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Alex Rosenblat is a technology ethnographer and a former senior researcher at the Data & Society Research Institute. She is the author of Uberland: How Algorithms Are Rewriting the Rules of Work, and she is head of marketplace policy, fairness and research at Uber.

The idea that you can buy links to JPEGs on the internet is repellant to some people. Anyone can make a copy by right clicking and saving, and you can’t touch them, like other art or fashion objects. Yet, the purchase of digital objects online is part of an emerging new market for NFTs (non-fungible tokens) that has taken the internet by storm. They can be pretty much anything, like memes or game objects, although much of the current hype about NFTs relates to blue-chip collections, like an ape from the Bored Ape Yacht Club collection that NBA player Stephen Curry purchased in August for a whopping 55 ETH (roughly US$180,000 at the time), and wears as his cosmetic Twitter avatar.

Observers may wonder if NFTs are a passing trend: Why should a meme, which drives culture, be treated like an asset, which drives economies? Maybe all the nothing we do on the internet is worth a little something after all. Internet-native technologies, currencies, identities and social organizations are spreading the idea that the digital lives we lead can be as valuable to us as the lives we lead IRL (in real life). To some, NFTs showcase a future for the internet where we can all own and tokenize pieces of it using technology like the blockchain (a public ledger). As deeply social sites of blockchain culture, NFT communities help to convert digital natives into crypto natives who might want to live in a universe of wallets.

When creators, collectors and community members build and popularize NFT projects, they are also doing the proofs of concept for how blockchain protocols could work in tomorrow’s internet. The key aesthetics of blockchains are immutability (unchangeability), transparency and decentralization. As a technology ethnographer, I’ve been immersed in NFT communities since the summer, when Dave Jaffer, an early adopter of many internet cultures, introduced me to buying pieces from different collections (some of which are mentioned in this essay). NFT creators are strategizing and experimenting with how well those concepts work, as competing future visions of the internet gradually come into focus.

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Blockchains, such as the Ethereum blockchain most NFT communities use, are giant data stores of transaction records that nobody owns, and anyone can access. Anyone can look up a wallet by its address on the blockchain, and see what crypto currencies or digital assets it contains. Similarly, anyone can pay to have their transactions logged as an immutable record on a blockchain. Your identity on the blockchain is your wallet, but you might associate your wallet with your social identity. NFTs bridge that gap between the technical definition of what you own, and the cultural benefit of owning it. For example, the most popular use case for NFTs are avatar projects, which people buy and wear as their profile pictures on social-media platforms, such as to signal status or group membership. As Lana Swartz, Quinn DuPont and other scholars argue, new money technologies create new forms of identity and power, and they map onto developments in social communication and co-ordination.

If the blockchain represents the master ledger underlying this new vision of the internet, users coming together in these online communities represent individual customers congregating in marketplaces. In the NFT world, there are rituals for bonding, online and in-person events, and even physical merchandise for sale. NFTs are gateways to immersive communities, social clubs, art collections, games, speculative finance, gambling and a range of other purposes. Practically speaking, they dress up cryptocurrencies, such as Ether (ETH), in objects with more relatable aesthetics, like cute Winter Bears.

These tokens are the site of new social organizations that bring together anonymous strangers on the internet into a common bond, who have a vested interest in raising the value of that token (like many multilevel marketing businesses). NFT communities grow on platforms such as Discord and Twitter, with products that support people who live more of their lives online, in contrast to Facebook and LinkedIn, which are better for helping people knit together digital connections into their physical lives. Just as successful NFT communities find ways to reward their members, community-focused platforms are thinking about how they can reward the content contributions that their users make to the internet economy by tokenizing them. Reddit, for example, is exploring how to tokenize karma points, which users can earn from contributing useful comments that are upvoted by other members of the community. They propose to turn social capital into actual capital, and they are promoting a vision for the internet that is to some extent owned by communities of users and governed by token-holders. (To be sure, this vision implicitly anticipates that platforms such as Reddit, Facebook, YouTube, Twitter and others are less responsible for making decisions about speech or the spread of disinformation).

While the blockchain is a tool that helps NFTs restructure the value of digital objects, there are clear pitfalls in the practice of transparency, immutability and decentralization. It can work as intended, such as when the former head of product for OpenSea, the dominant NFT marketplace, was accused of using confidential information to trade NFTs based on his transparent wallet activities (he resigned). Ownership records are too abstract outside of niche settings to verify identity, so it’s easy for imposters to use avatars that signal clout and status in order to scam others. Of course, that could change. For example, centralized platforms such as Twitter might start to integrate and verify wallets that help people protect and use their digital identities in meaningful ways. Surprisingly, when you buy an NFT, you aren’t actually buying a digital object – you’re buying a link that points to that digital object. The record is what’s stored on the blockchain, not the image data, which can be more ephemeral.

Many NFT practitioners are willing to accept that most things will fail, but they’re playing with what works. GxngYxng, the co-creator and artist behind the GHXSTS collection, told me that the permanence of digital art on the blockchain is better than traditional painting, both because you don’t have to maintain and physically store it, and because it’s portable. Tim Carambat, a software developer, took a more contrarian approach when he created DecayPunks, a small collection of pieces that decay (lose pixels) every time they are sold or traded through a script embedded in them. He explained to me that everyone’s buying NFTs because their asset ownership is permanent on the blockchain, but he adds, “I wanted to have it to where you have a piece and the more it’s manipulated and traded between people, it fades away. It’s giving less permanence to the whole idea of the NFT, which is permanence.”

Blockchains do not have to be the centre of a new internet, but NFTs are testing the broader public appetite for that idea. Despite flaws in the blockchain theory of ownership, there is powerful enthusiasm behind a vision for a world that rewards the culture communities driving the internet economy. NFTs and other tokens simply show us one method to get us there, and they give us an early glimpse into a fragile future where all digital objects are tokenized and owned. As early adopters take risks in their pursuit of new models, many of their ambitions will inevitably result in failure. But the social technologies they create are also asking us to imagine interventions that can help us build a web that works for more of us.

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