“NFT” (Non-Fungible Token) ranked first in the 2021 Collins Dictionary’s Word of the Year. It is an existence that can connect virtual currency, blockchain, metaverse, and other emerging concepts.
NFT is a type of virtual cryptocurrency and a symbol of the latest development stage of blockchain technology. It is also an effective path to the metaverse. Moreover, the emergence of NFT technology has opened up new profit channels for the news media.
This article will focus on exploring the opportunities and risks faced by the news industry under the application background of NFT technology.
01
Concept Origins
NFT (Non-Fungible Token) is a type of cryptocurrency based on blockchain technology. It has characteristics such as data structure, distributed storage, encryption algorithms, and consensus mechanisms. After content is “NFT-ized” into digital assets, it is attached with a unique proof of rights and records of transactions and modifications, enabling it to be “authenticated”.
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The biggest difference between NFT and other cryptocurrencies like Bitcoin lies in its “non-fungible” nature. Although the value of early cryptocurrencies like Bitcoin may fluctuate, they are fungible, meaning that the value of the same amount of Bitcoin remains constant and can be exchanged at an equivalent value, possessing the same purchasing power. In contrast, NFTs have uniqueness and scarcity, and their value is determined by those who want to purchase them. Anyone can create NFTs, and the value of certain NFTs may be high while others may be overlooked. The value basis for the exchange of different NFTs is determined by the parties involved in the transaction.
02
Application of NFT Technology in the News Industry
NFT also has another more popular name, which is digital collectibles. This is also the main application form of NFTs. Digital collectibles refer to unique digital certificates generated for specific works of art or creations, enabling real and trustworthy digital issuance, purchase, collection, and usage while protecting their digital copyrights.
In the wave of technologies such as blockchain, the phenomenon of “everything can be NFT-ized” has become a spectacle on the Internet, where even an image that seems inexplicable can be sold for a sky-high price.
In the news field, the first to trade news article texts as NFTs was Quartz, an American financial news website. They auctioned off a news article for $1,800. Social media platforms are also not falling behind. Jack Dorsey, the founder of Twitter, sold the NFT version of his first tweet from 2006, which consisted of only 5 words, for a staggering $2.9 million.
Traditional mainstream media such as The New York Times has also taken a substantial step in entering the NFT market with their unique content products. Kevin Roose, a technology columnist for The New York Times, auctioned off a column article introducing NFTs in the form of an NFT, ultimately selling for $560,000.
The NFTization of “passes” for on-site news coverage has become a new trend. USA Today auctioned off the first on-site reporting “pass”, allowing the buyer to visit the Kennedy Space Center with the reporter and exclusively interview astronauts. This NFT was eventually sold for $8,000.
In China, Xinhua News Agency has also released a limited edition of selected news photography reports for 2021 in the form of China’s first set of news digital collectibles. This marks the entry of China’s “national team” in the NFT digital collectibles market.
03
Opportunities brought by NFT technology to the news industry
1. New profit possibilities through the NFTization of news resources
News media organizations can expand their profit channels through the “NFTization” of their content, both through content IP operations and news content publishing.
With the shift of news hotspots, news events can easily become “old news”. The issuance of news digital collectibles gives “old news” value in the blockchain. NFT technology can be used not only for the content IP operations of news media organizations, but also as a new form of content payment. News media organizations can store NFTized news content on the blockchain, innovate traditional membership and subscription systems on blockchain platforms, fully utilize the security of distributed systems to protect user rights, as well as protect the copyright and revenue of news media organizations for news content.
2. Verification of authenticity and realization of crowdsourced news
The use of NFT technology can extend from the presentation of news to the production of news. The application of blockchain technology greatly increases the cost of tampering with content in each stage, and each modification is recorded in the distributed system, ensuring that every change in content can be verified.
The use of NFT technology also provides possibilities for the realization of crowdsourced news. Users can NFTize the content they provide, generating a unique digital ownership certificate. Blockchain technology can faithfully record the contribution frequency, time, and proportion of contributed content for each creator, and then distribute copyright interests through smart contracts, facilitating information exchange and transactions between users and news media, and ensuring the rights of both users and news media.
04
Challenges brought by NFT technology to the news industry
1. Ambiguity of rights and public risks in the face of technological gaps
Currently, China’s laws and regulations related to blockchain and NFT digital collectibles are not yet perfect. The transaction process of digital collectibles involves the transfer of various rights relationships such as intellectual property rights and property rights. However, news media has a public nature, requiring news media to provide information to the public, maintain and serve the public interest. The exclusivity of news works obviously conflicts with this requirement.
In addition, although NFT technology provides “rights confirmation” for digital assets on the blockchain, it itself does not provide technical guarantees for the various aspects of rights determination and protection. Furthermore, blockchain technology can ensure that the transaction process is tamper-proof, but it does not have the effect of publicly transferring copyright.
Due to the requirements of news media’s social responsibility and the gaps in logic and security of blockchain technology itself, the issuance of news digital collectibles brings certain risks to the public nature of news media.
2 Impact of NFT Technology on Media Image
Until now, NFT technology and the development of digital collectibles have not formed an effective linkage with the physical economy. Purchasing digital collectibles does not provide tangible returns, conflicting with the consumption concepts of the general public. The general impression of it is still mainly “cutting leeks”. The exploration of NFT technology and digital collectibles by news media organizations is at risk of degrading the media image.
05
How Should Media Organizations Utilize NFT Technology
1 Clarify the Meaning of “Rights Confirmation Value” for News Media and Users
The biggest difference between digital collectibles under the NFT technology framework and other digital resources lies in the “rights confirmation value” attached to them. Therefore, news media organizations need to clarify the user rights attached to news digital collectibles and the boundaries of those rights.
News media organizations should explore the demand of users for news digital collectibles on the blockchain, avoid homogeneity of content, improve the content quality and uniqueness of digital collectibles, enhance user experience, and make news digital collectibles become paid news content and IP derivatives worth pursuing. At the same time, news media organizations also need to find ways in practice to empower the physical economy through digital collectibles.
Furthermore, as carriers of the public nature, news media also need to clarify whether the “rights confirmation value” of news digital collectibles for users is exclusive and exclusive, and whether the ownership or right to use news digital collectibles conflicts with the public and public welfare nature of news content, so as to avoid making news digital collectibles a tool for speculators to profit.
2 Improve the technical system and develop new NFT application scenarios under the metaverse framework
It is very important to improve the flexibility and security of NFT technology application from a technical perspective, reduce maintenance costs, and provide security guarantees and technical support for the integration of news industry and blockchain technology.
As the foundation of the metaverse, blockchain and NFT technology provide news media organizations with “passes” to build a metaverse community. The “rights confirmation” of NFT technology can be used to establish a blockchain community centered around news digital collectibles, where users can showcase their own digital collectibles in their respective blocks, forming a public blockchain “news exhibition hall” and truly “leaving digital memories for news”.
Throughout the history of human news communication, whenever a new technology emerges, it brings about a huge change in the industry, and the emergence of NFT technology is no exception. As the infrastructure of the metaverse, NFT technology has unlimited prospects.
If asked about sustainable sources of income for media organizations, NFT technology can provide us with inspiration. When analyzing NFT technology, do not forget the ethical crisis caused by addiction and privacy risks in the “coin circle” and virtual world. In short, we need to dialectically consider the development of virtual currency and rationally analyze the impact of technological changes on the news industry.
References
[1] Shi, A., & Yang, C. (2021). From NFT to the metaverse: The path and vision of reshaping the news media industry with frontier technology. Youth Journalist(21), 84-87.
[2] Zhang, S., & Jin, Y. (2022). Opportunities and risks faced by the news industry under the background of NFT technology application. Youth Journalist(15), 68-70.
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