The artist Derek Laufman woke up last weekend to a couple emails from his followers, who had a question for him. They wanted to know if he’d started selling NFTs — non-fungible tokens — of his art. But it wasn’t just email. People had DMed him on Instagram and Twitter, too. “I just replied, that’s 100 percent not me,” Laufman says when I reach him by video call.
On Rarible, a site where people can purchase NFTs, a verified profile had appeared that alleged to be from him — which means that someone took the time to impersonate him all the way through the platform’s verification process. “I was basically kind of annoyed that somebody had, quote, unquote, verified me as on that platform,” Laufman says. “I dealt with having my art stolen for years. And I’m sort of numb to that. But when somebody is claiming to be you ... that kind of, you know, pisses me off.”
After a few people reported the theft and impersonation and Laufman fired off a few messages on Twitter about the situation, Rarible took the profile down. But not before one of his fans had bought an NFT of the work.
While you’ve probably heard of NFTs by now, you’ve probably heard more about digital art selling for exorbitant sums than about the creators who are getting ripped off.
Which is a shame. The promise of NFTs is pretty easy to grasp: if you’re a digital creator, they represent a way to make money off of work that might not otherwise be salable. You can earn royalties from future sales of work in perpetuity — and it can be built right into the object itself. But the reality of NFTs is different, and grimmer.
What’s an NFT?
NFTs allow you to buy and sell ownership of unique digital items and keep track of who owns them using the blockchain. NFT stands for “non-fungible token,” and it can technically contain anything digital, including drawings, animated GIFs, songs, or items in video games. An NFT can either be one of a kind, like a real-life painting, or one copy of many, like trading cards, but the blockchain keeps track of who has ownership of the file.
NFTs have been making headlines lately, some selling for millions of dollars, with high-profile memes like Nyan Cat and the “deal with it” sunglasses being put up for auction. There’s also a lot of discussion about the massive electricity use and environmental impacts of NFTs. If you (understandably) still have questions, you can read through our NFT FAQ.
Artists like Laufman have have had their work minted as NFTs and listed for sale without their permission; and as in that case, platforms that host stolen art only seem to moderate if the artist finds out and posts about it on social media. Tales From The Loop author Simon Stålenhag found his art on Marble Cards, another NFT site, and Giphy has warned that people are turning user-created GIFs from its site into NFTs. Because the NFT system doesn’t require people to actually own the copyright to something to mint it, it’s a market ripe for fraud.
NFTs are unique digital widgets that are typically part of the Ethereum blockchain and can be used to identify the owner of a piece of digital art. Any digital object can become an NFT, as long as it’s been “minted,” or put on the blockchain as a token. They’re sort of like trading cards, if the card was digital and pointed to the URL of a JPEG. And because these tokens are represented on a blockchain — which is predicated on burning cheap electricity to solve mathematical puzzles, which when solved pay out some amount of cryptocurrency — there is an as yet unspecified negative environmental cost associated with transacting them.
The whole system is predicated on the understanding that the people minting NFTs are who they say they are. Would you buy a GIF of Nyan Cat for $560,000, for example, if the creator of the meme wasn’t the person who was selling it as an NFT online? Because anything can be tokenized on the blockchain — where, by the way, the record is immutable — anything can end up as a NFT, even if the creator of an artwork isn’t the person selling it online for Ethereum.
While it’s unclear whether the problem is widespread, many artists have started checking sites like OpenSea and Rarible to see if their work has been minted without their permission. “I’d seen a few posts going around of people who’d had their art stolen,” says Devin Elle Kurtz, an artist and visual developer, when I reach her by phone. So Kurtz decided to look around to see if her own work had been taken. “And I was like, you know, it probably hasn’t. You know... it’s probably fine.” As the narrator of this story, I can say: it wasn’t fine.
“I searched my name and sure enough it came up,” Kurtz says. “One of the first results was my art on this Marble Cards website.” The piece in question was around five years old, from her DeviantArt account, and it had made it to the front page of the website. “The person who turned it into an NFT had, like, put their handle all over it,” Kurtz added. “Like, all over the frame, they’d like put their watermark on it with their Twitter handle.” Which is very weird!
“I don’t know who that person is, and they may not have known they were doing anything wrong,” Kurtz says. “Nothing against that individual if they didn’t realize that what they were doing might not be the greatest.” It was priced at 1.03 Ether, which as of publication time works out to $1,844.03; it’s still up, though Marble Cards removed the image at Kurtz’s request. But the NFT — the frame around the URL in the case of Marble Cards — will continue to exist forever, on the blockchain. (Marble Cards is unique in that it lets users mint and trade “frames” around artwork, rather than the artwork itself, theoretically avoiding copyright issues — though artists clearly disagree.)
Kurtz’s experience is emblematic of the big problem with NFTs, generally speaking: anyone can mint anything. All you need is an Ethereum wallet and some cash for “gas fees” — in other words, the cost of doing the transaction to put whatever you’re minting on the Ethereum blockchain.
On OpenSea and Rarible, two major NFT platforms, you don’t have to verify you own something before putting it on the blockchain. Verifying yourself on these platforms is also not difficult; Rarible’s process involves submitting social handles for verification but doesn’t seem to check whether you own those handles, as in Laufman’s case. OpenSea, on the other hand, has foregone verification entirely. Its recommendation for buyers is now, “Do your own research.” (Neither platform had responded to requests for comment at press time.)
I spoke to the independent crypto journalist Amy Castor to get her opinion on this kind of NFT fraud. Castor recently wrote a story for her personal website about the biggest sale in NFT history — of the artist Beeple’s work, which the famed auction house Christie’s sold for $69 million — alleging that Metakovan, the pseudonymous buyer, bought the work to finance a pump-and-dump scheme with another token they own, B.20.
“Anybody can create an entity about anything and just sell it on a marketplace. There probably aren’t that many protections in place. But, I mean, the key thing is you’re not buying anything,” Castor says when I reach her by phone. “If you buy identity as a token, it’s just this coin. There’s really no intrinsic value to it, other than what somebody else is going to pay you for it,” she continues. “It’s all speculative at the end of the day.”