Opinion

PINKERTON: If A Non-Fungible Token Is Worth $69 Million To An Artist, How Much Is NFT Worth To Politics?

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James P. Pinkerton Fox News Contributor
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Did you hear the one about the digital artwork — created in the online JPEG format, with no tangible existence in the physical world — that sold for $69 million?

Actually, it’s not a joke; it really happened. On March 11, one Mike Winkelmann, better known as Beeple, sold “Everydays — the First 5,000 Days” for $69.3 million. According to the venerable Christie’s auction house, it was the third-highest price ever paid for the work of a living artist.

It’s easy to laugh about this sale, which brings to mind many other instances of hyped-up prices for works of art. Indeed, one also thinks of other instances of buying mania, from the tulip bubble of the 17th century to the spike in the price of  GameStop shares earlier this year.

Yet what makes the Beeple sale even more interesting — and full of implications for the rest of us — is the presence of a relatively new technology, the non-fungible token, or NFT.

An NFT is a unique identifier, which serves as a sort of exclusive ticket for an artwork, or any other digital entity. That is, if the rap on digital art is that it can be infinitely reproduced and thus has no unique value, NFT seeks to solve that problem by encoding a uniqueness into the thing itself.

To be sure, not everyone is convinced about NFT — there’s evidence that it can be hacked — and yet the buyer, going by the pseudonym of MetaKovan, who paid that $69 million, sure seems to be a believer. (Although some have argued that the supercharged price is just a hustle, aimed at attracting attention, thus generating an even higher price for “Everydays,” to be paid by, hopefully, some greater fool).

Yet if we dwell just on the idea of NFT, we see that it addresses — or, if one prefers, claims that it addresses — some obvious needs in cyberspace: namely, the desire to figure out whom one can trust, and how to certify unique identities for persons, places and things.

Seen this way, NFT is an attempt to re-humanize the World Wide Web by allowing people to prove that they are indeed who they say they are, and that various things are what they’re said to be.

It so happens that NFT is a derivative of blockchain, which today is arguably the hottest — or coolest — technology on the planet. Blockchain is a digital ledger, distributed to computers across the world; proponents say that such duplication is the guarantee of its security. Indeed, blockchain is the underlying technology for cryptocurrencies, such as Bitcoin and Ethereum.

There’s something cultish about these cryptocurrencies, and yet at the same time, the money seems to be real; Elon Musk — surely the global arbiter of tech cool — recently announced that he was buying $1.5 billion of Bitcoin, and the total value of Bitcoin is thought to be $1 trillion. In the meantime, Ethereum was the unit of value used in the Beeple auction, which is to say, Ethereum has its own valuation as well, separate and distinct from Bitcoin — as do myriad other rival “cryptos.”

It’s easy to see all these cryptos as a digital Tower of Babel, built by the techno-hubristic, all heedless, to be sure, of their inevitable downfall.

Yet whatever happens to crypto valuations, the underlying technology of blockchain is here to stay, as it’s now been woven into e-commerce, cyber-security and the Internet of Things — which is to say, everything.

Moreover, beyond Beeple, NFT will flourish as well. Why? Because it’s about people linking up with each other. And people, as Aristotle said, are political animals; we always wish to gather, to compare, to compete — and to conjugate.

And this social and political impulse has persisted even during virtualization, a process which rates as the great megatrend of the last three decades. That is, just about everyone has been living much of his or her life online and onscreen, and by this reckoning, COVID-19 has merely zoomed us faster toward where we were already headed.

Yet being the political animals that we are, we always wish to apply new tools to old tasks, including the specific business of campaigns and elections. By now, everyone in politics is hip to the upsides of social media and big data, and yet we also see the downsides, too, in terms of online bullying, doxing and manipulating.

So now comes NFT, promising a solution to at least some of these problems. That is, the same technology that allows you to be sure that you own the one and only “Everydays” can also assure that you have a unique and verifiable place in the political system: You are who you say you are, you committed to this candidate or cause on this day, and so on — and it’s all as transparent and visible as you wish it to be.

Perhaps even more importantly, NFT can prove that an entire group has done something, or is willing to do something.  Thus NFT can bolster the viability of parties and coalitions, by making visible, in real time, the collective power of supporters; indeed, NFT can even show that they are, in fact, voters.

Yes, NFT can be used to identify and aggregate a voting bloc, which is plenty powerful. Moreover, NFT can then be further used to document that the bloc actually voted as pledged — and that’s really powerful. Is there a secret ballot? Sure there is. And yet there’s nothing stopping voters from proclaiming — even displaying — for whom they cast their ballots.

That’s what rapper-turned-presidential candidate Kanye West did last November, when he tweeted out a video of himself slipping his ballot — in which his vote for his candidacy was clearly marked—into the voting machine.

To be sure, West’s campaign didn’t do so well.

And yet the potential power of a public commitment to vote, verified by NFT, is paradigm-shiftingly enormous.

James P. Pinkerton, a former White House domestic policy aide to Presidents Ronald Reagan and George H. W. Bush, has been a Fox News contributor since 1996.