And it’s kind of funny.
What is an NFT? And Why Do So Many People Hate Them?
An NFT is a non-fungible token. Essentially, it’s a unit of blockchain attached to something unique, like an image, as opposed to a blockchain coin, which is just a coin and can be exchanged with any other coin (fungibility). There are dozens upon dozens of people making really good arguments for why NFTs shouldn’t exist and how their energy demands are ridiculous, but just know that every single layer of what an NFT is has some kind of tomfoolery going on within it.
Starting at the top: the art.
Art NFTs, which are non-fungible, can be any kind of art at all so long as it’s digital. Literally anything. Since the image isn’t actually stored on the blockchain (because there isn’t enough space for something hi-res) the blockchain is generally leading to a link to the image on the actual server where it’s stored (which is a whole other thing). Meaning you can link to huge impressive projects that someone may genuinely want to own an NFT of even though other people can see it, just because the project is that impressive. Like funding an art gallery IRL – the art inside is beautiful, and everyone who walks up knows you own it and you shared it with them.
Instead, we get bored apes and all sorts of other cookie-cutter Picrew dressup dolls with swappable details for easier selling, used mainly in Twitter avatars for clout. There’s also quite a bit of art theft going on, where people who published art online find their art later on NFT brokering websites and have to tell the staff that their picture was put up there illegitimately. It’s very annoying and difficult to combat, so much so that Deviantart created a tool for users to cross-check their art.
But Wait, There’s More
But the same doesn’t apply in reverse. Left-click-save people aren’t violating the rights of the purchaser or the creator unless they use that unedited image commercially. However, if someone does use it commercially, the creator has the right to legal action – not the buyer. Turns out, NFTs don’t confer copyright unless explicitly stated by the seller, so if you don’t clarify that you want to own that art and make stuff with it, you just don’t! The original creator of the NFT could double-sell the picture, and now there’s two Diamond Blunt-Smoking Bored Apes out there, and there’s nothing you can do except tweet about it. Generally speaking, an NFT is like a baseball card, in that you don’t own the art on the card or NFT just because you purchased it, and the original owner can pump out so many cards that the card you have is worthless. All of that blockchain does not prevent this from happening. A 2 where a 1 was earlier in the chain means those two diamond apes are technically different entities.
The blockchain is the whole point, too. Can you imagine someone buying a Bored Ape for an avatar and spending more than 20$ at most on it if it wasn’t blockchain? Much less thousands? They wouldn’t, that guy would have been laughed out of the room. Because him and other people like him successfully convinced people that the blockchain has inherent value, a bunch of people bought these blockchain collectibles for significantly more than anyone would have had it not been. To be clear, the blockchain is not inherently valuable no matter what product it’s representing. It’s a technology, not an investment in and of itself. Cryptocurrencies crash and burn all the time because investors lose their faith in the product’s value.
All this to say that the blockchain creates this illusion of exclusivity over an image when you don’t have exclusivity by default and the images used by the most popular NFTs are stock images with stock details that look like they’ve been run through an RNG. It’s a common joke that you can just left-click and save these images, and it’s funny because there’s really no rebuttal. If you don’t care about the blockchain, if the other person doesn’t have copyright ownership, and if you’re not using it for commercial reasons, why can’t you left-click and make the Bored Ape that guy owns your profile pic? Literally nothing is stopping you at that point except for respect. The image is not actually on the blockchain, most of the time – usually it’s a link.
I’m going to skip all of the stuff about electricity consumption and money laundering, but know that those are issues too.
Seth Green’s Bored Ape
There’s a lot of fraud in the industry. You can steal digital art and use it illegitimately, but most of the time you have some way to stop that from happening so long as you notice it’s happening – you can copyright strike on most websites that do art, for instance, and that will put the brakes on the art being used illegitimately. Unfortunately, the same is not necessarily true for NFTs. Not only do you not have the copyright by default (which is a huge, confusing mess to navigate when someone is using your lion on a T-shirt but you have to contact the Lazy Lions guy to actually get something done) but when you have a penumbra of the copyright, you still don’t have all of it!
Bored Ape owns the copyright to their apes, but they’re fairly generous with what users can do with said apes as long as they’re apes the user has bought, and not someone else’s apes or an ape that doesn’t exist yet. They seem to know that tightening the collar too much on copyright issues would make some of their buyers question why they had the ape at all, and as such give users a wide berth to do their own thing with it. It also acts as great free advertising. However. The issue with that system is that once you lose your ape, you can’t make things with your ape. That makes sense for legit sales but is a total nightmare for theft, which is what happened to Seth Green. Many NFT sites (and the NFTs themselves) don’t have any way of distinguishing a sale from a theft – they can only record that the token moved from one wallet to another on their chain. The non-famous and famous alike who bought these things and then clicked a scam link have no recourse but to publicly ask for the NFT back from the thief, or whoever bought it off the thief, which has mixed results and sometimes ends in a ransom to get the thing back. In Seth Green’s case, the new owner who bought it from the thief doesn’t want to give it back at all!
But wallets are secure, you may say. How could this have happened? Besides the whole Smart Contract issue (which is an entire article by itself, but is also discussed here: https://elixistechnology.com/?p=7187 ) humans are still humans, and can commit human errors.
Phishing scams are a huge issue in the industry, for example. None of the websites being used have been around for longer than NFTs themselves have been, and the side of the industry that wants to get these tokens out there to begin accumulating worth are not on the same page as website developers, so they end up with these huge, ungainly URLs that are indistinguishable from phishing scam pages. Some of the projects aren’t even made by a team – one guy is generating the pictures, making the advertising happen, running events, etc. and also making the website. Those projects are as legit as any of them are, and some blow up because of one big buyer – if you can score a 10$ NFT that turns into a 400$, it’s worth buying from those janky sites. Unfortunately, this means that the fake sites and the real sites that haven’t gotten their feet under them look too similar for comfort, but big risk, big reward, right? Even if the site looks good, that doesn’t stop someone from abusing the URL thing from before to make an identical page that steals data. This is regulated by an outside force– but you have to get into contact with the website hosting service to keep people from domain squatting on similar names, which most don’t. This exact thing happened to the Neopets NFTs, which was run by a big, well known company called Solana. If Solana couldn’t keep it from happening, what shot do the small guys have?
Anyway, Seth was trying to mint an NFT from GutterCats, and he clicked a phishing link instead. He’s probably going to get his NFT back (even though the person who has it says they don’t plan to return it – I suspect that’s a bluff to get a ransom out of him), but until it happened to him, the possibility of this bizarre penumbra-of-copyright thing happening hadn’t been considered. Because he’s famous and his show will act as free advertising, I doubt the Bored Apes guys would throw a fit even if he didn’t get his token back. However, the other Twitter nobodies? Who knows what would have happened if one of them was tackling a project as ambitious as an animated show only for the rug to be pulled out from under them? There’s no safety rails! If this hadn’t happened to Seth, the issues this creates wouldn’t have been discussed at all. Theft of the image is not supposed to be theft of the copyright too! In a digital world, that’s completely nuts – even real, physical art doesn’t work that way!