Earlier this month, Twitter co-founder Jack Dorsey announced he was selling his inaugural tweet, in an auction scheduled to end on March 21st, the fifteenth anniversary of Twitter, with proceeds donated to charity. At the time of writing, the highest bid is $2.5m.
The contents of this tweet, you ask? “just setting up my twttr”.
That’s it. That’s the tweet.
The auction is the most outlandish use to date of non-fungible tokens (NFTs), a craze which – from video basketball trading cards to William Shatner memorabilia – is revolutionising the collectibles market. NFTs are digital entries on the blockchain – the technology used by cryptocurrencies – and thus cannot be altered. Each token is unique, and the purchaser receives no physical copy. Once Dorsey’s tweet has been sold, it will still be accessible to anyone online who wishes to view it, free of charge.
Much like Bitcoin, the NFT market is booming, having grown by more than 705% in three years to $338m, according to Forbes, as tech entrepreneurs scramble to invest in rival auction services. That growth is snowballing in 2021, fuelled by ludicrous price-tags like the $69m just paid for a .jpg file at a Christies auction.
While these tokens may seem to appeal only to millionaires with cash to burn, NFTs could play a pivotal role in the future of digital media. The technology offers a secure route for creators to sell their work, with buyers safe in the knowledge that they are receiving an authentic item. If the owner sells on their token, the original artist receives a cut, as they do for each subsequent sale, creating a continuous source of income not afforded by physical art.
After a decade of creators protesting over lost revenue fuelled by the rise of streaming services – an issue only exacerbated by the pandemic, as shops shuttered and venues closed – NFTs may offer musicians an opportunity to claw back lost royalties. The acclaimed group Kings of Leon are among the first to experiment with the technology, releasing a version of their album this month exclusively as an NFT.
Print media, too, may look to adopt blockchain technology. Fuelled by a near-terminal decline in advertising revenue, many titles have sought to implement paywalls, with varying degrees of success. NFTs could offer an alternate source of revenue for publishers, where consumers participate in microtransactions for individual articles.
While NFTs represent only digital works for now, this could change. In 2019, Nike obtained a patent which allows it to create blockchain-compatible trainers – where the token would serve as a digital certificate of the shoes’ authenticity. Should Nike’s experiment prove fruitful, other brands will surely follow.
The use of non-fungible tokens is not without controversy, however. Far from a sustainable breakthrough, the carbon footprint of producing an NFT is enormous – one piece of digital art created by the musician Grimes produced an estimated 70 tonnes of CO2 emissions. Furthermore, like any booming market, the risk of investing in NFTs is substantial: many in the financial world have long predicted that the blockchain bubble would burst in much the same vein as the dotcom bubble of the early 2000s. So far, their predictions have come up short.
Whether the recent NFT craze will have a lasting impact on the digital media industry remains to be seen. Yet, after a year in which almost every aspect of life was forced to adapt to a new digital normal, brands should turn a blind eye to this latest trend at their peril.