On Tokens, They’ve Spoken

A term we've never heard of on, say, New Year's Eve can become a global pandemic — or a worldwide investment phenom — by St. Patrick's Day.

Such was the case this year with NFTs, or non-fungible tokens, a new technology that's being used on the internet to trade for digital goods.

In March, Twitter CEO Jack Dorsey sold an NFT for his first tweet to a Malaysian businessman for the equivalent of $2.9 million. Then came word from Fox Entertainment CEO Charlie Collier that Krapopolis , an animated comedy coming to the network next year from creator–executive producer Dan Harmon (Community, Rick and Morty), will be "curated entirely on the blockchain."

What does that mean for fans of animated comedy? Well, it won't change the viewing experience. The show, set in ancient Greece, is said to feature a flawed family of humans, gods and monsters. But for those the network calls "super fans," Fox will offer a marketplace of digital goods related to the show, including NFTs of one-of-a-kind character and background art and GIFs, as well as tokens good for exclusive social experiences.

And that new business model will reap benefits for advertisers, Collier told sponsors at the network's upfront presentation in May. "As an advertiser-focused, artist-first and animation-obsessed company, Fox is going to take advertisers into the world of blockchain-powered tokens, including NFTs." (Indeed, the animation studio behind the show, Bento Box, is owned by the network, and the series is the first fully owned and financed scripted series from Fox Entertainment.)

But, back to those NFTs...

Without delving too deeply into their vast complexities, NFTs are part of the same blockchain as Ethereum, the second-most-popular cryptocurrency next to bitcoin. Blockchains are decentralized databases that store — ostensibly, in a more secure way — transaction ledgers in, well, "blocks" of ones and zeros.

Cryptocurrencies like bitcoin, dogecoin and Ethereum are fungible — they can be traded for each other and broken down into denominations, the same way a twenty can be exchanged for four five-dollar bills.

An NFT is basically a certificate that establishes ownership of a piece of digital content, like a still photograph, a song, a GIF, a screen grab from a video game or even a tweet. And it's non-fungible, meaning it can't be traded or replaced by something of identical value.

Registering an NFT isn't the same as copyrighting. In fact, you can buy an NFT for a piece of digital art, and the original owner can still control the copyright. And an NFT doesn't keep  others from using and sharing the work. An NFT is merely part of a ledger securely stored on a blockchain, showing the registered owner.

NFTs are being called a boon for individual artists. But for entertainment companies — which have struggled for more than two decades to control their assets on the internet — the ability to mark a little territory is downright revolutionary. Consider that when stills of Krapopolis turn up on social media as memes, NFTs will provide a way for Fox to establish ownership of the images — and make millions by selling those NFTs.

Fox isn't the only entertainment company taking the NFT plunge. In April, Anonymous Content signed a development deal with former Major League second baseman–turned– digital artist Micah Johnson, acquiring rights to Aku, a digital character he created.

The inspirational character — a Black boy in an oversized space helmet, who dreams of becoming an astronaut — has already established itself as an NFT sensation. When Johnson introduced Aku in February, he sold more than $2 million in tokens in about 36 hours.

So it's not surprising that entertainment companies want in on the action. As Johnson noted in a statement announcing his deal, "A small Black crypto community mobilized behind Aku at launch and told the world, 'This is a character we want in the world.'"

This article originally appeared in emmy magazine, Issue No. 10, 2021