NFTs and Electronic Media
by Tristan Onek
In April 2021, a digital piece of artwork was auctioned for $69.3 million at Christie’s auction house. The financial scale of this transaction baffled some onlookers who remarked that the image could have been copied and downloaded from the auction house’s website. The auctioned image was a non-fungible token (NFT), which is a kind of digital receipt that provides entitlement to some asset. NFTs are enabled through blockchains, which also underlie Bitcoin, Ether, and other cryptocurrencies. The increasingly complex relationship between electronic media and blockchains is highly polarizing; some individuals see entrepreneurial opportunities while others see problematic conflicts.
WHAT IS BLOCKCHAIN?
Blockchains are constantly expanding sets of verified records, much like a database or financial ledger. To prevent any one person or machine from controlling the records, blockchains exist across many servers. Since the data exists in many places, the different records must reach a consensus when any new data is added. Because this process ensures that a blockchain’s data is both safe and available, blockchains work well for cryptocurrencies and NFTs that seek to use them as a financial medium.
Constantly updating such a distributed network takes a major toll, however. According to Digiconomist, each Bitcoin transaction requires about 1773.49 kWh (kilowatt hours), which is equal to approximately sixty days of household energy consumption in the United States. This energy consumption scales rapidly when accounting for the increasing number of cryptocurrency and NFT projects. Blockchains ultimately fill a unique technical niche, but they come with considerable burdens.
BLOCKCHAIN ON ART & FINANCE
In 1994, the World Wide Web was launched as a new way to connect people through personal computers. Various forms of digital assets could now be easily moved around the world from one database to another via interlinked networks. Around the same time, artists began using the internet to create ‘net art’ which was a type of intangible artwork existing only within those old CRT monitors. PayPal launched a few years later in 2000, which set the stage for entirely digital financial transactions. As the new millennium began, there suddenly existed entirely virtual artistic communities and financial exchanges. The introduction of blockchain currencies would bring these two virtual entities together.
In 2008, Bitcoin was invented as a digital currency that people could exchange for goods and services. Bitcoin was built on top of a blockchain, which enabled it to take advantage of the decentralized and secure nature of blockchains. Bitcoin’s initial popularity and reception was limited but eventually found some mainstream significance in the mid-2010s while another blockchain-based project began.
In 2014, Kevin McCoy created the first NFT artwork entitled “Quantum”. Like cryptocurrencies, NFTs took several years to find mainstream appeal. 2017 was a critical year for both blockchain technologies, as Bitcoin experienced extreme price volatility and NFTs became more popular with the inception of the generative NFT artwork series entitled ‘Cryptopunks’. This generative art series was created by John Watkinson and Matt Hall and existed as a series of collectible digital images that could be purchased with cryptocurrencies. Different types of digital capital could now be exchanged without interacting with older currencies like US dollars.
Cryptocurrencies and NFTs both grew considerably between 2017 and 2021 with new projects bringing additional attention to the underlying blockchains supporting them. Since the value of both NFT artwork and cryptocurrencies fluctuate on open marketplaces like stocks and other investments, ownership of these assets is often highly volatile. The desire for NFTs and cryptocurrencies alike reached a fever pitch in 2021, with different Cryptopunks NFT collectibles selling for over $11.7 million and Bitcoin reaching $66,000. As 2022 looms on the horizon, the future of these blockchain assets remains as uncertain as any other speculative investment if not more so, without a governing body or organization to regulate them.
Ultimately, the lack of boundaries and rules with blockchain technologies cause controversial issues ranging from petty plagiarism to criminal offenses.
ONGOING CONTROVERSIES
Although blockchains enable many different successes, those successes do not exist without controversies. Issues exist on topics regarding intellectual property, originality, and criminality. Much of the disagreement and discourse occurs online where opposing parties share a common space on social media platforms and blockchain art auctioning sites.
One of many disagreements exists between generative artists and NFT enthusiasts. The Twitter account “ai_curio_bot”, known for producing AI-generated artwork, made a statement in October 2021 that their artwork should not be used for NFTs. Other generative artists have echoed similar requests that NFT enthusiasts create their own artwork instead of stealing art from others. Uncredited artwork is a chronic issue among artists, and NFTs provide an entirely new avenue for art to be plagiarized and sold without the original artist’s permission. This rift highlights an important consideration that some electronic artists wish to remain separate from any blockchain endeavors and would rather have their art simply exist as it is.
Another controversy within the blockchain space is with the concept of originality and how it relates to ‘generative’ artwork. Many independent programmers have started their own blockchain projects to propel their own NFT or cryptocurrency, but the result often looks like the most popular blockchain products with few distinguishable characteristics beyond slightly different designs, color palettes, and branding.
When browsing through ‘collectible’ NFT artwork series on auction websites such as OpenSea, many projects look vaguely like CryptoPunks or some other popular project that previously gained mainstream attention. Many projects claim to be generative, as their collectible pieces of art are all generated from a set of predefined attributes. These derivative artwork series showcase a collection of slightly different assets with different characteristics, but the differences often look like cut-and-paste efforts to generate as many products as possible. Although these projects are generative by technical definition, they lack the creative essence found in electronic artwork that produce complex generative imagery through mathematical and computational formulas. Lastly, given that many blockchain assets often sharply increase in value for no discernible reason, creativity and originality are possible barriers instead of virtues that delay eager developers from beating other developers in a fast-paced market.
Blockchain products can be a target for criminal operations due to their unregulated and decentralized nature. Although a major NFT artwork auction often signifies that blockchain technologies are mainstream among wealthy patrons, these auctions may instead be money laundering schemes which also happen with traditional art auctions. Additionally, blockchain scams occasionally originate with developers who abandon a project with all the invested assets at once, commonly known as a “rug pull”. Although the decentralized nature of blockchain implies that such issues should not happen, such scams do persist. Electronic media provides an ideal staging ground for blockchain crimes since criminals can attract victims with flashy artwork and then steal their cryptocurrencies once they are invested.
Although many arguments over blockchain technologies are fought with words alone, some people have turned to more unconventional strategies. When NFT owners post an image of their artwork, two common strategies are used to attack those posters. One strategy is to make a comment under the NFT poster such as “I want this on a shirt”, which summons a spam bot that will paste the artwork onto a shirt which can be purchased through an online store. Another cruder strategy is to download the NFT artwork, deface it with obscenities, and then re-upload it with the claim that the responder now also owns the NFT.
These tactics demonstrate that public perception is important in adopting new technologies such as blockchains. Although commenters know that they do not own an NFT by defacing a copy of it or having it printed onto a shirt, their trolling serves as a type of social commentary on how confusing blockchain assets are. Additionally, art museums and galleries spend considerable time educating people on the cultural significance behind artwork, and blockchain art cannot bypass this crucial socialization since many people continue to not understand the underlying technology that enables the artwork itself.
Ultimately, the lack of boundaries and rules with blockchain technologies cause controversial issues ranging from petty plagiarism to criminal offenses. If restrictions exist, however, then the decentralized nature of blockchain products which attracts many people could then potentially be made obsolete. Trying to reform or restructure a subculture that is based upon the principles of decentralization may be an inherently impossible task.
CONCLUSION
Art and money are no longer entirely physical mediums because technologies like the personal computer and the blockchain elevated them past their previous forms. Although interest in blockchains furthers innovation, it also leads to questions over who owns what and what ownership means. Blockchains provide a reliably decentralized service, but blockchain applications such as NFT artwork and cryptocurrencies make fictitious capital seem more fictional than ever.
Karl Marx originally defined fictitious capital to describe stocks and bonds, but it is now potentially worth reevaluating what capital itself is in the modern ‘information age’ when JPEG images are auctioned for millions of dollars. Blockchain assets provide access to a highly volatile market on the edge of innovation, but this excitement should not be at the cost of technological fanaticism that hurts honest artists, investors, and technology users.
Tristan Onek is a programmer, computer science researcher, and electronic artist. His research focuses on computational social science, social computing, and artificial intelligence. He has previously worked with the University of Southern California and East Tennessee State University on different computer science research projects. His algorithmic artwork has appeared with many organizations including Backslash Lit, New Media Caucus, SciArt Magazine, Long Con Magazine, and New York Artists Equity Association.