NFTs are known for many things but at their essence, they are about “proof of ownership”. Let’s take publishing as an example: we can consider an NFT as proof of a reader’s ownership of a book. This proof of ownership is what transforms reproducible digital content that is fungible (i.e. unlimited identical copies can be made) into digital content with uniqueness and scarcity that can be “possessed”.
In this decentralized publishing (DePub) era, we may already be witnessing the emergence of another Amazon, the super bookstore; if publication is defined more broadly to include all digital content, OpenSea could already be viewed as a “metaverse Amazon”.
Speaking of Amazon, the renowned startup accelerator AppWorks once compared the NFT market in the metaverse to traditional web-based e-commerce. Such an analogy has both positive and negative implications, specifically regarding the role of counterfeits.
On public e-commerce platforms, such as Taobao, counterfeits are ubiquitous. And there will be no exception for the NFT market in the metaverse. In fact, piracy could be even more rampant than that of physical products because forgery and duplication in the metaverse has barely any cost. As proof of purchase, an NFT confirms the payment of the buyer and his ownership of certain digital content. Yet, it cannot validate the authenticity of the digital content, which means it cannot prove that the content is sold by the creator himself or an authorized party. This subtlety often goes unnoticed by the general public.
Two aspects of DePub
DePub can be divided into two aspects: i) property rights and traceability with technologies such as the international standard content number (ISCN) to record the relation between the creation and the author; and ii) possession and sales with the NFT as the proof of the connection between the creator and the buyer.
Ideally, the creator of an NFT is either the author himself or the authorized party; in reality, technically anyone can forge the Harry Potter NFT. It is commonplace that people intentionally pirate others’ digital creations and create NFTs for sale. More outrageously, “copy minters” brazenly reproduce an existing NFT in another blockchain. It is no different than businessmen in developing countries in the physical world selling counterfeit, imported goods. This same pattern is reenacted in the metaverse.
In the current DePub ecosystem, blockchains are mostly applied to possession and sales. While the significance of NFTs in preserving cultural values is recognized by many, no one can deny that the current craze for NFTs mainly stems from speculation and the chance of making a quick buck.
Property rights and traceability are definitely an area of concern. After all, if we inadvertently buy a worthless counterfeit, it will be a complete waste of money. However, the existing ways to verify authenticity are extremely centralized. Blockchains are rarely used and decentralized consensus is given short shrift. This is fundamentally the same as how “official” entities in conventional e-commerce like Taobao and Shopee help buyers authenticate products.
It would be a mistake to regard OpenSea and its counterparts as decentralized NFT markets. The truth is that OpenSea is “a centralized market selling decentralized products like NFTs”. OpenSea lacks transparency in how it decides to authenticate and ban the NFTs that are sold in its marketplace.
In order to fully understand the division of DePub into i) property rights and traceability and ii) possession and sales as discussed above, it is important to understand the argument that published materials are “NFT immigrants”.
The Internet which emerged in the 1990s divided the world population into “digital natives” (Generation Z) and “digital immigrants” who navigated the Internet for the first time in university or at an even older age. It is baffling that the Internet which was born 30 years ago is still labelled by some as “new media” today. Such labelling reflects they still see things from the perspective of the “old media”.
The Internet liberates information from physical restrictions while blockchains take a further step by liberating assets from physical restrictions. With the gradual popularization of blockchains, history will definitely repeat itself in dividing the world into “blockchain natives” who come of age with the blockchain while clueless about telegraphic transfer and “blockchain immigrants” who have come all the way from traditional banking and financial systems to cryptocurrency.
Just as there are two generations of users, there are two types of content. At the dawn of the Internet, publishers were busy uploading newspapers, magazines and books to the Internet, constituting “digital immigrant content”. After 30 years, more and more creations and reports are now born on the Internet as “digital native content”.
While the majority of Generation Z are Internet-savvy, they are uninitiated in blockchain technology. 99.9% of the existing digital native content is not stored on blockchains or using technologies such as IPFS. Their failure to do so is not a condemnation of decentralization; it’s simply because people don’t deem it necessary.
I have been popularizing the science of blockchains and decentralized technology, and both Hong Kong and Taiwan readers find it comprehensible. But it doesn’t seem likely to the Taiwanese that The Reporter will get shut down; or that the Liberty Times gets closed; they don’t worry that Taishin Bank will freeze their assets. People in Taiwan only get an inkling of these possibilities by seeing what happens in foreign places like Ukraine and Hong Kong. To Hong Kongers though, what is only a distant worry to the Taiwanese is instead an excruciating part of daily life; with their vivid experience, they can understand the concepts more thoroughly.
Vast amounts of media content, including that from Apple Daily, RTHK, Standnews and Citizen News, have been forced to vanish over the last year. The disappearance of digital content is much more devastating than the cessation of print publishing. The latter simply leads to a silent future while the former involves a downright eradication of the past, present and the future. Apply Daily is a prominent example: 26 years of content disappeared into thin air overnight when Apple Daily’s website shut down.
“The struggle of man against power is the struggle of memory against forgetting.” Hong Kongers worked to back up civic media on the blockchain for preservation. Although technology guarantees that the copies can no longer be tampered once they are recorded on the blockchain, it fails to ensure their content is identical with that of the original due because there is no way to ensure that the data has not been altered, either intentionally or unintentionally due to format changes.
Aside from preservation, the other most common motive of uploading digital content to blockchains is to create NFTs for sale. Creators, publishing houses and distributors are scrambling to transform their intellectual property (IP) into NFTs to cash in. Such content, be it animation, photos or music, was all launched before but certainly not recorded in blockchains. They are not even digital native content, let alone NFT native content.
Whether the motivation is historical preservation or selling NFTs, all of the content mentioned in the previous use cases are categorized as “NFT immigrants” since the content is transported from printed materials or the Internet to the metaverse. The record in the blockchains is just a backup with all the attendant problems of verification. For historical preservation, these problems lead to misinformation; for those selling NFTs, these problems create an opportunity for counterfeits.
The above issues are exactly why ISCN exists: to prove the identity of content so that “NFT immigrant” content can be better verified.
Given the presence of NFT immigrant content, would there also be NFT native content? The answer is yes, and I believe these “NFT natives” will lead a new revolution in content creation and dissemination.
The growing market for generative art in OpenSea and other markets can be seen as evidence for the growth in “NFT native” content. Certain generative art projects mint images directly onto the blockchain based on algorithmic combinations of visual components.
Let me share a story illustrating how quickly we adapt to digital native life:. I once had to sign a document but I couldn’t find anything but an Apple Pencil in my office. As a writer, I still use expressions like “put pen to paper” and “slip of the pen”, all of which have become archaic terms. Practically, I work on the keyboard with occasional “typos”. After all, I haven’t used draft paper for over two decades. I wonder whether Generation Alpha, those who grow up with the iPad as a toddler, even know what draft paper is.
Undeniably, there still exists some traditionalists who insist on using physical paper and pens and I admire those intellects blessed with neat handwriting. Traditionalists justify their adherence to the pen and paper by pointing to the unique sensation from using paper and pens, the history and tradition behind the written word and if nothing else, an adherence to an old habit that they don’t see any need to give up. Ultimately, it is all about personal preference. However, in terms of practicality, it is objectively much more efficient to create a written work digitally for editing, typesetting and publishing. Paper, pens and calligraphy are outstanding parts of our history and culture that should be preserved, but it is inevitable that these tools will gradually fade away from work and daily usage.
The process of transitioning from physical to digital content and from digital natives to NFT natives will be similar in nature. As NFTs continue to grow in popularity and usage, it’s inevitable that word processing software will offer the option to “save as an NFT”. If even that is too cumbersome for the user, the software will just automatically save the work as an NFT.
We already have the technology to create NFT software like this. But the technology is still not user-friendly enough, the cost is too high and there is too little user demand. But all this will change with time. Bear in mind that many of the same people using a keyboard every day now once found word processors expensive, challenging, and inferior to paper and pen.
NFTs are so popular that nowadays some people decide to sell NFTs before they even decide what to create. This is like planning to sell drinks before thinking about what drinks to produce, epitomizing the idea that “the medium is the message”. Theoretically, expression, creation and publishing are one thing while the carrying media and the way of monetizing are another. But in the digital art world, a digital art project not using the blockchain is almost “unmarketable”.
Odd as the phenomenon is, the NFT is still in its infancy. When we have become more adapted to, or weary of the current NFT ecosystem (who wouldn’t get fed up with buying NFT avatars eventually?), the industry will develop into one that better integrates content creation tools into NFT-making tools.
Already, there are projects aimed at creating “NFT native” content: Numbers Protocol’s Capture and LikeCoin’s depub.space are two of them. These allow users to create “NFT native” content and integrate the context and background of creations into NFT metadata, seamlessly fusing the creation process with monetization.
In the future, more instruments will be available for fusing traditional content with NFTs. For instance, the most direct way to create “NFT books” is to turn an ePub into an NFT for sale. Akin to the early stage of the Internet when conventional media uploaded the entire newspaper with the original typesetting to the web, simply converting ePubs into NFTs will be a transitory stage, at best. Whether “NFT books” will be dominated by Amazon or by traditional book publishers hinges on who can make better vintage wine in new bottles.
When NFT native content becomes mainstream, the disparity between the two aspects of DePub (“property rights and traceability” and “possession and sales”) will be increasingly inconspicuous. Blockchains will be used from the record of creation to the public’s collection, hence blockchain will be used end-to-end throughout the entire publishing process.
Despite being a technological optimist, I am not sanguine enough to be convinced that disinformation and fake products will be completely gone in the age of NFT native content. But at the very least, data in the blockchains can help the industry determine the authenticity and help combat piracy. Hopefully, decentralized NFT markets, publishers and fact-checking organizations will also evolve to further combat disinformation and fake products.
Decentralization as opposed to disintermediation
Speaking of publishers, some may presume that publishers will die out in the DePub era. It’s important to note that decentralization and disintermediation are two drastically different concepts. The practice of DePub doesn’t totally negate the role of publishers. At least I don’t think so.
I always believe that as long as a person or an organization continues to generate value, they will continue to exist even after a paradigmatic shift in the marketplace. For example, after the proliferation of smartphones, telecoms are no longer the gatekeeper to mobile users and app stores have become the only source for users to download apps. That said, the telecommunication firms haven’t been rendered irrelevant. By offering broadband services, they have become even more profitable. By contrast, those incumbents that rest on their laurels, or more vulgarly as the Chinese saying goes, “squat on the toilet without taking a shit”, and have a complacent and perfunctory attitude will be doomed to failure as the market shifts to the new paradigm. Any change in roles will be because an actor is providing less value, not because the functioning of decentralization is biased against them in any way.
Publishing houses are multi-functional and must embrace this multi-functionality to survive. Although certain roles may fade out in the DePub era (such as certain accounting functions which will be replaced by smart contracts), the roles of publishing houses in content sourcing, editing, curating and promotion will not evaporate just because of DePub. If publishing houses do fall, their failure will be attributable to their failure to adapt to their new roles under the NFT native paradigm.
As a wordsmith myself, I have been searching for ways to survive in this new era. I don’t believe in guaranteed success, but I strongly believe that the rising prevalence of blockchains makes it necessary for conventional publishers, creators and reporters to thoroughly understand the nature of the digital world. They should also recognize it as a medium comparable to the physical world, and understand that each world has their own strengths and weaknesses. Success in the new era lies in understanding that the digital world is not just a virtual world subordinate to the physical world.
As an example of the risks that come with subordinating the digital world to the physical one, think about the issue of copyright. The word “copyright” literally means “the right to copy”. You only have the right to copy a book if you are the author, so that more people can own your book. Copyright is derived from the logic of the physical world. As we’ve seen, mechanically applying it to the digital world triggers various problems.
In the physical world, the basis of copyright lies in the ownership of a high-quality original version and the cost involved in duplication. In the digital world, any content can be copied endlessly at almost no cost without a “bit” of difference. With digital content, the concept of “possession” becomes vague, let alone the related concept of “copyright”.
While some traditional media are still making the transition from print to digital, NFTs create a new frontier for further exploration. NFTs support new ideas about what constitutes “ownership” more appropriate for the digital age while retaining the digital characteristics that enable endless (and cheap) replication. Prohibiting copying will no longer be a prerequisite of making profits; and at the same time possession will no longer be a prerequisite of access to the content . The business model of digital content creation and monetization will be challenged again just after finding consumer acceptance of the streaming and iTunes purchase models.
The rise of NFT is unstoppable, but the details of the future that NFTs are ushering in are yet to be finalized by the participants in the marketplace. As long as publishers, reporters and creators can put aside their bigotry and acknowledge the merits of decentralized consensus, they can definitely survive, and even thrive, in the new paradigm of DePub.
Cover photo: Openbook
Original: 〈分散式出版 DePub 的發展路徑，NFT 從移民到原住民〉
Translated by: Tse Kwun-Tung
Reviewed by: Henry Oh