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“This is a revolution. I think we’re in a period of time that will be looked back on as probably greater than the Renaissance.”
That’s film producer and photographer Judy Lindsay, who styles herself “the Pied Piper of NFTs”. She is encouraging fellow creatives to get to grips with the newest, buzziest use of blockchain technology known. “I’ve never seen so many artists quitting their jobs, doing nothing but creating full time,” she says.
The NFT may revolutionise the art market, film funding and distribution. Or it might be an ecological disaster and a financial bubble, in which few actual movies change hands, and fraudsters get rich from other people’s intellectual property.
The F in NFT does not stand for ‘film’. NFTs are ‘non-fungible tokens’, which distinguishes them from fungible tokens such as currency, which are interchangeable with something of the same value. Each NFT (or ‘nifty’ or ‘crypto-collectible’) is unique, a string of letters and numbers on the blockchain ledger, which can be traded using cryptocurrencies such as Bitcoin or Ethereum. Some sell for astronomical sums. Images, text, apps and moving images can be encoded into blockchain but, mostly, NFTs are not the work itself.
“What you’re buying is bragging rights about owning something that exists conceptually,” says the filmmaker Adam Benzine, who recently put up for auction ten NFTs for his 2015 documentary feature Claude Lanzmann: Spectres of the Shoah. “I saw here an opportunity to marry the excitement of this new technology with something that is already established, prestigious and has pedigree, by virtue of the fact that it’s an HBO film, an Oscar-nominated film.”
Benzine hopes to exploit the NFT boom for good causes: to publicise his film’s video-on-demand release, to boost awareness of the Holocaust among young people, and to raise cash (“The first thing I would do would be to pay the crew who worked on my last film, The Curve”). He also hopes to make history, and dive head first into a new opportunity.
Low-budget filmmaker Nick Box hopes to quit the day job by tokenising his work, a continuation of his “punk rock, DIY approach to everything”. Having already made money transforming his films into games, he is looking for a new revenue stream, and the NFTs he sells can be as personalised as the customised VHS editions he has made for fans in the past. He is offering his less well-known films, such as art-horror Elevator to Insanity (2018), as “one-of-a kind items, and in a few cases even including distribution rights and copyright”.
When I spoke to Box, he was overwhelmed by the interest in the auction, though he had yet to receive a bid.
Jason Attar of NiftySplits is selling his own films as NFTs, but also offers public domain titles, such as Charade (1963), with a package of extras, a little like a special edition Blu-ray. Attar is exploring NFTs’ potential to help indie filmmakers. “I thought, ‘Oh, there’s a film distribution company here,’” he says. “If you box clever with how you create the content in the first place, then it should reach your intended audience and potentially new audiences as time goes on.”
Each NFT transaction is preserved on the blockchain, so each token contains its own record of who first minted it (not necessarily the person who created the artwork), and each sale. In most cases, purchasing the NFT confers no real-world ownership, in terms of media or copyright. If the seller wishes to throw these in as a bonus, they can, but they can’t be guaranteed in subsequent sales.
The benefit is that the creator receives a percentage of future transactions, so that you can recoup benefits in perpetuity, if you can set a price.
“It’s very difficult to come up with any kind of a metric for what is reasonable when people are paying $69 million for a jpeg and $590,000 for a gif of a flying Pop-Tart cat with rainbows coming out of its butt,” says Benzine.
Judy Lindsay is encouraging filmmakers to sell digital collectibles, such as artwork or sections of the film’s score, to raise money for new productions: a twist on crowdfunding. “NFTs are going to be the friends and family that fund all of our films from now on,” Lindsay says. “I think all my films are going to be fully funded by NFTs.”
More than one of the filmmakers I spoke to talked about the ‘gatekeeping’ of studios and distribution companies. Selling NFTs direct to audiences can remove those barriers to entry. Lindsay points out that the process cuts out percentages to agents and studios, but the ‘gas fees’ for each transaction (the charges you pay for minting, buying and selling NFTs) can be steep.
Fried green credentials
That is just one reason to be wary. James Ball, technology journalist and author of The System: Who Owns the Internet, and How It Owns Us, likens NFT trading to “the people who will sell you an acre of the moon. NFTs are those certificates. It just doesn’t actually mean anything outside of its own internal world.”
He is not alone in pointing out that NFTs rely on good will, and are thus easily exploited by fraudsters and scam artists. It’s too easy to tokenise someone else’s intellectual property, whether a tweet, a clip or, as one coder did, the Mona Lisa. Ball cautions that the middlemen making money from every transaction are those who will profit most. What looks like a get-rich-quick scheme should be viewed as a gamble, not an investment, he says.
Worst of all, NFTs are environmentally damaging, as the computing required to process the transactions, known as mining, uses vast amounts of power. “Don’t think of it as leaving the lights on in your living-room overnight. Think of it as leaving your oven on overnight,” says Ball. “That is the scale of how annoyed would you be, how wasteful would it feel.”
NFTs are mostly on the energy-intensive platform Ethereum, which Ball describes as “horrendous for the climate”. The good news is that there is a greener way to engineer the system (a model called Proof of Stake rather than Proof of Work), which is promised to come in soon. “The fact they don’t have to be so energy-intensive makes it less defensible, not more defensible,” Ball says.
Many NFT enthusiasts dispute the extent of the environmental impact, while others confess they rushed into the market before they were aware of it. Some NFTs have a carbon-offsetting donation coded into every transaction.
“I didn’t give it any more thought than having plastic DVDs manufactured,” Benzine says. As he points out, carbon-based DVDs will eventually deteriorate, but “NFTs are built on the bedrock of crypto technology, [which] suggests to me that actually there is a long-term value to this art form, that it will last.”
If NFTs have longevity, could they have an archival role?
“Archivists are interested in it, but I feel like that’s not where the fun in this story lies. It’s not in responsible archiving,” says Stephen McConnachie, head of data and digital preservation at the British Film Institute.
The authentication capacity of blockchain is attractive: “an attempt to really build trust as an unbreakable technological function”.
But NFTs are not suitable for a moving-image archive – a film, for example, exists in multiple files and so can’t be represented by one NFT. The tokens are really just a “glorified checksum”, McConnachie says, “a calculated identifier for a digital file. For digital preservation, that’s how you guarantee the file you stored in 2021 is identical to the file you get out in 2045.”
It would be unwieldy, risky and ecologically unsound to store an archive as large as the BFI’s on blockchain servers and McConnachie cautions against adopting unproven technologies. “The stakes are so high. If you get this stuff wrong, it’s not fun.”
Whether or not NFTs will stick around to revolutionise the industry is hard to call right now, a period that Attar defines as the experimental phase. Chances are this feature will be out of date by the end of the year, or even month. “Things move so fast in crypto that one year’s about a decade,” says Lindsay.
But I may be rich by then. Before we end our conversation, Nick Box gives me an idea: “Please say you’re going to sell this article as an NFT.”
A short history of NFTs
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NFTs emerged in 2017, with the blockchain game CryptoKitties, in which users could buy, sell, collect and even breed unique digital cats. The mania for the game was so huge it began to slow down transactions on the cryptocurrency blockchain Ethereum. In 2018, one kitty raised $140,000.
It’s useful to think of NFTs as trading cards. Each has a different value, based on the value of the work it represents and its scarcity value.
Now, NFTs are booming. A gif from ten years ago called Nyan Cat, a half-cat-half-Pop-Tart chimera emitting a trail of rainbows from its behind, exchanged hands in February for 300 Ether (more than $500,000). Nyan Cat’s creator, Chris Torres, tweeted after the sale: “I hope this inspires future artists to get into #NFT universe so they can get proper recognition for their work!”
The record-breaking sale is currently the token for an artwork called Everydays: The First 5000 Days by crypto-artist Beeple, which was auctioned at Christie’s. The winning bid for the digital collage was $69.3 million.
Celebrity is a huge factor: Lindsay Lohan and William Shatner are among those who have cashed in. When Lohan put a portrait of herself on sale as an NFT, she wrote: “I believe in a world which is financially decentralized and the power of dreams to be the core lightning network of humans.” She sold the token for $17,000; it was shortly resold for more than three times that.
American rock band Kings of Leon tokenised their latest album and musician Grimes has sold NFT art featuring her WarNymph avatar for $6 million. Twitter founder Jack Dorsey auctioned his first tweet with a price-tag of $2.9 million. Inevitably, influencers are the next wave trying to tokenise their own popularity.
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