The South China Morning Post (SCMP) wants to turn its historic articles, pictures and other items into digital assets that cannot be tampered with and can also be owned by anyone.
Using blockchain technology, the publisher will create non-fungible tokens (NFTs) from its archives. These assets can then be collected, showcased or traded by the public and institutions.
What is an NFT?
By now, you have probably heard about digital assets like artworks, videos or gifs selling for millions of pounds. And it is not just about digital art - Twitter founder Jack Dorsey sold his first ever tweet as an NFT for more than £2 million.
An NFT is a digital creation - think a viral video or a meme - that does not exist in a physical form. They are bought and sold online and are created - or minted - with the same technology as many cryptocurrencies, like bitcoin.
The most important thing about an NFT is that they are unique or, at least, they are created in a very limited number. In a world where a meme can be copied and shared a gazillion times, this creates scarcity that NFTs collectors are ready to pay for.
The blockchain technology used to create these assets serves as a public ledger and allows anyone to check the NFT’s origin and ownership. If you translate that to a physical world, you could take a photo of the Mona Lisa or buy a print, but you would not own the original artwork, which will remain hanging in Louvre. In the world of NFTs, you can buy the original digital creation off the author and become its sole owner, instead of just having a screenshot of it.
Are you wondering why would anyone bother? You are not alone - cynics call that "digital bragging rights."
An example of an ARTIFACT: SCMP A1 cover on 1 July 1997, the day of the handover of Hong Kong. The South China Morning Post covered this historical transition of the city in the Hong Kong Convention and Exhibition Centre. Courtesy SCMP
What have publishers got to do with NFTs?
The most important part about digital assets created with blockchain technology is that they cannot be modified. Every stage of their digital lives is recorded in their metadata - from author to the owner, to any transaction or update. As such, an incriminating photo of a politician cannot be photoshopped or taken down. Once the digital asset is created, it is immutable.
The second most important aspect is that blockchain technology is decentralised. This means that instead of living on one website, say, on www.journalism.co.uk, an image or an article is distributed across thousands of computers worldwide which makes it impossible for one person to modify or delete it. This is particularly important for journalists who face pressures to remove contentious information from their websites or blogs. If an article, an image or a video is published using blockchain technology, it will exist forever.
For the past four years, the SCMP has been exploring how blockchain technology can change journalism.
"There were several false starts and we are lucky we didn’t pursue any of that," says SCMP CEO Gary Liu.
But with the rise of NFTs in 2021, the publisher saw an opportunity to create a new value for its archived content that documents the most important events for more than a century. It is not alone, as this year CNN also made 'moments from its history' available for purchase via NFTs, but not before Quartz sold its first-ever NFT article for $1800.
The project is called ARTIFACT and it will see items like important historic images or front pages re-created digitally using blockchain technology. These NFTs can then be collected or traded by the members of the public or institutions, in a similar way a physical original photograph or a front page could be sold in an auction. One practical use of these digital collections could be exhibiting them in virtual museums that could be accessed from anywhere in the world and you could be sure you are looking at the original, authentic asset.
For Liu, ARTIFACT represents an opportunity to open up the 'first draft of history' to public ownership.
But here is the catch - because NFTs are immutable, it could be very tempting to use blockchain technology to rewrite history. After all, what if a revolution never happened? Or a war criminal could be forever turned into a war hero?
To guarantee the accuracy of the assets, there will be some gatekeeping to make sure that what the public can access is true. Which leads us to another challenge - what to do with historical assets that are authentic but contain untrue information, like a propaganda pamphlet?
"The value of an ARTIFACT is in the information it contains," says Liu, adding that the team is currently exploring how to add context about a historical significance of an asset but also its meaning into its metadata, which is the backend information that comes with any digital asset. Practically that would mean that you could look at this propaganda pamphlet, then have an explainer on the side that will tell you what this asset is, just like in a gallery.
An example of an ARTIFACT: a Linotype printing machine that still sits in one of SCMP’s offices.
SCMP was the sole agent in Asia to carry this machine, and the same model was used by SCMP when it was first established in 1903 until it was replaced in 1971. Courtesy SCMP
Questions around governance
Experts from different fields, from blockchain to history, to art and the media, are currently pondering the best way to deal with these challenges. But once you start to record the history, the inevitable question is: who decides which stories will be recorded, and which will not? And how are these decisions made?
Liu admits that a lot of questions around governance do not have an answer yet and the publisher is working with its community on the answers. The rules around ARTIFACTs may ultimately be a result of public consensus.
For now, SCMP is thinking about creating a council to govern the authentication process and decisions about institutions that are allowed to use these assets.
"I expect that council to be very picky," adds Liu.
The long-term goal is to put all the 118 years of SCMP’s archives on blockchain. Deciding what to mint and what to release will be done inside the company.
All this costs money though. Between staff costs, technology purchase and even energy bills, the final sum will be hefty.
Although Liu was not ready to estimate the final figure yet, he said that the company is looking to monetise some NFTs and inject the revenue back to the project to see it grow.
Just like with physical art, there are two types of revenue with NFTs: primary transactions like auctions and sales, and secondary revenue like royalties. The primary issuer - whose ID is locked in the blockchain - will receive revenue perpetually.
"The beauty of NFTs is that they are tradable," says Liu. And with the issuer defining scarcity, institutions need to think carefully about how these two are linked.
Because blockchain technology is decentralised, the millions of computers that underpin it eat up a lot of energy. The bitcoin industry alone is estimated to have the carbon footprint the same as that of London.
As the number of ARTIFACTs will grow, so will their energy footprint.
"We are conscious of the impact and are looking at newer technologies that are less environmental unfriendly," say Liu. However, there are no plans in place yet to offset the carbon footprint since it is not yet known.
Liu’s goal is to release the first NFT by the end of the year but there are still many steps to take. One thing is sure - the community of NFT enthusiasts is growing and it is an opportunity for the media organisations to experiment with new technologies and set their own rules.
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