On March 21, 2006 Jack Dorsey, the co-founder and CEO of Twitter, tweeted “just setting up my twttr.” It was his— and the world’s— first-ever tweet. Almost exactly 15 years later, that tweet -- which can be seen for free by anyone with internet access -- was sold as an NFT for the equivalent of $2.9 million.
Last month, Super Bowl champion Rob Gronkowski announced he is launching digital trading cards and selling them as NFTs. Two weeks ago, Saturday Night Live dedicated a rap video to explaining and making comedy out of these non-fungible tokens.
Recently, NFTs, or non-fungible tokens, gained widespread attention in popular culture and the media. They have entered the worlds of entertainment, sports, business and now, even journalism. In 2020, the NFT market brought in $250 million in sales, according to a report by Forbes.
“I think [the recent prominence of NFTs] just reinforces the fact that everything is going digital,” said Carly Shihadeh, a recent USC Annenberg graduate who now works as a podcast producer and social media coordinator at Why Not Now? Media. “But I think we already knew that and were taught that in school.”
A non-fungible token is a digital record. More specifically, it is code that lives in a shared ledger called the blockchain that certifies a piece of digital work as authentic and unique.
If something is fungible, that means it can be replaced with another identical item or one of equal value. A one-dollar bill, for instance, is fungible. It can be exchanged for another one-dollar bill.
A non-fungible item is something that has unique or distinct properties and cannot be replaced or exchanged with another item.
Essentially anything on the internet can be viewed, copied and widely spread. But a non-fungible token attached to something on the internet, or the digital sphere, proves the work is the original and establishes an owner of the piece.
When someone purchases an NFT, they are purchasing a digital asset that can be bought and sold.
To sell an NFT, one must create an original piece of digital work. That piece of work is then uploaded onto the blockchain where the owner can set a minimum price it will accept for the NFT and a royalty percentage. Once fully uploaded, there is an auction— completely managed by computers— in which people can bid on the NFT. At the end of the auction, the NFT goes to the highest bidder.
The digital piece of work can be anything from a graphic to a video to— as recently shown by New York Times journalist Kevin Roose— a piece of journalism.
Roose, a technology columnist for the New York Times, wrote a column about the growing prominence of NFTs. He decided to make that column, titled ‘Buy This Column in the Blockchain!’ into an NFT itself. He put it on the blockchain and within 24 hours, the NFT of his New York Times column sold for 350 Ether— the cryptocurrency used for the auction and the equivalent of about $560,000.
Roose donated the money to The New York Times’ charity, The Neediest Cases Fund, but his NFT is one of the first examples of a journalist selling his or her work as a non-fungible token.
“It’s cool to see a journalist utilizing the digital space and making money off of his talent and work,” said Shihadeh, “especially in an industry that is not known for being very profitable and especially because he donated the money to charity.”
Gabriel Kahn, who worked as a newspaper correspondent and editor for three decades and runs the Media, Economics and Entrepreneurship program at USC, said he does not think NFTs will be a consistent revenue stream for journalists or anybody else. However, he noted the front pages of newspapers have historically been important documents carrying meaning and monetary value.
“Whether that is done in a digital format or as a physical representation of a printed newspaper,” Kahn said. “Both have value, both have different aesthetics and guidelines but they are important records that commemorate a moment in time.”
The concept of traditional, physical art can aid in the explanation of the idea of NFTs. The Mona Lisa, for instance, can be viewed by anyone visiting the Louvre Museum. Anyone can take a picture of the Mona Lisa and post it to the internet, where it can be copied and spread, but there is only one authentic version of the Mona Lisa— the one hanging in the Louvre.
If the Mona Lisa was never painted by hand, and instead, first created digitally, someone could buy the NFT and prove they own the original digital Mona Lisa no matter how much it is copied and spread online.
An attribute of NFTs that strays from physical art is that the original creator of the digital work can continue to make money off of the NFT of their work years after they sold the first NFT. That is because they can set a royalty when putting the NFT up for auction that guarantees them a specific percentage of all potential future sales.
While Kahn believes there is a way to create value around digital artifacts, he does not think NFTs will have any impact on the field of journalism in the future.
“When we are talking about digital images themselves that can be replicated, nothing distinguishes one copy of that from another copy of that,” he said. “I don’t understand why people are attributing such a value to this.”