What the NFT?!

Posted on January 19, 2023 | in Library & University Collections | by

The purpose of this blog post is not to endorse or criticise NFTs but to explain what they are and – briefly – discuss if they are relevant to libraries.

When a colleague asked me if I know what non-fungible tokens are, I must confess that she gave me pause. As I regained my bearings, I remembered that mobile goods can be classified as fungible and non-fungible. According to my old Civil Law textbook – fungible goods can be determined by number, measure or weight therefore can be replaced with similar ones when executing a contract. I also remembered the example given by the professor: if someone buys one tonne of apples that go bad before delivery, then the seller must replace them with another tonne of apples of similar type and quality and the contractual obligation can be still respected. The seller will bear the loss but that’s the nature of fungible goods. Per a contrario, this means that non-fungible goods are irreplaceable or unique goods.

A non-fungible token (NFT) is a record of who owns a unique piece of digital content. It’s the digital equivalent of the deeds of a house. Ownership is recorded on blockchain – a publicly accessible and transparent cloud ledger for digital assets. Content can be anything – art, music, graphics, tweets etc. – as long as it is unique.

Last year, American band Kings of Leon released their When You See Yourself album using the usual channels (vinyl, CD, streaming etc) and as an NFT. In fact, there were two types of NFTs: one digital download deluxe version of the album which came with some digital & real perks was sold for $50. The other type is a set of 4 front-row seats for all future Kings of Leon concerts. 18 such NFTs were minted and only 6 were sold – the rest will be auctioned in the future. This may make more economic sense for investors or fans of the band as they can use them or sell / rent them but still it depends on how long the band will stay together.

One key advantage is that NFTs will put all money directly (and immediately) in the pockets of the artists, but the list of possibilities is endless, being limited by technology, creativity and – crucially – whether NFTs will get enough traction to provoke a shift in the industry. Attaching copyright or royalties to the NFT is theoretically possible but it may not be viable for all types of content.

Are NFTs relevant to libraries?

NFTs are not similar with the ebooks that can be bought from Amazon or other publishers. Unlike Kindle books, NFTs are unique (or limited series) and come with the ownership of the digital book and therefore can be easily resold on blockchain.

Many universities and university libraries have physical possession and sometimes ownerships of rare and limited-edition items which can be digitised, tokenised, and auctioned. Many of these items should be digitised for preservation purposes anyway. As money are always tight, NFTs may look like a source of income as well as creating opportunities for partnerships.  Libraries have always been at the forefront of research & innovation and were among the first to embrace some of the innovative practices the internet has unleashed. Any university library with an open-minded IT and finance department should be able to mint NFTs.

On the negative side, there’s a significant ethical problem as usually university libraries are in the business of making the information more fungible not making it non-fungible. University of Edinburgh’s vision is that ‘our graduates, and the knowledge we discover with our partners, make the world a better place’. We cannot do that by restricting access to knowledge. Another equally significant problem is trust – is the NFTs (and the other cryptocurrencies) bubble going to pass the test and become mainstream or is it going to burst just like the tulip fever in the 17th century?

Like any digital creation, NFTs do require ongoing maintenance for their existence. University libraries have the experience of providing long-term preservation for items they store and fortunately the life expectancy of a library is longer than that of a rock band.

A simple scan (even a 3D one) of a unique manuscript or artefact may not be enough of an incentive for someone to buy an NFT. To make them desirable, something new, innovative should be added. This may be an ideal opportunity to innovate, to create partnerships with students and young, original creators and help them build their careers.

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