Andy Robertson, NFTs and going for broke in the world of cryptocurrency

This is not the social media response Scotland captain and Liverpool star Andy Robertson is accustomed to. The footballer, lauded for his relentless workrate on the pitch and charitable endeavours off it, was on the receiving end of a Twitter backlash last week after announcing a new business venture.

The 27-year-old, or at least the people who run his Twitter account, announced that he was joining the rapidly expanding ranks of celebrities flogging NFTs (non-fungible tokens). The tweet excitedly told fans about his “Hometown Heroes” NFT collection, which is available for purchase via Sportemon Go – an “NFT-augmented reality sports trading platform”.

Oh Andy. Sort yourself out mate. Better than this

— Tom Beattie (@ThomasRBeattie) January 31, 2022

A link in the tweet takes you to a Union-flag branded page on the platform which explains Robertson’s collection is part of the “GB Heroes Collection”. Below, users are encouraged to buy his NFTs – rotating digital images of the Scot holding a football illuminated in fiery red colours.

Everyone from Paris Hilton to Eminem have been hawking similarly inane digital images to their social media followers. Rangers FC have also launched their own collection, selling digital Premiership winners’ medals for the equivalent of around £23. NFT was even named as the Collins Dictionary “word of the year” for 2021.

Although there is no suggestion of wrongdoing on behalf of anyone promoting these offers, the reaction to Robertson’s tweet hints at an uneasiness over the new trend – from environmental concerns to warnings that unregulated crypto ventures could potentially expose punters to fraud and financial ruin.

But what exactly is an NFT? How concerned should we be about them? And how are they changing the way ordinary people interact with the global elite?

An NFT is a non-interchangeable unit of data which is often associated with images, videos or audio. NFTs are an application of the same blockchain technology which is used for cryptocurrency, such as Bitcoin.

Using the example of digital pictures being marketed by celebrities on Twitter, Dan Brooks of Gawker writes: “The seller of the NFT’ed image generates a token corresponding to it that only one person can own at any time – the same way only one person can own a given Bitcoin, ie symbolically but also reliably due to its documentation on a transaction record (the blockchain) that is not kept on a single server but rather distributed across all peers participating in the blockchain protocol.”

Professor Aggelos Kiayias, director of the Blockchain Technology Laboratory at the University of Edinburgh, put it even more simply. He told The National: “An NFT is a unique digital object that can be exchanged between people over the internet. The object can be also tied by way of some convention to a physical object.”

What this groundbreaking technology does not do, however, is stop anyone from simply copying and pasting your image and sharing it wherever they please, no matter how much you’ve paid for it – which in some extreme cases is rather a lot. Twitter founder Jack Dorsey auctioned the NFT for his first-ever tweet – “just setting up my twttr” – for more then $2.9 million. Digital artist Beeple (Michael Joseph Winkelmann) sold his collage Everydays: The First 5000 Days for more than $69m.

What the blockchain system does create is “ provable scarcity” and unerasable proof that you paid for the NFT. Provided someone wants to buy it, you can then sell your NFT, ideally for a profit.

This premise, and some of the eye-watering prices, may well be what has helped encourage legions of celebrities to sign deals with NFT firms. From former England football captain to John Terry to US talk show host Jimmy Fallon, it seems everyone is getting in on the act.

Aside from making wealthy people even wealthier, NFTs have other potential uses.

“They can offer new ways of monetising art – digital or not – and funding various causes,” Kiayias explained. “They can also facilitate markets of digital goods in virtual reality and augmented reality platforms, such as the Metaverse [a virtual world promoted by Facebook which allows users to socialise, work, and play games].”

The technology could even help companies overcome crippling supply chain issues, the professor said.

Yet for most people who have encountered NFTs, it has been through the often bewildering sight of celebrities flogging garish images on social media – images which anyone can copy and use as they please. The craze has typically provoked confusion, ridicule and even a sense of despair. Brooks writes that NFTs seem to him to be overwhelmingly “dumb”, explaining: “…dumb in the sense of deadening and inert at best, and at worst actively annoying, like the world’s most advanced synthesizer with a hamster running across the keys.”

As well as a dead-eyed weariness, NFTs are also linked to concerns about the impact of blockchain systems on the planet. The technology on which cryptocurrencies and NFTs are built requires a network of electricity-consuming computers to function. According to research carried at Cambridge University in May, the Bitcoin network alone was consuming more electricity annually than the whole of Argentina or the Netherlands.

Kiayias said Bitcoin and Ethereum, the two most popular cyrpto systems, require “vast” amounts of energy, adding that “using NFTs in these platforms is associated with a significant energy expenditure”. He pointed out, however, that alternative systems such as Cardano and Tezos “offer NFT functionality without a significant energy footprint”.

People who buy NFTs can be split into two camps, according to Christian Chalfoun of cryptocurrency firm ColossalBit. He told euronews that there are “flippers”, people who want to buy and sell their NFT for a profit, and collectors, people who want to join a community.

Unless you’re John Terry or Eminem (below), you’re unlikely to have enough cash to burn to be in the latter camp. But what if the tantalising prospect of wheeling and dealing NFTs, promoted by headline-making mega sales and social media hype, turned out to be a dangerous game which could end in financial losses for those that can least afford them?

The UK’s Financial Conduct Authority certainly has its doubts, sparking demands for the unregulated world of cryptocurrency to come under the purview of the law. As it stands, there is no regulatory framework for digital tokens, including NFTs, to protect consumers. There is also no guarantee that NFTs can be converted back into cash. The FCA stated in November that it has “continually warned of the risks of investing in cryptoassets”.

“If people invest in these types of products, they should be prepared to lose all their money and they are unlikely to have access to any redress or compensation schemes,” the FCA said.

The Advertising Standards Authority (ASA), the UK’s advertising regulator, warned in December that “cryptoassets are a red-alert priority issue”.

Kiayias said the technology itself, aisde from environmental concerns, is not the issue. “What we need to worry about is unscrupulous people that use NFTs to defraud people by extracting large amounts of money in exchange for worthless digital objects while making promises of significant future profits that are unfounded,” he said.

It is little wonder then that sceptics are urging members of the public to think twice before spending potentially hundreds or even thousands of pounds on pictures of cartoon monkeys or their favourite sports stars.

In a world where trust in traditional institutions has been eroded and inequality never starker, the prospect of cryptoinvesting may seem appealing as the latest get rich quick scheme. Indeed, 2.3 million people in the UK alone are now believed to own a cyptoasset, yet the Government has pointed to research which suggests understanding of what crypto actually is is declining.

READ MORE: NFT: The latest digital investment boom explained

Broadcaster and journalist Ken Early, alarmed by the recent spate of footballers buying and selling NFTs, warned last week in the Irish Times: “When every scandal reinforces a pervasive sense that the game is rigged, what could be riskier than patient hard work and playing by the rules? At least in the kaleidoscopic snakes and ladders game of cryptoinvesting, there’s the slim chance you might actually win. But you probably won’t, and in the coming times a lot of money is going to be lost by a lot of people who can’t afford it and who are going to be angry about it.”

Environmental, financial and moral concerns about NFTs have not gone unnoticed by the public, as evidenced in the angry reaction to Robertson’s Twitter post. The UK Government, too, has committed to taking action. The Treasury announced last month it is planning a crackdown on the crypto sector. Ministers say they will ban misleading cryptoasset promotions, make firms comply with advertising standards and provide consumer protections.

Until the UK Government gets a grip on it, celebrities on Twitter should expect angry comments when they try to flog their NFTs.