“What exactly are people buying?”, is a question that keeps bugging anyone with the time or curiosity to check what is going on in cryptocurrency markets. The question pops up every hype cycle, and it never makes sense. In 2017 people were buying “tokens” to spend on to yet-to-be-launched websites; in 2020 they were buying “yams”, memes play-acting as financial assets; last week, someone shelled out $69 million in cryptocurrency to buy a “non-fungible token”, or NFT, linked to a digital collage designed by graphic artist Beeple. Now there is an auction for a tweet; currently, the highest bid is $2.5m.
This tweet is the first shared on the site, written by Jack Dorsey, Twitter’s co-founder and CEO, and it is being auctioned on a cryptocurrency-based marketplace called Valuables whose website tagline is “Buy & Sell Tweets”. People who have a Twitter account – and, presumably, some Ether cryptocurrency they want to part with – can make an offer for a tweet they like, triggering an auction. It is down to the tweet’s author to decide whether to accept the offer or otherwise. Dorsey, a crypto-enthusiast who sports “#Bitcoin” as his Twitter bio, is game: on March 6 he tweeted a link to the Valuable auction; on March 9 he added that the proceeds from the auction, which will end on March 21, would be converted into Bitcoin and donated to charity.
So, what exactly are people buying? Not the tweet, not really. What the highest bidder will get is a piece of cryptocurrency – an NFT – housed on a blockchain, the decentralised network where cryptocurrency is exchanged. The NFT will be digitally signed by the tweet's author, in this case @jack, and contain its metadata (date, url, attributes, text of the tweet). The buyer can resell the NFT and brag to friends that Dorsey himself authenticated it. There is only one NFT associated with any one tweet, making the token unique. That does not mean that the tweet will stop being available for everyone to see or share on Twitter; nor does it mean that, were Dorsey to delete his 24-character tweet, the NFT buyer could do anything to prevent him – they’d better take a screenshot of their purchase while they still can.
Legally, Valuables’s idea is just crazy enough to hold water – thanks mainly to the fact that it bagged the company CEO’s implicit green light. Twitter’s terms of service say that users remain the owners of the content they tweet, and that the company itself simply holds the licence to distribute it on the platform. It is that content that Dorsey – and others like him – would be selling. (A trickier bit is the fact that by etching tweet metadata on the blockchain, you are making them permanent, which might be at odds with Twitter’s demand that no third-party store tweets that are removed or deleted. )
But if you step into the realm of common sense, the mind boggles. William O’Rorke, a Paris-based lawyer specialised in digital assets law, is squarely in the “what-the-hell-are-they-buying?” camp. “I mean, it’s like selling your poem, but not the manuscript, not the paper or the piece of hardware, but just buying the – the idea of the poem,” he says. “So for me, if it's an idea, you cannot sell it.”
Gauthier Zuppinger, co-founder of Nonfungible.com, a market analysis website focused on NFTs, calls the whole concept “complete nonsense”, although he says the initiative might have some merit in probing the potential of NFTs – which Zuppinger thinks will have valuable applications in fields including gaming, art, and ticketing services. “NFT’ing a tweet is definitely a proof-of-concept,” he says. “But is there a real use case behind that? Definitely don't think so.”
If you ask Cameron Hejazi, co-founder of Cent, the company behind the Valuables auction market, selling tweets is an almost philosophical exercise, putting fandom, the monetisation of social media popularity, and the power of internet platforms to the test. “Nobody thought prior to this experiment that their tweets were valuable or worth anything,” he says, which is why Valuables lets potential buyers make the first move. “What we're observing with NFTs and collectibles, [is that] there are a lot of potential interested people saying: ‘I want to own that tweet’.”
The reason for that craving goes from sheer adoration for the author, to something that appeals to collectors. One thing tweet-sales might be replacing, Hejazi says, is the kind of bashful monetisation attempts some people engage in on Twitter when their posts go viral – which usually takes the form of linking to their GoFundMe or Ko-fi pages in a bid to rake in some tips. “We think that there's a model where the [tweet] itself that is blowing up, the thing itself that is getting retweeted, commented and talked about – that is inherently valuable,” he says. “You should be able to be rewarded for that value.”
Sean Stein Smith, a professor of economics at City University of New York’s Lehman College, says that while the prices being flung around are “overheated”, the tweet sale speaks to a real question. “Equitable compensation of artists and other content creators – be it music, be it artwork – has been an issue for a long time,” he says. “And so this NFT concept really opens up all of that to actually be able to fairly and accurately monetise content that was already created.”
This conversation is indeed taking place within Twitter, which recently announced the launch of a “Super Follow” feature that would allow accounts to charge followers for special content. (Hejazi declined to comment on Valuables’ relationship with Twitter and on whether Twitter is or will be an investor in the company. Twitter declined to comment on its relationship with Valuables, or on its views on the tweet sale; Jack Dorsey did not respond to requests for comment via Twitter direct message.)
Another way to think about NFT tweets is as collectibles: an NFT tweet signed by Jack Dorsey – or Elon Musk, Joe Rogan, Barack Obama – can be compared to a football trading card autographed by the player. In this specific case, we are talking about the first tweet ever by Twitter’s CEO, something of significance if you accept that a unique string of characters on a digital ledger fulfils that criteria. “It is akin to a certificate, a document, or the Declaration of Independence, right? It's very much a historical collectible,” says an NFT collector and cryptocurrency entrepreneur who goes by the name of WhaleShark. “Given how Twitter has grown today, I think it's a very good purchase.” All that, however, must be read in the context of crypto, an unregulated, speculative environment that goes through periodical sprees and self-destruction for the sake of publicity, speculation, or just the odd bit of trolling.
The first person to offer $1m, and then $2m, for Dorsey’s tweet was Justin Sun, the CEO of blockchain platform TRON and computer science company BitTorrent. Sun has a certain rap for his brash marketing stunts – he once gave away two Teslas after a botched raffle– and his willingness to spend a lot of money in auctions.
In 2019, he paid $4.6m for a meal with Warren Buffet, grabbing headlines worldwide; more recently, he was the runner-up in the Beeple $69m NFT art auction, which was eventually won by pseudonymous collector Metakovan. Sun is currently the runner-up in the @jack auction, too, since Sina Estavi, the founder of a project that runs on the Tron blockchain, outbid Sun by $500,000 on March 6, following a bidding duel that made the tweet’s price climb up from $500,000 to the current $2.5m. Sun thinks the auction will go “fine, as it seems [Dorsey’s] tweet is going to stay in the TRON ecosystem anyway.” He says he hasn’t spoken with Estavi about the auction, and is not coordinating offers with him. He declines to say how much he will offer before the auction ends on March 21. (Sina Estavi did not reply to a request for comment through Twitter direct messages)
Sun says the tweet is well worth his multi-million bids. “The tweet itself is precious. This is the first tweet in Twitter's history,” he says. “It’s like [something owned by] Tim Berners-Lee, like the first computer used to create the internet.”
“In the future, I think a lot of things can turn into an NFT. For example: Zuckerberg’s first Facebook post – or Instagram pictures. That's why I believe there's a lot on internet platforms that we can turn into our collections. If you look back to 300 or 400 years ago – when [Dutch painter Vincent] Van Gogh or [Italian polymath Leonardo] Da Vinci were doing these kinds of art pieces, it's just like Facebook, or Instagram pictures, at that time.”
The idea that NFTs are just like regular art or collectibles – that buying a Tweet-linked token or an NFT-backed digital image has the same point of buying a Modigliani or a rare Magic:The Gathering card instead of printing their Google Images versions – is often brought up in crypto circles. What is hard to grasp, though, is how exactly one would enjoy the experience of owning @jack’s tweet: just by caressing one’s phone screen? Using the tweet as a screensaver? Plastering framed A2 printouts of the tweet all over one’s pied-à-terre? Theoretically, all of those; but the crypterati’s long-term perspective is that all of this will make sense once virtual worlds become a thing.
“We see the future of NFTs being connected with other emerging technologies – mixed reality, IoT, and spatial computing – where people will start interacting with virtual infrastructure and virtual landscapes that sit on top of the physical reality,” says Nadya Ivanova, COO of emerging technology insights company L’Atelier. “We'll start interacting with these [virtual] objects literally, whether it's a virtual pet, an accessory, or my avatar, or a piece of art.”
The tame version of this is NFTs being used as special objects in sophisticated iterations of games like Fortnite or Pokémon Go. The most radical version of this vision has to do with the open Metaverse – a Ready Player One-esque virtual universe powered by the blockchain and controlled by no single company– where holding an NFT will translate into being able to use it and flaunt it in-world. The owner of an NFT-linked virtual car will be able to drive it from their virtual castle to their virtual chalet; the legitimate owner of Beeple’s NFT art will be the only one able to hang it on their virtual mansion’s walls; the owner of a Dorsey tweet will be able to tote it about like a unique virtual placard. “If you think about NFTs, they are actually social assets – if you take a piece of art it could be a signifier of cultural context to an avatar, it is an expression of identity,” Ivanova says.
All that is exciting – and, in the age of pandemics and social distancing, it’s not wise to underestimate people’s desire to spend money to look snazzy in digital realities – but it also seems premature. Ivanova herself thinks that there is a “ten-year horizon” before we get there, which is the kind of time horizon that keeps shifting forward the closer you come to it.
One less starry-eyed way of looking at whatever is going on with NFTs right now is as a typical cryptocurrency affair. The closest comparison to it is the ICO (Initial Coin Offering) bubble of 2017-2018, when thousands of founders and hustlers started flogging cryptocurrency tokens that were supposed to be used on online platforms that hadn’t been developed yet. Of course, almost nobody cared about those services: the value of those tokens, in actuality, was that they could be traded and speculated upon in cryptocurrency markets, as if they were penny-stocks. Inevitably, scams were exposed, family savings went up in smoke, and the bubble popped.
Financial regulators took notice and started slapping companies behind ICOs with lawsuits and fines for selling unregistered securities or stocks – which in some cases led to the tokens being kicked off cryptocurrency exchanges. Today, the best way to make sure that authorities never deem a token a security is calling that token art, or a collectible. Those things are positively not securities, yet they can still be traded and played with like crypto tokens. That is not to say that there are not good reasons to experiment with NFTs and digital art: it is to say that cryptocurrency markets are always looking for new assets to pump to the Moon and beyond. Is a tweet worth more than $2.5m? Probably not.
There might be something else at play: a kind of nihilistic panache in the best of crypto tradition. Luke Heemsbergen, a lecturer in communications at Melbourne’s Deakin University, says that the current moment is driven by buyers that regard themselves as financial libertines and memelords. “It’s an internet in-joke, until it's not, and people are making bank,” he says.
“They serve as a reminder that ’the rules’ whether finance, IP [intellectual property], or culture, are completely made up. And those willing to rewrite those rules, and [who] have people believe them, can be the ones that profit,”Heemsbergen says.
The auctioning of Dorsey’s tweet is the epitome of that redrafting of the rules. And it is not even the most extreme case. On March 6, the NFT of an audio recording of singer Azealia Banks and her boyfriend Ryder Ripps having a presumably noisy intercourse sold for $17,000, and was later resold for $260m. Last week, a group of cryptocurrency investors burnt an original Banksy work to the ground, and then sold it as an NFT – representing literal smoke – for $382,000. Tokenised farts are the next logical step.
Gian Volpicelli is a senior editor at WIRED. He tweets from @Gmvolpi
This article was originally published by WIRED UK
