Pudding Daintytot is a pink cat, with hearts sprinkled over its chest, a rainbow cresting behind it, draconic horns, wings and a tail.
“Born” in January 2019, Pudding is a “cryptokitty”: an example of what is known as a “non-fungible token”, the latest cryptocurrency craze – unique images, film clips, animations and even poems, which are bought and sold online for increasingly large sums.
Each cryptokitty is registered to a bitcoin-style database, and can be traded – and bred – according to algorithmic rules set down when the CryptoKitties service was set up back in 2017 by the Canadian startup Dapper Labs. The end result is a game, or art piece, that is somewhere between a real-world game of Pokémon, an automated replacement for the authenticity department at Sotheby’s and digital trading cards.
And if you want to join in, Pudding Daintytot is on sale for $1m (£710,000).
As with so much in the cryptocurrency industry – the name for the field that has grown up around bitcoin and its core “blockchain” technology – the most eye-catching thing about cryptokitties and their ilk, beyond even the lurid colour schemes, are the sums attached to them.
Cryptokitties were just the first enormous boom of the craze for non-fungible tokens, or NFTs. The name comes from the main difference between these projects and mainstream cryptocurrencies such as bitcoin or its hipper offspring Ethereum. Those currencies, just like real money, are “fungible”: that is, one bitcoin is functionally identical to another.
The insight behind NFTs is that that need not be the case: each individual token could represent anything its makers want. While they could still be traded and held in the same way as bitcoin – stored on a decentralised database, without any ruling authority in charge and outside the reach of much government oversight – they could represent, not just simple cash-like balances, but ownership of artworks, songs, videos or poems.
The leaders of the latest boom occupy various points on that spectrum. At the commercial end is NBA Top Shot, a spin on trading cards, officially licensed by the National Basketball Association, made by CryptoKitties developer Dapper Labs. Collectors can buy booster packs containing a random collection of short clips of basketball games in action – and they can then trade and sell those clips on a digital market. In the six months since it went live, more than $200m has been traded on the market, including a single clip of LeBron James dunking, which went for $208,000.
At the other end of the spectrum are artist-focused systems such as Zora, Foundation and SuperRare, each more open-ended offerings that allow artists to create their own digital markets for their works. In 2020, the digital artist Beeple, who makes grotesque hyper-real political cartoons, sold more than $3.5m of artworks through one such system, selling multiple editions for $969 and auctioning 21 unique pieces for six-figures.
The money is enticing, but the field raises questions. Chiefly, for many: why? What is the actual point?
“I don’t find NFTs enticing as a platform for releasing art on,” says v buckenham, a London-based digital artist who ought to be the target market for the systems. “The point of owning a piece of art is to look at it and enjoy it – and buying an NFT doesn’t do anything to help you do that. An NFT is just an entry in a fancy database somewhere asserting that you ‘own’ the artwork. The only thing it’s good for is allowing you to sell on that database entry to someone else later on.
“I have sympathy for digital artists who are releasing work as NFTs,” they add. “It’s hard to make money as a digital artist, and hard to turn down a new revenue stream. But NFTs don’t really have anything to do with the artwork themselves. If you look at an NFT entry, it’s just a hash, a string of numbers and letters, and doesn’t let you view the art itself. It takes the worst of the high-end art market – works sitting around in air-conditioned warehouses in ports, being speculated on but never actually being looked at – and makes it a thousand times less ecologically friendly.”
Just like bitcoin itself, the energy cost of the NFT field is astronomical, if hard to quantify. The databases work by burning untold gigajoules of power (bitcoin’s energy usage is more than twice that of Apple, Google, Amazon, Microsoft and Facebook combined), and the novelist and digital artist Robin Sloan estimated that by idly experimenting with the field one afternoon he created almost half a tonne of carbon emissions.
But Sloan thinks the projects could be more than simply speculation. His own NFT turns the field in on itself: he creates “amulets”, short poems with mathematical properties that happen to create a pleasing coincidence in the very plumbing of the network itself, with strings of eights in their code. And Sloan, as the creator of his own protocol, can add one further requirement: “A carbon offset [1 metric tonne or more] is purchased to compensate for the CO2 produced by the poem’s life on the blockchain, with proof of that purchase included in the poem’s metadata.”
So far, just six amulets have been discovered, and one of the first is pleasing in its simplicity. It reads, in full: “DON’T WORRY.”
This article was amended on 26 February 2021. An earlier version said cryptokitties were the “oldest major example” of NFTs. This has been amended. While cryptokitties were the first NFTs to enjoy a major boom there were older forms of NFT, some of which later boomed.