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NFT | Non-Fungible Token
NFT | Non-Fungible Token

NFTs: Can They Help You Sell Digital Memorabilia Online?

Non-fungible tokens (NFTs) like Jack Dorsey’s first tweet or Michael Cohen’s prison badge are creating a new market with a need for new rules

At COSM 2021,William Dembski, a mathematician and philosopher who studies cryptocurrencies like Bitcoin and non-fungible tokens (NFTs), offered some thoughts on whether NFTs (non-fungible tokens) can help artists and other creators make a living selling their work on the internet. Are NFTs just “rat poison squared,” as Warren Buffett calls cryptocurrencies? Well, former Twitter CEO Jack Dorsey’s first tweet sold for a reported $2.9 million. It’s complex but navigable. According to Dembski, it might be a way forward. But there are pitfalls.

William Dembski

The non-tech part is easy to understand. Just as internet-based subscription services like Substack offer a way for talented writers to make a good living free from censorious mediocrities, so NFTs might help artists market their work in an age when mere copying is easier than ever. The devil is in the details, as he explains.

What can you sell? In his talk, November 10, Dembski cited Bernard Fickser at Expensivity, who created and offered a unique item: an original montage of the Democratic primary in Iowa in 2007, assembled from privately owned photographs taken locally.

Think no one would buy it? An animated gif of a cat sold for more than $500,000. Michael Cohen plans to sell his prison badge as an NFT at a Miami art auction.

A digital signature authenticates ownership of the unique item, which the producer is not allowed to copy. With so much time spent on the internet, many people may have unique digital items which someone with money to spare would pay for if the uniqueness can be assured.

Dembski identified two big problems to start: A minor one and a major one. The minor one is that NFTs are closely tied to the Ethereum blockchain (private digital currency). Ethereum charges gas fees for transactions and it is slow. (“It takes about 13 minutes to upload a one megabyte JPEG”).

The major problem: In what sense do you own an NFT that you bought? Dembski asks us to consider Jack Dorsey’s famous (and expensive) first tweet: “ … at the end of the day, what we’re dealing with is a digital file and digital files can be copied at will with full fidelity. It’s not like a piece of artwork, physical artwork where any copy is not going to be identical with the original.” That’s where the blockchain’s public and private cryptographic keys come in, where the private key provides a signature. So far it sounds good but he notes, “Anything that can be done digitally once can be done digitally again… So what is to prevent Jack Dorsey from taking that first tweet and deciding to sign it again and resell it?”

The fact that Dorsey is unlikely to do that is not the same thing as a reason why he can’t.

Dembski went on to suggest a protocol that would transfer real ownership:

Here’s a brief summary:

➤ An anticipatory identifier (hash) should serve as a digital fingerprint. So it’s very clear who owns the digital asset. It can later be associated with any blockchain and the public key can be advertised, tied to the owner’s identity.

➤ If a digital asset is offered for sale on eBay, enabling payment in dollars, accurate timestamping and a record of transactions is needed for auctions, etc. (eBay keeps a record of transactions for only 90 days and Dembski hopes they’ll upgrade that.)

➤ The NFT is both the digital asset and a transfer of ownership agreement. For security, it requires a hash. Hashing compresses data in a way that creates a unique “fingerprint” for the file, the way a person’s fingerprint is unique. (TechJury) Dembski stressed that the NFT is not just the digital asset but the asset and the ownership transfer together. Together, they become a fully negotiable instrument. “So it’s not just what I would call phony baloney ownership on various crypto currency blockchains but real ownership in the real marketplace.”

Jules Urbach

Jules Urbach, founder of OTOY, a firm that seeks to open up the digital universe for artists largely agreed with Dembski: “ … the points you brought up are absolutely valid. I do think there’s some newer technology… that can make this thing work better on ‘chain but everyone wants Dollars, in Dollars out.”

Dembski thinks that the participation of well-known figures in the arts will hasten the day that the systems are made more secure and user-friendly.

Taking up the theme, tech philosopher George Gilder, a moderator, noted a key point in closing: Buying an NFT is not just buying a particular digital file: “You’re buying a participation in a community and future events and access to the artist, often.”

It amounts to buying an experience divorced from physical assets. He acknowledges that, when it comes to making that work, the devil is indeed in the details and “there’s a real devil here.”


You may also wish to read: How to create non-fungible tokens (NFTs), simplified. While still deeply skeptical of what ownership of an NFT really means at present, Fickser decided to experiment with creating, buying, and selling NFTs. Bernard Fickser offers a step-by-step explanation, offering an original montage of the Democratic primary in Iowa in 2007 for sale as an illustration.

and

How can non-fungible tokens (NFTs) be made to work better? Bernard Fickser offers twelve steps to handling NFTs in a way that dispenses with cryptocurrency-based blockchains and works in ordinary online marketplaces like eBay. In Fickser’s view, NFTs can work if they avoid self-serving cryptocurrency blockchains like Ethereum and enable real-world legal transfers of ownership.


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NFTs: Can They Help You Sell Digital Memorabilia Online?