This is not an NFT.

This is the text of my presentation at this year’s Gikii Conference, expanding some of the themes and giving more detail. The slides can be found here

Before I begin, I need to make a quick explanation of the title. The phrase comes from the painting by René Magritte “The Treachery of Images”, which displays the words in French “this is not a pipe”. This is a play on the fact that painting something is a symbol of the thing, but not the actual thing (hence the treachery of the image). This perfectly encapsulates what an NFT is, an NFT is metadata, not the artwork itself. A quick thanks to Wendy Grossman for suggesting the name for the first time.

This article doesn’t go into any detail on the nature of NFTs, I’ve been writing quite a lot on the subject this year, you can find the first post here, and I’ve also written a full article on the copyright aspects of NFTs here, if you need a detailed explanation you can go and read it there and then come back. The objective of this article is to chart my travels throughout the NFT space, this is my own limited experience, your mileage may vary.

So I’ve been interested in cryptocurrencies and the blockchain for just over a decade now, and during that time I have been mostly critical of the space, although I could see some initial potential benefits of blockchain technology, I have become more disillusioned as time went by, particularly bothered by the growing centrality of a supposedly decentralised idea, as well as the evident environmental issues.

Around 2017 we saw the rise of the first NFTs, in particular two projects, Cryptokitties and Cryptopunks. Honestly I never thought much about NFTs other than finding it interesting that Cryptokitties clogged up the Ethereum blockchain, this sort of dampened the enthusiasm for these tokens, and I lost track of later developments. Over the years I wrote about the potential uses of blockchain technology and smart contracts in IP, and NFTs received just a small mention, if any.

Then this year it all changed when cryptocurrency prices started going up, this also lifted various other parts of the environment, in this case NFTs. We started seeing insane money spent on all sort of art and old memes, culminating with Beeple’s First 5000 Days selling for about $63 million USD.

I started spending more and more time in NFT platforms, and I have to admit that I was not particularly impressed with the quality of the art on display, I mean, people spent millions on rock jpegs. Sorry, they spent millions on the metadata encoded with rock jpegs.

Who wouldn’t want a piece of this artistic revolution?

Don’t get me wrong, as a gamer I get the appeal of spending stupid amounts of money on virtual goods, but NFTs seemed to be not even good for that. I was however very interested on NFTs from a legal perspective, which is why I ended up becoming obsessed with the subject, and wrote close to 15k words in blog posts.

I started getting invited to conferences and media interviews to talk about NFTs, and this is where my story takes a turn. I got invited to give a talk on NFTs and copyright back in April of this year. During the introduction, I was presented in this manner: “We have with us artists, developers, agents, and to offer some balance, a conservative person”. In a panel full of young believers, I was the one dissenting voice, the old man yelling at the cloud, the old fogey to contrast the bright and beautiful enthusiasts and make them look good. I was so depressed!

Why depressed you may ask? All of my life I’ve been in the rebel camp, an outsider, not part of the mainstream, part of the indie crowd, at worst I am just another nerd, but never a conservative voice. This was an eye-opener, it was as if someone had enrolled me into the Empire. I had become what I despise.

So I decided to see if I was missing something obvious, it was clear to me which were the limitations of the technology, but perhaps I was missing something that all of these NFT enthusiasts had encountered. It was time to go all in and become an NFT magnate.

So I developed a new alter-ego, Techbrollama! (jump to the epilogue to read some ethical considerations).

When Lambo Moon?

The first step was to create a new wallet, the easiest one to obtain right away is Metamask, which is an ETH wallet that works in most browsers. This wallet (address in ETH scanner here) started from 0.

I use Twitter a lot, so the most logical step to begin my experiment was with CENT, the tweet NFT platform used by Jack Dorsey to sell his first tweet. So I minted a bunch of tweets, some of my best hits, but nothing sold, NFT-Land was not impressed by my wit.

Then I minted a few artworks when I discovered a gasless minting service called Mintable. I minted some memes, some infringing works, and even Naruto the monkey. Still no takers.

At this point I should briefly explain gas, because it will be an important point in the discussion to follow. Cryptocurrency transactions tend to have a cost that is dependent on the use of the network, this is because the network is being run by miners in proof of work blockchains, and they need to be paid. This cost is entirely dependent on supply and demand, so when things get popular, the more expensive they become. In Ethereum this is called gas, and it is defined as the cost necessary to perform a transaction on the network. Gas is different to a transaction fee that may be charged by a platform. One of the biggest barriers to entry in the NFT world is that for the most part you need to have funds already in your wallet in order to pay for the gas and tx fees.

My wallet was still empty, so it was time for more drastic measures. I set up a donation button on my blog with my ETH wallet address, I was getting quite a lot of traffic to all of these NFT blog posts, and also a lot of legal questions about copyright. Surely one of the NFT magnates taking advantage of my hard work would leave some ETH as a thank-you note? Not even a virtual penny. Habitual readers may have noticed the appearance of a Donate button and wondered if my blog had been kidnapped, but I digress.

Until finally, a result! I made a meme and posted it to Twitter.

Would you buy this meme?

One of our Gikii collaborators, Bogdan Covrig (who works with the always fantastic Catalina Goanta) put a bid for the tweet for 0.000757454 Ether. I held out wondering about the ethical issues (more of that in the epilogue), but eventually I accepted (transaction here). Gas was pretty cheap back then, only 30 Gwei, for comparison, the average at the time of writing is roughly 70 Gwei. I ended up making a small profit of just under $1.50 in USD terms at that time’s exchange rate.

So a whole world of NFTs opened up! Next stage in my plan was to acquire an NFT, and I found the likely candidate in the Carefree Llama, a steal at just 0.001 ETH ($2.7 USD), and one of a series of 126 uniquely identical llamas. I hit the purchase button (transaction record here), only to find out that the transaction fee would be 0.0075 ETH (20.6 USD). Yes, over 7 times more than the actual price. But you cannot become a magnate without breaking some gas, so I hit the purchase button. 

At this point NFT enthusiasts will accuse me of bad faith, as they recommend that such low price items should go to what is known as a second layer marketplace. Briefly, because transaction rates can be so high during busy times, a second layer of intermediaries has emerged to allow fast transactions, but these will take place off-chain and will only be recorded later at slower rates (I’m horribly over-simplifying the concept, for a more detailed explanation read here). I have serious problems with 2L for various reasons; to me it’s evidence that your first layer has inherent problems of scalability which force developers to build a new edifice to make it faster, it’s like saying “this car doesn’t run very fast, so I’m going to tow it with a Ferrari”. Moreover, this second layer relies in large part on a system of trust that the whole blockchain was supposed to do away with. I’m also suspicious about the legal status of those intermediaries, as they are acting in a fiduciary manner that should probably be subject of regulatory scrutiny.

Anyway, undeterred by this experience, it was time for a more ambitious strategy. So far I had been relying on free and gasless marketplaces to sell my NFTs, there is a hierarchy of platforms developing, so I decided to go to one of the more upscale ones (I still don’t have the clout for the higher echelons such as Foundation). What to sell? Why not my very article on NFTs and copyright, which I had just finished? So I went ahead and minted it (my first attempt to mint failed due to lack of funds, which cost me 0.002 ETH (8.7 USD). This is common with growing transaction fees, if you get the price of gas wrong you will lose it. So I tried again and it was a success, with a tx fee of 0.01 ETH ($34.5 USD). I was in business!

You may be asking how exactly I minted my article, this is an interesting story in its own right. I had seen other people minting their articles, but what they had done was to take a screenshot of the article, minted it and and sold it. What I did was to upload the PDF of the entire article to an IPFS service, and then what I minted was an image with a downloadable link to the file, which means that only the buyer would have access to that file. This can be easily replicated with other media, and I have done it also with the video of this presentation.

To my surprise, there was a very early bid for the article of 0.02 ETH (around $67 USD). I tried to accept the offer at 0.002 ETH (about $6.7 USD), but then again failed and lost the fee. So I had to up the transaction fee and ended up paying 0.014 ETH ($47.5). This is on top of the commission to the platform, so I ended up receiving 0.0175 ETH ($58.25 USD), which means that I just about made $9 USD on the sale, but discounting the failed transactions and the minting fee, I ended up losing money, I’m too lazy and depressed to calculate just how much. All the while I kept funnelling in funds into my wallet to bankroll the experiment.

NFT proponents asked me why had I accepted the sale at such high gas fees, actually I’m glad I did, as gas kept going up and up. Some could also blame me for getting the gas price wrong, but I was not the only one, at the time millions of dollars worth of ETH were going up in smoke, just gone in a poof of blockchain (look for “lost transaction fee” on Reddit).

I decided to switch blockchains to a more environmentally friendly and cheaper option, in this case Tezos. Tezos and Solana are Proof of Stake blockchains, reputedly more environmentally friendly as the value is derived from the quantity of holding of the cryptocurrency, and not on wasting energy in useless computing resources. I purchased a couple of collectibles, a dog that looks like a cat, and a wizard llama. I even sold an artwork! The transaction fees were quite reasonable in comparison to the ETH environment, so when I minted my artwork (or OBJKT as it’s known in Tezos), I paid about $0.12 USD in fees, and sold it for around $15 USD, so a much better profit margin than what I lost in my ETH experiments. The marketplace is smaller and less user friendly, but the gas prices are low, as well as having the satisfaction of using a blockchain that does not damage the environment as much.

Edit: I still own a bunch of NFTs purchased or minted during my research that I’ve been trying to sell. Nobody is interested, which is in keeping with the statistics. Over 75% of all NFTs either do not sell, or go for under $15. There’s a Sollama, a knock-off copy of Nyan Cat, some pictures, Instagram posts, tweets, nothing.

Concluding… What have I learned? I started thinking that NFTs were stupid. I now believe that they are mostly stupid, but there’s something there, there’s a kind of thrill in the use of NFTs that I had underestimated. While I will abandon Techbrollama, I remain intrigued. I may even start funding my academic projects with NFTs in the future. Who knows?


A quick word about the ethics of this experiment. I have been quite vocal in my concerns about the environmental impact of blockchain technology, specially proof of work ones such as Bitcoin. I still have those concerns. I decided to conduct this experiment regardless due to a few reasons. Firstly, Ethereum is set to move to Proof of Stake in the near future, and I believe that this in itself sets it apart from Bitcoin, which remains doggedly in the Proof of Work camp. Secondly, most of the gasless services I used, such as Cent and Mintable, do not really write the work on the blockchain until a transaction has been finalised, so you can experiment with these services without remorse. Thirdly, the number of transactions I conducted was minimal, and I felt that it was worth the possible environmental cost as long as I truly understood the technology, having informed criticism about something has more impact.

There is also the question that I may be profiting from this research, and that I am taking someone else’s money without really giving anything in return. So far I have only lost money, I haven’t made a full calculation but it’s definitely a loss of around £100 GBP. I promise to buy Bogdan a beer when we finally meet in real life. As for the mysterious buyers of the other NFTs… I hope that you can re-sell them at a better price than what you bought them.

May your gas prices be favourable.

Categories: NFTs


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