LibNFT: a second look...still "nope"

The day after I posted LibNFT: a Project in Search of a Purpose, the project proponents held their CNI project briefing. The recording of that briefing is now online, and I've made some annotations on the recording transcript. I came away with a more nuanced understanding of the proposed project, but no more convinced that LibNFT is useful to pursue. The speakers talked about a number of drivers for the project, and three of them stood out to me: building community around their collections with a little money on the side, improving discovery of digital archives, and fear-of-missing-out.

Building community

As they did in the whitepaper, the speakers downplayed the intention of turning LibNFTs into a speculative asset. Instead, they want to build communities of users around these assets. The "affinity marketing" phrase was mentioned a few times, so I looked that up on Wikipedia: "Affinity marketing is a concept that consists of a partnership between a company (supplier) and an organization that gathers persons sharing the same interests to bring a greater consumer base to their service, product or opinion. This partnership is known as an affinity group." In this case, the idea is to find users that like the library or archives (as in a university alumni group) or an archival collection (people that are interested in content that you have; Meredith Evans mentioned "miniature books" for instance). These are people that will buy LibNFTs to gain "ownership" in the collection or show common cause with the affinity group. ("Ownership" is in quotes, of course, because linking your blockchain wallet to the LibNFT doesn't give you rights to the collection content—a point explained in the presentation.)

Also mentioned was the possibility of getting special perks for owning a LibNFT. Owning a Justin Bieber NFT gets you access to a special area by the stage or invited to a song release. We're now getting into the realm of artificial scarcity, where limiting the quantity of an item makes it more valuable. Perhaps LibNFTs have unlimited quantities, and anyone can get the special benefits of owning one. It isn't clear what the special benefits for LibNFTs would be that wouldn't be offered to the general public. Surely we wouldn't make someone own a LibNFT to have access to a collection's materials in an archive, would we? And if there was a lecture about an illuminated manuscript, we wouldn't force people to own a LibNFT of that manuscript to attend that lecture, would we?

One last piece about the monetization aspects of LibNFTs. At several points, the speakers asked the audience to set aside the problems with cryptocurrencies: the bankruptcy of FTX, the crashing value of cryptocurrencies and mainstream NFTs, and the general fraud that is happening in this space. The problem is that I don't think you can set aside the cryptocurrency part of this from the smart contract part of NFTs. Does the smart contract that says you own a LibNFT have to have an exchange of value to be valid? If not, what is the difference between transferring a LibNFT to a blockchain wallet and simply posting a list of donors on a webpage? If and until there is a stable cryptocurrency—one likely backed by a government with armed forces and all of that other government-like stuff—it is not possible to separate cryptocurrencies from NFTs. As things are now, the only companies making money in the space seem to be those running the blockchain and NFT infrastructure, a sort of extracting-of-rent from those who think there is money to be made here and fools that are willing to part with their treasure.

Improving discovery

This idea made little sense to me. The Bored Ape Yacht Club got visibility because a bunch of celebrities got paid by a couple of NFT companies to promote their weird ape pictures. There are hundreds if not thousands of NFT collections on OpenSea.io. (I stopped paging through https://opensea.io/rankings in the 900s.) Cultural heritage NFTs are supposed to stand out in that?
Twitter allows people to change their avatar to the picture assigned to an NFT; will this sort of program increase our visibility? (Setting aside, of course, whether it is wise to deeply attach our marketing plans to a social media company's capabilities...as the current Twitter kerfuffle points out.)

Fear of missing out

The last big driver I heard in the presentation was "fear of missing out." Libraries were big in the Web 1.0 space but totally missed the Web 2.0 space. If this is going to be Web 3.0, then we want to get in early, be seen, and influence how this turns out. Well, "Web 3.0", as seen by the venture capitalists funding the current hype, is all about blockchain → cryptocurrencies → NFTs. In other words, venture capitalists want this blockchain thing because they can make money funding companies and then selling their stakes in those when the interest is high. And in order to have high-value blockchain companies, you need something to sell, and that is cryptocurrency. And for cryptocurrencies to be anything of interest, you need something to buy, and that right now is NFTs (although the market is clearly cooling off). Not convinced? Invest an hour watching Crypto: The World’s Greatest Scam.

Now, there is an interesting Web3 idea called the Interplanetary File System (IPFS), or "distributed web". That is an effort to abstract away the web's single-point-of-failure that is the domain name. It is a way to point to this article...https://dltj.org/article/libnft-2/...without relying on the "dltj.org" part. (So if "dltj.org" goes away but "article/libnft-2" is still out there on the distributed web, you'd still be able to get to it.) That is a much more interesting experiment, but unfortunately the "Web 3.0" name—and at times the IPFS technology—has gotten sucked into this blockchain sludge.

Experiment onward, if you want

In the end, if some GLAM institutions want to experiment with this concept and report back to the rest of us, then...I guess...go for it? (If you can justify the expense of the experiment, more power to you.) As I see the blockchain and NFT landscape now, there are other things I'd rather invest time and money into. As I said at the start, I remain unconvinced that this project is even worth the experiment simply based on the current and foreseeable technology. I suppose if someone were to meet me on longbets.org, I could be convinced to wager some amount in support of the Internet Archive (my choice for a winner's charity). In the meantime, I'm going to sit this one out.