days, a work by the artist Beeple, sold by Christie’s for 69.3 million dollars (about 59.2 million euros). But NFTs are also practiced by an audience more accustomed to the culture of the “shitpost” (absurd jokes online) than to the intimate atmosphere of the auction rooms. Witness, for example, the recent success of NFT avatars, images with various themes (pixelated punk faces, cute cats, etc.) that are accumulated and exchanged, sometimes for very large sums. Between the 2.0 stamp collection, financial investment and identity claim. The avatar then becomes a community membership badge, which is proudly displayed on its social networks. Even if, as with works of art, the speculative aspect is never far away. At the end of August, Visa purchased a CryptoPunk, particularly popular avatars, for around 130,000 euros, to add to its collection “artifacts that have marked the history of money and commerce”.
NFTs are also making a notable foray into the entertainment industry, such as music (Booba just announced the upcoming release of a new song. “available exclusively” in NFT), video games or sports. On Sorare, the start-up that has raised record funds, you can form fictional football teams by purchasing virtual tiles that represent real players, then score points based on their real performance. While it is possible to play without NFT (with a credit card or even without spending any money), Sorare has clearly benefited from investors’ appetite for this new technology. “We quickly became convinced that the specific characteristics of NFTs [rareté digitale, traçabilité…, ndlr] would have led to a technological change with the same impact on our lives as the arrival of the Internet or the smartphone “says Nicolas Julia, co-founder and CEO of Sorare.
Ecological and ethical debates
The sudden rise of the NFT market, however, raises serious questions. The first, the most sensitive, is that of environmental impact. NFTs, in essence, are energy-intensive. Many of them are based on the Ethereum blockchain. The latter is based on a “proof of work” system (literally a proof of work), which guarantees the security of transactions. Each exchange must be verified by other users of the network, called miners, whose computers solve very complex formulas to obtain this authentication. It is this mining activity that consumes a lot of energy. This problem is not specific to NFTs – any business that relies on a blockchain using a “proof of work” is affected. Cambridge University estimates that the creation and spending of bitcoin in one year consumes more electricity than Finland. This represents approximately 0.45% of the world’s annual electricity expenditure.
However, it is very difficult to calculate the carbon footprint of blockchain-based businesses, or NFTs, due to the opacity of miners’ activity. We generally do not know their exact electricity consumption and the type of resources (renewable or not) they use. But ecology remains a major point of tension and an inexhaustible source of conflict between professionals and anti-NFTs. Some industry players are therefore trying to answer the problem. Several blockchains (Flow, Tezos) prefer the “proof of stake” method to authenticate their exchanges, which is much less energy-intensive. The Ethereum Foundation also announced that it intends to switch to this system. This process may take some time. The risks are considerable, even for NFT holders: if the procedure goes wrong, some tokens could simply be lost, made inaccessible in the blockchain.
The debate on NFTs is also ethical, even philosophical. Should a butt-shaking GIF of Pepe the Frog (famous internet meme) really sell for $ 9 million? The pro-NFTs will answer that it is the principle of every collection: it is the market that decides, and the people who buy these objects have the free time to believe, or not, in their value. This year, for example, speculation about Pokémon cards has exploded. So why not around virtual tokens representing footballers? “Human beings have always loved to collect and some are willing to spend more money than others. Should we limit the price of what men want to collect? I’m not sure,” esteem on your part Nicolas Julia. However, the explosion of NFTs is taking place in a particular context: the cryptocurrency market has never been higher, and has benefited from an inflow of liquidity linked to the Covid-19 crisis. It is no coincidence that traditionally wealthy sectors – such as football or contemporary art – have become interested in NFTs rather than Pokémon cards.
“A money making machine”
On the artistic side, the most optimistic see tokenization as a way to give back power to creators, who can generate income more easily thanks to their digital works and benefit from the protection of an infallible contract (because it is registered in the blockchain). The reality soon turned out to be more complex. The artists saw their works stolen and sold in NFT without their permission. For buyers, NFT thefts and scams are common. Finally, others fight the very philosophy of this technology: why impose artificial uniqueness on online works, when the Internet has always been the realm of free sharing? “This NFT trend might seem like a technical revolution, but in the end it’s more of an involution. It is a return to an old conception of intellectual property: we recreate the rarity in front of the copy, explains Laurence Allard, professor of communication sciences at the University of Lille and researcher at the University of Paris 3 – Ircav. The Internet used to be a duplicating machine and it is becoming a money making machine. “
In this sense, NFTs are perhaps part of the vast monetization movement of web and internet users. Today you can post a video on YouTube, get started on OnlyFans, stream a video game on Twitch, and make money. And tomorrow ? There are already examples of NFTs that have nothing to do with artwork or avatars. The American platform Mirror.xyz, for example, offers authors the possibility of transforming their writings into NFT and “Monetize their thoughts”. In May, model Emily Ratajkowski put up for sale an NFT linked to a photo of her taken without her consent, in order to “take back control [son] Image”. And in the United States, a couple got married by trading NFTs as wedding rings. If NFTs were essential in our daily life, we can imagine that one day everything could be “undermined” (registered in the blockchain): our artistic productions, but also our relationships, our consents, our opinions, our online influence … “NFTs are part of a global financialization movement, concludes Laurence Allard. It is a way to redescribe any practice as an investment, in which money can be invested.