Meet Larry, a very good boy, forthcoming addition to the McKay household, and possibly the subject of one of the first-ever cat tweets to live on for eternity in the Ethereum blockchain.
Larry’s blockchain adventure comes through no fault of his own (quite the opposite, actually). This weekend, we finalised arrangements to adopt Larry, and I was so excited I tweeted some of his shelter-provided photos; Larry is so photogenic and got 1,500 likes. He also attracted the attention of Twitter user @FatRaccoon, who offered to buy the rights to my tweet for $US50 ($65) in Etherium’s cryptocurrency, ether, via a process I’m still not completely clear on, but involves a unique cryptocurrency tech called a non-fungible token (NFT).
HI EVERYONE, SAY HI TO LARRY WHO WILL SOON BE OURS pic.twitter.com/7v6o30Xwz3
— Tom McKay (@thetomzone) March 6, 2021
The blockchain is a system of creating immutable databases via a distributed cryptographic process — networks of computers that compete to solve complex maths problems in a way that generates accurate records that can’t be changed retroactively. It theoretically has many uses, but is predominantly deployed to convert raw computational power into semi-imaginary internet money (like bitcoin and ether) hoarded by speculators who hope to become unimaginably rich with the same degree of non-effort as some guy on Wall Street.
Those cryptocurrencies are fungible, meaning they’re indistinguishable from one another — one bitcoin can be traded for another identical bitcoin. NFTs are little bits of data that are encoded onto a blockchain (usually Ethereum) sort of like a unit of cryptocurrency, but are instead totally unique. They’re still tradeable, which makes them sort of like a signed baseball card.
In theory, pretty much anything digital can be packaged and sold as an NFT — comments on this article, random photos of my future cat uploaded to Twitter, clips of NBA games, or works of art. It’s that last use that has attracted the most attention lately. A number of artists have made millions lately by selling NFTs of digital artwork for staggeringly high prices; the buyers get the blockchain-encoded trading card rather than a physical copy of the art, which may not exist (depending on the terms of the sale, the copyright and reproduction rights that would let them print off an actual copy).
This does not preclude additional copies of the sold artwork from circulating everywhere in .jpg or .gif format or whatever. What the buyer is really getting is less tangible: bragging rights, clout, a collector’s item, or simply a nifty new form of money laundering. And because of the meteoric rise of cryptocurrencies, just attaching words like “token” or “blockchain” or “proof of work” to random crap can make its value skyrocket.
Whether you’re trading cryptocurrencies or NFTs, the transaction has to be permanently encoded into the blockchain generally using a process called proof of work, the work being the aforementioned maths problems. As the blockchain grows over time, so does the overall level of work that needs to be performed to keep it going, which translates directly to more physical processors sucking up juice from the local (often fossil fuel) power plant. This essentially means that by dealing in NFTs, you are cringing the planet into an oven.
This brings us back to Larry, or rather the tweet featuring him. @FatRaccoon said that he offered to buy my post, using a Twitter-to-NFT service called Valuables by Cent, as a joke.
“I feel like I now own a part of the dumb world we live in and it’s fun,” @FatRaccoon wrote over Twitter DM. “Buying tweets on the blockchain is seemingly peak online. Also, cute cat.”
“I expect this whole system to either collapse in a week or make like 5 people billionaires immediately,” they added.
The legality of any of this is completely fuzzy to me. Can you sell “ownership” of a tweet, which simply by virtue of posting it gave Twitter a worldwide, non-exclusive, royalty-free licence to use it? What does it mean if, as in my case, it contains material with copyright potentially belonging to another? What happens if I delete the tweet? Similarly, the economics of this whole thing are absurd. (@FatRaccoon said that mid-conversation with us, they received a scam phone call apparently related to them registering for a cryptocurrency wallet.)
What happens if you buy someone's tweet and then they delete it?
Also, how can you audit the ecosystem to ensure that a tweet hasn't been sold multiple times?
Point being, I suspect your ownership claim is quite weak. This looks like a prestige system, not an ownership system.
— Jameson Lopp (@lopp) March 6, 2021
An FAQ on the Cent website isn’t exactly reassuring as to the stability of this whole thing:
The tweet itself will continue to live on Twitter. What you are purchasing is a digital certificate of the tweet, unique because it has been signed and verified by the creator… Owning any digital content can be a financial investment, hold sentimental value, and create a relationship between collector and creator. Like an autograph on a baseball card, the NFT itself is the creator’s autograph on the content, making it scarce, unique, and valuable.
NFTs make digital content one-of-a-kind: you will be the only person who can claim ownership of an NFT that you own. This means you will have control of the NFT, like the ability to resell or distribute it, and it will appreciate or depreciate in value just like any other asset.
But there’s another issue. Remember that “proof of work” thing? Well, the bigger the NFT sale, the more work needs to be done to encode it onto the blockchain, and the more “work” needs to be put into future transactions on the blockchain. For example, according to digital artist Memo Atken’s CryptoArt.wtf tracker, which attempts to (roughly) approximate the overall carbon footprint of NFTs, recording artist Grimes’ recent sale of 303 editions of a short video piece called Earth for $US7,500 ($9,725) in cryptocurrency each cost a total of 122,416 kWh of electricity. That’s equivalent to a European Union resident’s average total electricity consumption over the course of 34 years (presumably one who doesn’t trade NFTs), or an extrapolated 79 tons of carbon dioxide added to the atmosphere of our slowly dying planet. Suffice it to say that environmentalists aren’t fans.
According to CryptoArt.wtf, the Larry transaction used the equivalent of about 11 kilowatt-hours. That’s equivalent to the average electrical consumption of a European Union resident for an entire day — or approximately 21 miles (34 kilometers) of driving with a gas-powered vehicle, one month of laptop use, or a week and a half of desktop computer usage. My last electrical bill for my residence (a two-story unit with two occupants) was 628 kWh, or 22 kWh per day, meaning I essentially added an extra 50% to my electrical use on Monday.
Those figures don’t count, as CryptoArt.wtf noted, the energy cost of “production or storage of the works, or even web hosting.” Nor do they include the energy cost of reselling the NFT, and they don’t include the infinitesimal amount I just contributed to making the blockchain suck up even more juice in the future, which I’m assuming is incalculable.
Defenders have argued that NFTs and blockchains in general actually comprise a very small amount of the overall worldwide fuel consumption, and that it’s more ecologically friendly than selling an equivalent dollar amount of more cheaply produced merch like shirts and prints. The first defence is like insisting coal-rolling is fine compared to the dang power plants, a lazy whataboutism that doesn’t address the fact that NFTs still have a toll on the climate. In the second scenario, the higher carbon footprint is because people actually got hundreds of t-shirts, i.e. objects that exist in reality.
I posed the question of waste to @FatRaccoon, who told me, “I work in tech and for years have been convinced that it was all a house of cards about to crash down, but it doesn’t seem like it’s going to do that anytime soon, so might as well get in on the grift while I can. If I become a rich guy I promise I’ll donate 50% of my money to the environment.”
I asked @FatRaccoon whether they agreed with my assessment that this seems like the “outcome of some process of just absolutely colossal stupidity.”
“What keeps getting me is it seems to do a whole lot of work for the end result of saying, hey this jpeg is now a jpeg,” they responded. “It only works because all the people who love this shit are so invested in it they’ll never let it be worthless. Any rational financial system would have shut down bitcoin but our government’s like eh, whatever, and so now its just chaos, no-rules gambling.”
“We cut down 10 trees so you can own this gif of LeBron doin a sick dunk,” FatRaccoon concluded. “If you ever sell it, we get some money and cut down several more trees.”
I apologise to Larry in advance for getting him mixed up in all of this. If anyone feels the need to buy any of my tweets in the future, however, I recommend this three-for-one bundle.
deleting all my old tweets but saving these specific tweets for posterity pic.twitter.com/tBdTELALbI
— Tom McKay (@thetomzone) July 7, 2019