NFT : Is this digital asset really mine?
Do you remember “Disaster Girl” meme? On the picture, first published in 2005, a little girl is smiling in the foreground while a house is burning behind her. The original photo has been sold for $473,000 to Ben Lashes, a NFT entrepreneur. The seller: Zoë, the little girl on the photo, is now 21 and just wanted to make money to pay her student loans. Thank you NFTs !
Some words on “Disaster Girl”
This famous meme has been used to illustrate malicious side in posts, tweets of millions of Internet users worldwide. Her father has already explained the real story behind this photo : it was an intentional fire controlled by firefighters (also on the photo), when he asked her daughter, Zoë, aged four, to strike a pose in front of this burning house.
Now aged 21, Zoë sold the original photo as a non-fungible token (NFT) to Ben Lashes, NFT entrepreneur but also known as Grumpy Cat’s “meme manager”. Yes, MEME manager! Just for information: Grumpy Cat has been sold for $83,000 in an NFT auction. But it’s not the strangest NFT generated. On March 12, 2020, a 52-minute recording of farts have been put on sale on Open Sea Platform. You can also buy a NFT for a virtual dinner for one (Dhaliwal, 2021). Twitter’s CEO sold it’s first-ever tweet for $2,9 millions. A tweet… something every Twitter user can read…
Let’s investigate this (not so) new digital asset and what is at stake for owners’ psychological ownership.
What is a NFT ?
Non-fungible tokens or NFTs are like digital certificates of ownership for virtual asset generated by a blockchain. So, each token is unique and not interchangeable, compared to fungible tokens like Bitcoins.
“In terms of economics, fungibility refers to the interchangeability or equivalence of each unit of a commodity with other units of the same commodity” (Singh & Singh, 2021 : 309)
“Therefore, it’s not like a Bitcoin or a dollar bill, where one can simply be exchanged for another. If compared to objects of value, an NFT is more like a car, or a work of art, or a piece of real estate. Each one is valued based on what the market will pay for it as an individual item” (from ValueWalk, 2021).
Catch them all ?
Today, NFTs are best known for virtual collectibles. Indeed, NFTs have been popularised by the game Crytokitties with which users could trade digital artwork (lovely cats) as unique digital assets. Very popular in NFT world, Sorare is like a fantasy football league: users can “collect” (buy and sell) their favorite football players, like digital collectible cards, create their own team and compete with other teams, with other NFTs’ owners. Each card generated by Ethereum blockchain is unique (and verifiable). Sorare is already working with the most famous football clubs like Paris Saint-Germain, Juventus, Bayern Munich…
In the gaming industry, NFTs can be used to tokenize your own avatar. Today, in digital gaming universes, your avatar can interact with others and make money, like in real life. And that’s a huge difference with MineCraft or Fortnite. In MegaCryptoPolis, “citizens” buy resources with NFTs to build their own buildings. A real economy based on cryptocurrencies.
Is this NFT really mine?
From a social sciences perspective, the consumption of NFTs as digital assets raises the question of psychological ownership: is this NFT really mine?
Psychological ownership has been defined as ‘the state in which individuals feel as though the target of ownership or a piece of that target is “theirs”’ (Pierce, Kostova & Dirks, 2003). This concept has been used to investigate how individuals feel a job, an organisation, a cause, a service, as theirs.
Indeed, a digital good is not valued the same way as a physical good. For the same object (souvenir photos, books…), individuals valued less their digital version than their physical version (e-book vs physical book). Individuals are more likely to pay (willingness to pay) and pay more for physical goods than digital goods (Atasoy & Morewedge, 2018).
In the case of NFTs, they are digital assets which do not exist as physical goods. So, individuals can’t compare them and prefer their physical version. They are only valued on a virtual market, and used in virtual environments. So, how individuals’ value NFTs without any comparison?
Even if they are not tangible, NFTs should facilitate users’ ability to engage with the object, to interact with it (Kirk and Swain, 2018). Digital affordances are key in psychological ownership and that can explain the success of Sorare or MegaCryptoPolis. In Sorare, individuals can compete with their “possessions” in a fantasy football league. In MegaCryptoPolis they can build with resources bought with NFTs. They offer virtual universe, but with real interactions : individuals can “do” and have a feeling of control on their assets. Manipulation seems to lead to more control, and control seems to lead to more psychological ownership.
So, let’s keep an eye on NFTs in sectors like the gaming industry if you want to create and build “for real”. In gambling, you can also bet on virtual horse races. In fashion industry, you can buy virtual clothing collections (and wear them for a selfie !) or also artworks and how artists will reinvent their creations (physical creations VS digital creation) and their intellectual property.
Sources :
Atasoy, O., & Morewedge, C. K. (2018). Digital goods are valued less than physical goods. Journal of consumer research, 44(6), 1343–1357.
Dhaliwal, S. (2021). Benzinga: 7 strange things you can own as A non-fungible token (NFT). Chatham: Newstex.
Pierce, J. L., Kostova, T., & Dirks, K. T. (2003). The state of psychological ownership: Integrating and extending a century of research. Review of general psychology, 7(1), 84–107.
Singh, J., & Singh, P. (2021). Distributed Ownership Model for Non‐Fungible Tokens. Smart and Sustainable Intelligent Systems, 307–321.
