Digital Collectibles: Exploring Non-Fungible Tokens (NFTs) Through Twitter Messages

Journal of International Technology and Information Management Manuscript 1561 Digital Collectibles: Exploring Non-Fungible Tokens (NFTs) Through Twitter Messages Peter Haried James Murray Follow this and additional works at: https://scholarworks.lib.csusb.edu/jitim Part of the Communication Technology and New Media Commons, E-Commerce Commons, Management Information Systems Commons, Social Media Commons, and the Technology and Innovation Commons Journal of International Technology and Information Management Volume 32, 2023 Digital Collectibles: Exploring Non-Fungible Tokens (NFTs) Through Twitter Peter Haried (University of Wisconsin - La Crosse) James Murray (University of Wisconsin - La Crosse) ABSTRACT The growing popularity of non-fungible tokens (NFTs) has created a new digital collectibles asset class and market. NFTs are unique digital tokens built on blockchain technology that can represent anything from art, property rights, certificates of authentication to sports collectibles. The use of blockchain provides the framework for digital ownership and brings the notion of scarcity to the digital NFT asset class. With the emerging NFT market and growing consumer base little work has investigated the factors behind NFT interest and participation. Using a dataset of 26,444 tweets on NBA Top Shot, one of the largest and most popular NFT platforms for digital sport collectibles, we use exploratory data and content analysis to generate insights from NFT Twitter messages. Our results suggest that both hedonic and utilitarian factors are driving NFT tweets and should be considered by NFT platforms to encourage participation. Our results show that consumer messages on NFTs are based on the ability to demonstrate ownership, compete against other collectors, provide personal enjoyment and for the opportunity to receive financial returns. This research is one of the first to examine the factors exploring NFT Twitter messages and our results provide early insights for practitioners and academics interested in exploring NFT digital collectibles. Keywords: Non-Fungible Token, NFT, Blockchain, Digital Collectibles ©International Information Management Association, Inc. 2021 59 ISSN: 1941-6679-On-line Copy Exploring NFTs Through Twitter Haried - Murray INTRODUCTION Non-fungible tokens (NFTs) may revolutionize the way people buy, own and sell digital goods. NFTs are a relatively new type of digital asset class, with Google Trend data showing the term NFT having virtually no interest up until January 2021. NFTs are cryptographic assets that use blockchain technology to represent unique ownership of digital goods and are viewed as an essential element of the Metaverse (Bao & Roubaude, 2002). NFTs or “crypto collectibles” include digital art, a virtual piece of land, memes, music, digital houses, augmented reality sneakers, sports trading cards or any other digital collectible that is recorded on a blockchain. NFTs are seen as the key to unlock the market for digital collectibles and NFTs have an estimated market cap of over $80 billion by 2025 (Canny, 2022). The increased momentum in NFTs comes as blockchain and cryptocurrencies gain acceptance and popularity throughout the world. Collectors and investors are spending and investing hundreds of thousands of dollars and sometimes millions of dollars on NFTs. For example, in early 2021, a digital art video clip NFT by the artist Beeple sold for $69 million (Bursztynsky, 2021). An NFT from the CryptoPunks collection sold for $2 million (Browne, 2021). In addition, $208,000 was paid for an NFT of professional basketball player LeBron James’ on the NBA Top Shot marketplace (Robinson, 2021). To some these are just JPEGs or videos with no real value, but to examples demonstrate that to some they represent an investment and/or opportunity to own a digital asset. These high dollar transactions for essentially a series of computerized zeros and ones prompts this paper’s investigation into understanding a user’s NFT interest and participation. Researchers and practitioners are in the early stages investigating NFTs as an application of blockchain technology. The potential of blockchain has been widely discussed by academic and practitioner communities, and researchers believe that NFTs have the potential to revolutionize digital property and transform the gaming, media and arts industries, yet rigorous empirical and theory driven research on blockchain remains scarce (Chong, Lim, Hua, Zheng and Tan, 2019; Kanellopoulos, Gutt, & Li, 2022; Pawelzik & Thies, 2022;). Earlier research has examined the role of NFTs to represent both digital goods such as virtual gaming assets, digital artwork and software licenses as well as physical assets such as luxury goods and cars (Griffin, 2018). NFTs as digital collectibles are designed to address the collectibles market problems of fraud, counterfeiting and the limited control over secondary transactions (Beck & Müller-Bloch, 2017). These early studies on NFTs demonstrate the opportunities presented through NFTs, but they do not develop a comprehensive model explaining NFT interest and participation. Unfortunately, in-depth investigations reviewing the design and use of NFTs is missing (Bao & Roubaud, 2022; Du, Pan Leidner, & Ying, 2018; Regner, ©International Information Management Association, Inc. 2021 . 60 ISSN: 1941-6679-On-line Copy Exploring NFTs Through Twitter Haried - Murray Schweizer, & Urbach 2019; Rossi, Müller-Bloch , Thatcher, & Beck, 2019). Given the growth in NFTs, gaps in the literature and the values being placed on NFTs it is critical that we explore NFT interest and participation. What are NFTs and How do They Work? NFTs are digital tokens that can represent anything from art to sports memorabilia that are recorded on a blockchain. Blockchain technology is a distributed ledger that is regulated through a consensus mechanism and secured with cryptography (Nakamoto, 2008). The blockchain digital ledger for the NFTs is similar to the network that is the backbone of Bitcoin and other cryptocurrencies. Transactions are securely registered on the data structure or ledger that is distributed across a network of peers that validate the entries using a consensus mechanism. New records are cryptographically linked to existing ones, rendering them virtually immutable. Blockchain technology provides the means to create, sell, authenticate and exchange NFTs. The belief is that the uniqueness, originality and proof of ownership via the blockchain makes the NFT rare and allows the owner to later sell the NFT (Haselton, 2021). Blockchain as the underlying technology provides the infrastructure to serve as a trusted third party (Auinger & Riedl, 2019; Pillai, Biswas, Hou & Muthukkumarasamy, 2022). The blockchain has the ability to promote confidence among the stakeholders in the transaction where trust may not be easily achieved and reduce uncertainties. The auditability and trans (...truncated)