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Why are Twitter and Facebook embracing NFTs

This week, thousands of Twitter users’ profile pictures turned from circular to hexagonal as the social media app began supporting NFTs, or non-fungible tokens. Photo: Pixabay

This week, thousands of Twitter users’ profile pictures turned from circular to hexagonal as the social media app began supporting NFTs, or non-fungible tokens. Photo: Pixabay

Published Jan 23, 2022

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This week, thousands of Twitter users’ profile pictures turned from circular to hexagonal as the social media app began supporting NFTs, or non-fungible tokens.

Meanwhile, Facebook and sister company Instagram are working on a feature that will let users display NFTs as part of their profiles, the ’Financial Times’ reported.

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NFTs, for those who’ve managed to avoid learning about them until now, are unique digital tokens, inscribed on a permanent digital ledger called a blockchain, that serve as proof of ownership of some digital good, such as an image. If you’ve seen a celebrity or cryptocurrency enthusiast whose social media avatar resembles a disaffected primate or a pixelated ruffian, that’s probably a copy of a work of art they’ve purchased in NFT form - probably for hundreds of thousands of dollars.

Now, those NFT-backed avatars will show up on Twitter in hexagonal form to differentiate them from ordinary profile pictures, and clicking on them will pull up a page that displays their bona fides, including their blockchain address and creator’s identity.

For Twitter, it’s also a way to sell subscriptions to its new premium service: the NFT feature is only available to users of Twitter Blue. Facebook declined to comment on its plans, but reporting suggests it has in mind a sort of trophy case where you can show off the NFTs you own to your friends and followers.

For social platforms that offer users validation in the form of likes and favourites, measure their importance by follower count, and bestow blue check marks on VIPs, encouraging crypto enthusiasts to show off their collections is just another clever way to offer users what the tech analyst and investor Eugene Wei calls “status as a service”.

Like conspicuous consumption in consumer goods, these new digital status symbols let people affirm and display their membership in identity groups and their place in social hierarchies.

In an influential 2019 essay about social media, Wei argued that people are on a deep psychological level “status-seeking monkeys” who seek opportunities to affirm and display their membership in identity groups and their place in social hierarchies. Social networks thrive or fail, in his theory, based on their ability to offer users an appealing new path to earning social capital.

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Instagram allows users to gain status based on, say, their photography skills or looks or fashion sense; Twitter, based on their pithy wit or ideological commitment; TikTok, based on their music taste and dancing skills (at least in its earlier days); and so on.

Social media isn’t the only sector that trades in status, of course. Much of his theory also applies to the worlds of fashion and art collection. In those cases, as with NFTs, there’s an added dimension of financial exclusivity, although that dimension isn’t altogether absent in social media, either: Facebook in its early days was offered exclusively to Ivy League college kids, Wei pointed out.

Though NFT art had yet to take off when Wei wrote his essay, it’s a perfect fit for the theory (which was partly inspired by a comparison between social networks and ICOs, or initial coin offerings). With no utility beyond serving as proof of the owner’s taste, wealth and ability to spot a trend before it goes mainstream, it’s perhaps the purest example yet of status as a service, as others have since pointed out. No wonder companies built around giving users ways to broadcast their identity and social status are eager to give an extremely fast-growing, wealthy and influential subculture a new way to do that.

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Wei agreed putting NFTs in social media avatars is a way for their owners to “maximise their signalling value”, he said on Friday via a message on Twitter, where his avatar is a simple Lego head.

“The profile photo has long been the closest thing to a body that we have in this current 2D, low-fi metaverse that is social media,” he said. “So it’s not surprising that people have long treated it as a critical piece of real estate to broadcast their values, beliefs, status and so on.”

But, he added, “like all signals, it isn’t just about status: Crypto has a strong emergent ideological bent, so part of it having an NFT (profile picture) can be signalling your allegiance to that cause.”

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Indeed, NFTs are part a crypto movement whose more idealistic advocates like to talk about building a new, decentralised internet - sometimes called Web3 - to replace the big corporate platforms of today. That might seem at first blush to make them an awkward fit for, well, the big corporate platforms of today. Those platforms’ quick embrace of the technology, however, suggests that they view NFTs more as an aesthetic trend to capitalise on than an existential threat to ward off.

Social media profile pictures that reflect NFT artworks aren’t new. NFT holders have been using images of their Bored Apes and Cryptopunks as avatars from the beginning, as a way of showing off their membership in an exclusive club of sorts. (The community of people who own Bored Ape NFTs is actually called “Bored Ape Yacht Club", which is apt because Bored Apes are comparable in price and ostentation to yachts, albeit less handy for traversing bodies of water.) Many also add ”. eth“ to their handles, a reference to the Ethereum blockchain on which many NFTs are recorded.

But as sceptics of the crypto craze are fond of pointing out, you don’t actually have to buy the yacht - er, the NFT - to flaunt it on Twitter. You can simply copy the image free and make that your profile picture, if you want. It’s the social media equivalent of strutting around town with a fake Goyard bag, or perhaps hanging a replica Rothko on your wall, except that a digital image of an NFT you don’t own is literally identical to a digital image of an NFT you do own.

That’s the problem, if you can call it that, that Twitter sought to address on Thursday by making support for NFT profile pictures an official feature. Now, if your Cool Cat or Pudgy Penguin avatar is “authentic”, in the sense that it’s backed by an NFT on the Ethereum blockchain, it will be noticeably different from the right-click save-as impostors.

That doesn’t mean, however, that NFTs on Facebook, Instagram and Twitter will necessarily be a resounding success. The issue is that the status NFTs confer within the crypto community has a very different basis than the status that social platforms confer. The people who have gained a following on Twitter due to their dry humour or biting political commentary are unlikely to put a lot of stock in a profile badge that says more about a user’s wealth than their wit.

Predictably, the backlash on Twitter was instant. Pranksters quickly found that some basic photoshop skills could offer a reasonable facsimile of an NFT avatar. Some of the more tech-savvy noticed that Twitter’s feature doesn’t clearly distinguish between NFTs that are part of a verified collection on a marketplace like OpenSea, which tend to be the valuable and exclusive ones, and NFTs of copies of those valuable images, which anyone can cheaply mint on a blockchain themselves. Meanwhile, influential users who view the whole idea of NFTs as a sham or scam (or an environmental travesty) encouraged others to mute, block or otherwise shun anyone they see using Twitter’s NFT feature.

That probably won’t deter those already invested in the NFT world. They’re used to being made fun of by now, and if anything the ostracism by no-coiners probably just reinforces their in-group identity. But to the extent that a hexagonal profile picture becomes a badge of shame on large swaths of a network such as Twitter, it might deter others who were crypto-curious from joining in.

It’s possible, then, that the mainstreaming of NFTs via Twitter and Facebook will end up further polarising people’s opinion of them, rather than leading to widespread acceptance. But even if that’s the case, the risk to the social networks themselves seems low. After all, divisive arguments about identity, taste and politics are just another opportunity for users of those social networks to gain status.

As one anonymous Twitter user put it in a popular thread about the NFT feature on Thursday: “Twitter hasn’t missed that a lot of users hate this. Twitter is counting on it.”

The Washington Post

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