NFT Sales: The Good, The Bad, and The Ugly

The internet was abuzz last week when the YouTube classic, “Charlie Bit My Finger,” was auctioned off. The winner would gain the NFT rights to the video and presumably remove it from YouTube. One of the first notable NFT sales was of this image by artist Beeple that sold for $69 million.

“Charlie Bit My Finger” is one of the first videos to go viral. It went from the new video streaming site to being referenced in mainstream media. It is an important part of internet history and still enjoyed today by millions. The original poster of the video, Charlie’s dad, stated he would take down the video once it sold. Social media began to debate the importance of preserving history and the video owner’s rights. In the end, “Charlie Bit My Finger” sold for $760,999. The new owner decided to leave the video up, and preserve it for history.

We got lucky this time, but the rise of NFTs means this will happen again. Let us go over the good, bad, and ugly of NFTs. First, what is an NFT? NFT stands for Non-Fungible Token. It is a unit of data stored on the Ethereum blockchain and can’t be duplicated. The NFTs are used to represent a digital item like video, music, audio, etc. The buyer gains control of the NFT and the item it represents. That is a simplified version of the complex world of blockchains and cryptocurrencies.

Now on to the good aspect of NFTs. Artists struggle in a digital world to keep their work from being copied and getting paid for their efforts. With little effort, someone can grab your work and sell it on sites. With an NFT, the artist has proof they are the original creator of the work. Artists can use the claim to force sites to take down stolen work. They can also sell the right at a fairly cheap cost to themselves. Sites have cropped up where an artist can post there work and receive their much-deserved funding. NFTs can be the signature artists need for a digital era.

The bad is here. Cryptocurrency relies on trends. The right mention on Reddit or a new company recognizing a coin could throw everything out of wack. This rollercoaster is similar to NFTs. We all heard about “Charlie Bit My Finger” because the video is famous, and mainstream news sources shared the story. But a struggling artist who posted a new song now becomes a PR machine. They have to pitch their work constantly, hoping it goes viral. Also, in the last week, the market for smaller creators has plummeted. The NFT bubble has popped. Bigger rights like famous songs and videos will still do fine, but those who had seen NFTs as a new way to work as an artist are now seeing its limitations. NFTs are still too volatile to depend on.

The ugly is what we should all worry about. If the new owner of “Charlie Bit My Finger” wanted to take down the video, it would have been lost to the public. Digital art only becomes fiscally valuable if it happens to trend. The value is not in the original poster’s effort but in the publics’ interest. At that point, it belongs to all of us. We will likely see more publically loved content auctioned off. Next maybe your favorite video or song. We need to be vocal to keep our shared content available to everyone.

Here is the classic Charlie Bit My Finger video published 14 years ago.