Why Selling and Buying Historical Digital Artifacts as NFTs Is a Bad Idea

On March 22, Twitter CEO and co-founder Jack Dorsey sold the first tweet for $2.9 million. The sale brought attention to the growing phenomenon of non-fungible tokens (NFTs). Simply defined, an NFT is a digital item with a unique blockchain-enabled proof of provenance. You can find a more thorough and fun definition of NFTs in this story from The Verge.

NFTs are most commonly used as a means to sell “original” versions of digital art, but as Dorsey’s tweet sale shows, they can also be used to sell historical digital artifacts. Creators of program code, game artwork, early graphics or sound files, or even online forum conversations can place them an NFT platform and offer them for sale.

But should they? And if they do, should you buy an NFT as an historical artifact?

I say no to both. Here’s why:

NFTs aren’t really the original item

This is likely to be debated, but to me the original version of a digital artifact resides on the medium where it was created. If Bill Gates still has the original Altair BASIC lying around, he could theoretically sell it as an NFT. All that NFT is, though, is a copy of the original with a blockchain confirmation that it came from Gates. It’s the only version with that kind of digital provenance (maybe, I’ll get to that later), but it’s not the original. Dorsey’s tweet, for example, is still viewable on Twitter. If you buy an NFT, what you get is essentially a receipt that it came from the creator, not that it was the first version.

There are other ways to prove provenance

Hobbyists, collectors, and historians have many ways to document the authenticity of a digital artifact. The computer industry and internet are young enough that many of the people who created these artifacts are still alive. A rich record of print and photographic evidence exists as well.

NFTs are exactly the same as any other digital copy

With digital artifacts, the medium on which they are found are a big part of their stories. Which would you rather have: the original paper tape version of Altair BASIC or its NFT? The choice is obvious. Again, the only difference between an NFT and the digital item itself is the blockchain receipt.

NFTs appeal to speculators

Was Dorsey’s tweet really worth $2.9 million? Absolutely not. The money went to charity, which always inflates auction prices. The winning bidder said he wanted to “emphasize the importance of NFTs on [the] future of crypto and tech sphere.” By crypto he means the highly volatile cryptocurrency markets. Some NFT platforms are run by cryptocurrency exchanges like Ethereum. NFTs are also believed to be involved in money laundering.

The association with cryptocurrencies makes the NFT market unpredictable. Digital art is bought and sold on NFT platforms for digital art using cryptocurrencies. Let’s say you bought that Altair BASIC NFT for a cool $1 million. A relatively small downward trend in cryptocurrency values could have a disproportionate effect on the value of your investment. On the other hand, a wild upward swing might mean early retirement, if you act fast. NFT markets are not for hobbyists or collectors; they are for speculators looking for trophies and maybe a big payoff later.

You might not really own the NFT

Owning an item usually means you can do whatever you want with it. Not so with NFTs. Buying an NFT is really just buying its token, not the digital artifact. That token might comes with certain rights such as copyright. In some cases, there is nothing preventing the seller from creating another NFT on the same or very similar item.

Blockchain is hackable

Blockchain has a reputation of being bulletproof, but it is hackable and expensive NFTs make an attractive target for cybercriminals.

“Ricketts” Apple 1 Sells Below Expectations at Christie’s Auction

With auction prices for genuine Apple 1 systems rising steadily over the last few years, there was a lot of speculation about whether the one sold today would break the $1 million mark. It didn’t. In fact, the sale fell below the low range of auction house Christie’s estimate at $365,000, including buyer’s premium. Christie’s estimated it would sell between $400,000 and $600,000.

Why another Apple 1 sold for $905,000 in October and this one for a little more than a third that number is a little puzzling. The example sold today is referred to as the Ricketts Apple 1. It was purchased new by Charles Ricketts from Steve Jobs, and the canceled check and other documents establishing provenance were included in the sale. It is the only Apple 1 documented to have been purchased directly from Steve Jobs.

Both the system sold in October and the Ricketts Apple 1 are fully operational. With the special provenance of the Ricketts Apple 1, you might expect a premium. As I said in an earlier post, the market for Apple 1 computers might be reaching a saturation point where most of the wealthy collectors and institutions that want one have acquired one.

Also part of today’s auction was the personal archive of Apple co-founder Ronald Wayne. The archive includes an original proof copy of the Apple 1 operation manual and early drawings and blueprints for the Apple II case, It sold for $25,000 including buyer’s premium. This lot also sold below the low end of Christie’s estimate of $30,000.

Update: Breker Auction Results

If the results from the November 14 and 15 Breker Science & Technology auction tell us anything, it’s that recent high selling prices for examples of the Apple 1 computer aren’t necessarily raising those of other iconic early computers. Of the 10 offered, only three sold: an Apple Twentieth Anniversary Macintosh (TAM) for €1,000 ($1,245 USD), an Apple II for €1,800 ($2,241 USD), and a Heathkit H8 for €600 ($747 USD).

The Apple TAM and H8 bids were within the range of recent selling prices for comparable systems, while the Apple II–in above-average working condition–was at the high end of the range.

Systems not even drawing an opening bid included the Processor Technology Sol-20, an Altair 8800, an Apple Lisa 2/5, and an original Apple Lisa. Opening bids for all were within the range of recent selling prices for each system.

SOL-20, Apple Lisa 1, MITS Altair 8800 Among Items to Be Auctioned on Nov. 15

Day 2 of Breker’s Science & Technology auction features a number of iconic vintage microcomputers. The auction is being held online now through LiveAuctioneers, but Breker and the computers are located in Europe. If you bid from outside Europe, plan on paying significant shipping fees on top of the buyer premium. The list includes:

Heathkit H8: A working unit with a pre-auction estimate of €600 ($760 USD).

Commodore PET 2001: An early production model in working condition with a pre-auction estimate of € 500 ($633 USD).

Processor Technology SOL-20: Described as complete and working but not completely tested, and with some cosmetic issues. The pre-auction estimate of € 800 ($1014 USD) might be a little optimistic. Better units have sold for less recently.

NeXT Cube: This appears to be in very good condition functionally and cosmetically with a pre-auction estimate of € 1200 ($1,520 USD).

MITS Altair 8800: Described as in good working order, this unit has only the CPU board and a memory board with 256K of RAM. The pre-auction estimate of € 1800 ($2,280 USD) might be more realistic if this example had more boards.

Apple Lisa 1: This appears to be a very complete and working example with the Twiggy drives and a Profile hard drive. The pre-auction estimate of € 12,000 ($15,203 USD) is probably achievable given this week’s record Apple 1 sale.

The auction also has many earlier mechanical calculating devices. Even if you don’t bid, it should be fun to follow.

Update: Apple 1 Auction

The buyer who paid $905,000 (including buyer’s premium) for the Apple 1 on October 22 was The Henry Ford Museum in Dearborn, MI. This is good news, because the Apple 1 will go on public display as part of the museum’s Archive of American Innovation. The previous Apple 1 that was sold went to a private collector in Asia, so who knows when that one will resurface again.

“When acquiring artifacts for The Henry Ford’s Archive of American Innovation, we look at how the items will expand our ability to tell the important stories of American culture and its greatest innovators,” said Patricia Mooradian, president of The Henry Ford in a press release. “Similar to what Henry Ford did with the Model T, Steve Wozniak and Steve Jobs put technology directly in the hands of the people with the creation of the Apple-1, completely altering the way we work and live. The Apple-1 was not only innovative, but it is a key artifact in the foundation of the digital revolution.”

Record Apple 1 Price Set at Bonhams Auction

Well, my prediction that the Apple 1 in today’s Bonhams auction would sell near the low estimate was wrong. It sold for $905,000 including buyer’s premium. This beats the $671,000 sale of an Apple 1 at a German auction in May 2013 by roughly 26%. High-end collectibles is a funny business, sometimes driven by serious collectors competing for rare items, and sometimes driven by not-so-serious collectors looking for an investment. I’m guessing today’s Apple 1 sale is the result of both.

You see this in the collector car market. In fact, it’s gotten to the point where analysts actually track investment-grade collector cars to tell investors which models to buy, sell, or hold–much like they do stocks. I suppose this is inevitable with rare and desirable computers like the Apple 1,

Other notes from the auction: The wood and brass Helmholtz Sound Synthesizer from 1905 sold for $20,000. No results have been posted for the Olivetti P-602 or the Manhattan Project viewing window. I assume this means that bidding on these items did not meet the reserve price and they did not sell.

Apple 1 Might Not Be the Most Interesting Item at Bonham’s History of Science Auction

Auction house Bonhams has assembled an impressive collection of historically significant items related to science and technology for its October 22 History of Science auction in New York City. One of the highlights is a rather complete and working Apple 1 setup that includes the motherboard, keyboard, monitor, and power supply. With a pre-auction estimate of $300K to $500K, the Apple 1 is getting much of the attention for this auction, but it is just one of many important items to go on the block.

If the atomic era interests you, consider the 1,500-pound, 6-inch thick viewing window used in the Manhattan Project. This heavily leaded piece of glass protected staff from radiation when they viewed the plutonium production process. (Bonhams assures everyone that the window is itself not radioactive.) It comes with its own wooden rolling cart, which you will probably need considering its weight. The pre-auction sale estimate is $150K to $250K.

Also being offered is what is likely the world’s oldest sound synthesizer. The Helmholtz Sound Synthesizer was built by Max Kohl around 1905 using a design by Hermann von Helmholtz from the 19th Century. This is roughly 60 years before the Moog synthesizer. The Helmholtz design features a lot of brass metalwork–mostly in its resonators–and tuning forks mounted on a wooden platform. It also has a 10-key electric keyboard. The pre-sale estimate is $20K to $30K.

The only computer other than the Apple 1 in the auction is an Olivetti P-602 from 1971. More of a calculator designed to solve scientific, statistical, or technical math problems, the P-602 followed Olivetti’s better-known Programma 101. This unit appears in good cosmetic condition with one small crack in the back. It is unclear from the description if the unit is working. Pre-sale estimate is $2,000 to $3,000.

As for the Apple 1, I’m going to make a prediction that bidding will be closer to the low end of the estimate, perhaps not reaching it. In the last few years, several examples have sold, and while this one appears to be an above-average example, there are only so many collectors left with the desire to own one and the means to make it happen.

DEC PDP-8 “Straight 8” May or May Not Have Sold for 5-Figure Sum

The seller of a DEC PDP-8 on eBay recently updated the description to say that he has accepted an offer near his asking price of $18,000, pending receipt of funds. The “straight 8” is perhaps the most sought-after DEC model among collectors, and very few (if any) have been publicly sold. Assuming the accepted offer is somewhere between $15,000 and $17,000 (and that this is not a ploy on the seller’s part), I believe this would be a record price for a PDP-8 if the sale goes through. Does anyone know otherwise?

Microchip Prototype Up for Auction: Has Monumental Historical Significance

It’s hard to imagine a more significant artifact of the computer age than the prototype of the first microchip that’s up for auction on June 19. Got an extra $1 million to $2 million lying around? That’s auction house Christie’s estimate of what the chip will sell for.

The germanium-based prototype was made by Tom Yeargan at Texas Instruments for its inventor Jack Kilby. Included with the original prototype is another silicon-based prototype from 1964, also made by Yeargan in 1958. The sale comes with documentation from Yeargan on its authenticity. And by the way, the sale of the prototypes overshadows the Apple I computer that’s also listed for the auction with an estimate of $80,000 to $120,000.

It would be a shame for these items to end up in a private collection, but that’s probably what will happen. Very few science or computer museums have the resources for a purchase this large, unless Paul Allen ponies up for his Living Computer Museum. Historically speaking, the Yeargan/Kilby prototype is like any other invention that rocked the world: Fulton’s steam engine, Bell’s telephone, the first Benz gasoline automobile, or the Wright brothers’ airplane. These prototypes need to be where the public can see them.

 

 

Auction Result Show Strong Interest in Early Office Technology

Auction Team Breker’s online auction of Office Antiques, Science & Technology, Fine Toys, and Automata that concluded on May 24 featured some rarely seen office technology from the 19th and 20th century. It also offered several iconic microcomputers including an Apple Lisa and a MITS Altair 8800. The results show that interest in early technology, not to mention the computers, is strong.

I’ve always been fascinated by early office technology, and this auction featured a wide variety of items from mechanical calculators to cipher machines to typewriters. Results for some of the more interesting items follow. Breker is a European auction house, so I’ve converted the original sale prices from euros to dollars. You can see the full results for yourself at LiveAuction, but you will need to register and log in to see the final prices.

Swiss “Conto” Model C Calculating Machine, $1,090: This brass and leather device is an 11-digit adding machine from 1912.

Mercedes-Euklid Model 1, $477: Built in 1905, this calculating machine from Germany has lots of levers and buttons. The manufacturer has no relation to the maker of Mercedes cars.

Loga Calculator, $218: About 30,000 of these cylindrical slide rules were made by the Swiss manufacturer Heinrich Daemon-Schmid between 1900 and 1935. The Smithsonian has one in its collection.

Addo Calculator Poster, $1,226: Old tech ephemera has value to collectors if the subject matter and visuals are good. Still, the selling price of this poster surprised me. I’m guessing there was some crossover interest here from poster collectors.

Arithmomètre de Thomas de Colmar (case only), $12,258: Yes, the winning bidder paid more than $12K just for the case of the world’s first calculating machine produced in series around 1850. When you consider that the actual calculator sold for more than $318K at auction last year, this could be a bargain.

Casio AL-1000 Nixie Tube Calculator, $409: This early programmable calculator from 1967 appears to be in working condition.

Nema T-D Cipher Machine, $3,816: According to Breker, this is a successor the the German WWII enigma machines and was built for the Swiss army. Only 640 were made, and this one is described as in mint condition.

Hagelin-Crypto CD-57 Cipher Machine, $3,816: The Swiss must have had a thing for cipher machines. This example is a “pocket cryptographer” built in 1957.

MITS Altair 8800, $3,952: Although described as in good working order, the auction description says it has the MITS CPU board and 4K RAM. If those really are the only boards in the system, then the price seems on the high side.

Apple Lisa 2/5, $3,543: This working example includes the Apple Profile external hard drive and the Lisa Office System disk set. A Lisa 1 was also part of the auction, but did not sell. Breker had estimated its selling price at between $25,000 and $34,000.

NeXT Cube, $3,543: Another system in good working order, and its selling price suggests that these first-generation NeXT systems are becoming more in demand.

Discret, $8,995: This odd device from 1899 is described as a “world typewriter.” It appears to be some kind of cipher writing machine.