Technology
For watchers of the NFTs phenomenon, it's been a wild couple of weeks. "All apes gone," tweeted art gallery owner and crypto evangelist Todd Kramer . Share on Facebook Share on Twitter Share via Email For watchers of the NFTs phenomenon, it's been a wild couple of weeks. "All apes gone," tweeted art gallery owner and crypto evangelist Todd Kramer on Dec. 30, after someone swiped his collection of "Bored Ape" NFTs. Then Eminem was reported to have purchased one of those same apes for a cool $462,000 in cryptocurrency — just the latest in a long string of celebrities getting in on the craze. (Matt Damon also appeared in a crypto ad during prime time football Sunday night.) As an NFT skeptic, some guy getting scammed out of his collection of objectively hideous procedurally-generated ape cartoons was amusing. But it's all getting steadily less funny. Real non-rich people are putting a lot of money into these things, and there are good reasons to think sooner or later most of them are going to lose their shirts. The details of how NFTs work are a fascinating study in how utopian technobabble, heavy advertising, and the appearance of instant effortless wealth can convince millions of people to fling money into an incredibly dubious "investment." To create one, you inscribe some metadata about a piece of art (like a link to an image) onto the blockchain of some cryptocurrency (typically Ethereum) with a smart contract, requiring payment of a "gas fee" (using up something like 48 kilowatt-hours of electricity, or as much as the average U.S. household uses in a day and a half) which puts a time-stamped permanent record of the metadata onto the blockchain, naming you as the owner. Hey presto, you "minted" a new digital . thing that, unlike any normal piece of data, can't be replicated, but can be sold. NFT boosters say the resulting tokens are a new way for people to own unique digital assets — one of those classic libertarian schemes trying to engineer around the need for social trust or the state. But in reality, NFTs have nothing to do with real ownership. They are essentially just an electronic "receipt" that anyone can make pointing to anything. (People are constantly making "fake" NFTs on art they do not own in real life, though I would argue they're all equally fake.) Boosters will tell you forthrightly that any artist who mints one still retains all normal copyright powers. In terms of the actual art itself, anyone with a web browser can go and look at the entire collection of those appalling ape cartoons, and even save the image files to your computer — indeed, just looking will create a copy of the original ape image simply because of how the internet works. An NFT isn't even really scarce. Nothing is stopping someone from minting another NFT of the same image or whatever — the two would be distinguishable of course, but nothing on either token would indicate one is better or more legitimate than the other. Or they could use a different cryptocurrency and blockchain (or set one up themselves) and do the same thing. The only actual limitation is the mind-boggling amount of electricity required, and perhaps whether the resulting carbon emissions will end up drowning the servers hosting the image file with rising sea levels. One might even argue that it is not possible to steal an NFT, because theft implies trust and interface with the legal system that NFTs are explicitly designed to avoid. There is no difference between a smart contract and a hack in terms of the internal logic of NFTs and crypto — in each case you have some machines executing pieces of equally-brainless code. The difference is in the intention of the participants and their relationship to society. In a trustless system where "code is law," possession is proof of ownership. Kramer, of course, was very upset about losing all his precious apes, and so convinced OpenSea (the third-party service where he had hosted his NFTs, allegedly worth some $2.2 million) t...