Using blockchain technology to own moments in history
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On June 30th Sotheby’s held an online auction offering an NFT representing the original source code for the Internet, as written by British computer scientist Tim Berners-Lee.
Approximately 9,500 lines of computer code constituting the original world wide web were immortalised as a Non-Fungible Token (NFT) in the blockchain. This was offered for sale together with a 30-minute animated visualisation of the code, a digital poster of the code, and a digital letter written by Berners-Lee in June 2021 reflecting on his invention.
Auctioned with a reserve price of just $1000 the NFT eventually sold for a high bid of $5.4 million. The price paid represents the premium that the new owner of the NFT presumably places on notionally ‘owning’ the moment in time when the Internet came into being.
The various use-cases for NFT technology are continuing to emerge. The sale of the Internet source code NFT demonstrates one further way that blockchain may yet be used — to irrefutably and immutably record moments in time. NFTs can be used to immortalise these moments as tokens that can then be bought and sold as desirable collectibles and status-symbols.
The rise of NFTs
2021 will be remembered for many things — in blockchain computing circles it’s notable as the year when NFTs came into the public consciousness.
In March, artist Beeple sold an NFT corresponding to a digital collage of 5000 images created over as many days — for $69.3 million.
Twitter founder Jack Dorsey auctioned an NFT representing his first Tweet, for $2.9 million
In April, 21-year-old Zoe Roth of North Carolina sold an NFT that had been minted on the blockchain, based on an Internet meme featuring an image of her as a child in front of a house-fire. Known as ‘Disaster Girl’, the meme-based NFT sold for $473,000 and paid off her student debt.
These three examples barely scratch the surface of the variety of ways that NFTs have been used to date.
Since reading about Beeple’s sale I felt compelled to dive headlong into the world of NFTs in a bid to understand them better:
I’ve tried to fathom their place in the world of art.
I’ve speculated on the diverse ways they could be used to tokenise an individual’s career as a means of being compensated for work.
With the sale of the Internet source code as an NFT, the potential utility of the technology is shown once again. It presumably appeals to those who seek the status associated with ‘owning’ a moment in time.
What do you really own with an NFT?
The concept of what an NFT gives the owner in return for the price paid can be difficult to conceptualise. As described above, the Berners-Lee NFT included various associated digital artefacts along with it.
In the same way, when I minted my own NFT on the Ethereum Blockchain — a token representing a digital photograph that I’d taken — it was my intention that the successful buyer would be given the original image file too. What’s crucial to note though is that it is only the token itself that is certain to remain unique and immutable.
The buyer of Berners-Lee’s NFT could theoretically create multiple copies of the digital poster and flood the web with them. Whoever bought my digital image could do the same. In each case the NFT itself remains forever one-of-one.
As such, the NFT itself isn’t so much about the ownership of the ‘thing’, but rather the status and kudos that comes from the ownership of the NFT associated with the ‘thing’ being irrefutably recorded in the blockchain for all time.
Indeed, where NFTs are used to tokenise physical items or real-world experiences it may be the case that the NFT cannot guarantee the future availability of the add-ins.
Rock group Kings of Leon were early to the NFT party, selling a series of NFTs targeted towards their super-fans. Their NFTs variously included special pressings of their newest record and other perks like front-row tickets to future concerts. While their NFTs will remain in the blockchain for all time with changes in ownership written into blockchain records, the physical articles themselves could get lost or destroyed over time. The band could break up, denying the NFT owner the chance to see them play. But the NFT remains.
An enterprising realtor attempted to sell an NFT of a digital rendering of a property in Thousand Oaks, California — the physical property itself was included in the auction price with the image. While the NFT and the digital art will exist in the blockchain for all time, the house itself could burn down in future or be razed to the ground by a developer. But the NFT remains.
These facets of NFT technology and its various applications may be seen as detractors or limitations, but in the case of attributing notional ownership of moments in time and history they seem to demonstrate utility. If the prices being paid for them indicate anything, then it’s that the right NFTs are desirable to certain buyers too.
Owning a moment in time
Consider the Jack Dorsey Tweet. The buyer can demonstrate irrefutably that they are the legitimate owner of that moment in time — the point at which the Twitter founder first used his creation to communicate to the outer world. He has minted the NFT and the sale to its new owner is logged in the blockchain.
But that doesn’t stop me or anyone else from reproducing the Tweet — here it is:
While the actual ‘thing’ itself is easily reproducible that’s not what the NFT is associated with — the NFT brings the status and the irrefutable ownership of the original, as notional as that may be. And this is the same as traditional ‘real-world’ art.
Take the Mona Lisa (for example) — the original article is owned and displayed in the Louvre gallery (at least, we’re led to believe that it’s the original that’s on display). The ‘thing’ itself can be reproduced easily, and has been many times on prints, badges, posters, tea-towels and numerous other items.
The status associated with ownership of the original in this case comes through having the physical item in the possession of the gallery. That has to be protected physically and securely. An NFT then is the manifestation of the ownership of ‘things’ that don’t necessarily have a physical form and cannot be held, touched or stored behind lock and key.
It’s for this reason that NFTs are particularly versatile and useful for logging, recording and protecting the ownership of digital and virtual media, whether image files, audio, movies or computer code like Tim Berners-Lee Internet NFT. It doesn’t stop the items from being duplicated but rather acts as a ledger of ownership and maintains uniqueness and non-fungibility.
The ethics of tokenising history
The notional sale of a key moment in time, as is represented by the code that started the engine of the Internet back in the early 1990s raises some concerns too. Berners-Lee has been keen to point out that his NFT doesn’t in any way compromise the open source ideals that are at the foundation of the Internet — indeed, the actual original source code itself is not included with the NFT.
In a recent article in Wired Magazine entitled ‘NFTs and AI Are Unsettling the Very Concept of History’, writer Rick Prelinger posits that:
“Nothing could be a greater cultural and ethical shock to archives than NFTs.”
He goes on to argue that monetizing historically significant holdings by minting them and their associated artefacts as NFTs could theoretically make important documents less accessible to genealogists and other scholars who don’t have access to the money required to buy or access associated NFTs.
The degree to which this becomes a problem remains to be seen and will likely depend on the extent to which creators seek to immortalise moments in history as NFTs for monetary gain. While a few opportunists may see the Berners-Lee NFT as a prompt to create and sell their own NFTs, it’s long-term trends that really matter.
Weekly NFT traded volumes — Source: theblockcrypto.com
As data from theblockcrypto.com shows, around the time of the Beeple sale interest and corresponding traded volume of NFTs spiked, but then gradually declined again after March 2021 as the hype died down. It spiked again at the end of June but we may reasonably expect that volumes will diminish once again in the aftermath of the Berners-Lee sale.
What happens next?
As the chart above demonstrates, the volume of traded NFTs has grown parabolically since the start of 2021 — it is indicative of a marketplace still very much in its infancy. It’s also likely that hype and enthusiasm are drawing creators to mint their own NFTs just as buyers are getting into NFT ownership driven by FOMO as much as out of a genuine belief in their underlying value.
How things unfold remains to be seen, but there must certainly be a number of moments in history that would no doubt draw a great deal of interest from potential buyers:
The moment when Satoshi mined the first Bitcoin
The first email sent
The first time someone ‘liked’ a Facebook post
The first online dating ‘wink’ that led to a marriage
Time will tell just how many of these moments are immortalised to the blockchain, and how much buyers are willing to pay to own them!
Note: This article is for informational purposes only. It should not be considered Financial or Legal Advice. Consult a financial professional before making any major financial decisions.