life and death of NFT
They had a short life but a good one. The NFTs are about to die or at least in the way we currently know them. Do you own NFTs ? The question is why ? Why do you want to own the original version of a digital file ? If you don’t know what a NFT is, let’s ask to our new friend (we parted ways with our old friends Google and Wikipedia, not smart enough):
An NFT, or Non-Fungible Token, is a unique digital asset that represents ownership or proof of authenticity of a specific item or piece of content, usually on a blockchain. Unlike cryptocurrencies which are fungible and can be exchanged for one another, each NFT is distinct and cannot be exchanged on a like-for-like basis.
ChatGPT
A few months ago, my tech feed was full of articles about crypto, blockchain, and NFTs. All of this has been overshadowed by AI. Perhaps it's because I'm no longer interested in NFTs that my tech feed doesn't show me articles about them. I used to think it was the other way around, that my tech feed influenced what I was interested in (algorithm paranoia)… Regardless, the result is the same. No more NFTs on the radar. They were once associated with blockchain, bitcoins, and speculation. However, due to the crypto winter, they are no longer trendy.
I think NFTs were clearly serving the purpose of digital art. If you're a digital artist, how do you sell your work? You can't easily sell a JPG or PDF of your work, as it's super simple for someone to copy your file. In this case, the value of your original JPG is very low. NFTs fixed this because when you own an NFT, you own the original version of the digital file on a blockchain. Well, not exactly. You own only a link. Yes, if you look in detail, the code embedded in an NFT is just a link to a picture hosted in the cloud (mainly on opensea.io, but it could be elsewhere). So, you paid 91 million dollars (the most expensive NFT to date) just for a link. Clearly, in the design of NFTs, it was a big mistake not to embed the code of your JPG file directly in the blockchain. It's not decentralized because you need an external hosting provider to host the picture of your NFT.
crypto art
Your CryptoPunk collection's value dropped from $100,000 to $100, which is a shame. But why did you pay $100,000 for a bunch of pixels? Perhaps you thought their value would increase, or maybe you bought it for tax reasons. The value in art is a debatable topic. If you can pay millions for a Bansky or a Van Gogh, why wouldn't you pay millions for a CryptoPunk collection? In art, I believe you pay for the subjective beauty of the piece, the time spent, the difficulty in creating it, and primarily for the artist's name. The name of the artist is significant, considering what they did before, their history, their message... The CryptoPunks and these new digital artists didn't embody these values. They were clearly there to make money. They weren't designing NFTs for their beauty. They lack history or purpose; they don't convey a message. Maybe their message was just “buy my stuff, you’re stupid and a cupid fool.” I don’t know.
With the new power of AI, you can create thousands of NFT collections using just one prompt; there's even no difficulty or effort behind designing NFTs anymore. Photoshop skills are no longer required. I remember being interested in NFTs 18 months ago and joining a Discord group to buy an NFT. In the main chat of the group, I saw hundreds of NFT transactions. $6,000 for an unknown NFT, and you could sell it for $8,000 a few days later. That was crazy, and it was clearly a gold rush. The bubble was about to burst. Today, I feel sad for you if you still own NFTs (or links to pictures hosted in the cloud). Back to normality, only NFTs from well-known artists retain their value because there is real work behind the artist.
who owns AI?
I think the new problem has shifted to AI and ownership rights of generative AI. With DALL-E powered by OpenAI or MidJourney, it’s easy to generate amazing pictures, some of which could be considered digital art. The skill of the modern artist lies in mastering prompting. I believe art is about how you use the technology available in your era and elevate it to a higher level. With a piece of wood and a chisel, you can create a masterpiece and sculpt an amazing statue. With Photoshop and knowledge of this tool, you can create a beautiful digital picture. Similarly, I think with ChatGPT and a keyboard, you can create a masterpiece and an amazing picture. The raw materials and the skills are just different.
So, who owns the picture generated by AI? I would say the person who entered the prompt. The problem is that generative AI uses tons of information and examples from the internet to generate the picture (the same problem applies to text). So, the owners could be all the sources. Perhaps the owner is the company that hosts and designs the generative AI you are using. Is this similar to a creative commons license (open source)?
There are many questions without answers. Technology is advancing faster than the law, as usual. I envision an NFT version 2 where the code of the picture (jpg, gif, or even short clips) is directly hosted on the blockchain. This new NFT v2 could be generated by AI, and the ownership of the NFT/AI-generated picture would be managed by the blockchain. It's also worth considering a method to confirm whether the picture was generated by AI, perhaps some kind of flag to prove (using the authenticity of the blockchain) that the picture was generated by OpenAI, Midjourney, or others.
this blog post has not been generated by AI
I promise :) This blog post has not been generated using AI. It's just my word. I don't know about you, but for me, that has some value. In a previous article, I predicted that 90% of internet content will be AI-generated. I think we should mention when we produce something using generative AI. Maybe it should just be mentioned at the end of an article. For example, we always know the author of a blog post; maybe the author could be ChatGPT… The same problem arises with ownership: who is the author of something generated by AI? On the other hand, when you use Google to search for information for your next article, you don't mention “Google has been used for this article.” I still use Google Docs to fix errors in my writing and ChatGPT to fix grammar. AI is here to help, not yet to do all the work. Perhaps the limit should be if the content has been fully generated by AI, it should be mentioned, or at least it should be visible if it’s a picture or a video. I know not everyone has the same ethics: they won't mention “fake news” for the “not so true” news published on the Internet.
To return to the topic of NFTs, it was a great idea and it will evolve and remain in the future. The speculation surrounding it is simply over. The concept will endure. The power of the blockchain is to prove the authenticity of a digital file, so there is potential to use it with generative AI to verify the authenticity (or lack thereof) of these new files, whether generated by AI or by a human. If you have a great idea that could change the world, just let me know, and we could change the world together.
Vladimir