US director Quentin Tarantino is launching an auction January 17 with his first non-fungible token (NFT) collection.

First off on the auction block are individual chapters from his Oscar-winning screenplay for the classic film Pulp Fiction.

"Each NFT in the collection consists of the original script from a single iconic scene, as well as personalized audio commentary from Quentin Tarantino himself," the website promoting the auction states.

According to the official announcement, the collector will gain "an insight into the secrets of Quentin Tarantino's mind and creative process."

But, ahead of the auction, film studio Miramax, which produced Pulp Fiction, filed a lawsuit for breach of contract. Miramax claims that they own the rights of the film and that Tarantino's project of selling NFTs of his hand-written script amounts to copyright infringement.

At the time of the release of Pulp Fiction in 1994, NFTs obviously did not exist, and their relation with existing copyright law is still ambiguous.

What are NFTs?

What Tarantino offers as an exclusive package is also available in a smaller version, because NFTs are nothing more than digital works. They can be anything from images, photographs, works of art, videos and animations to texts, tweets, source codes and music in digital form. What is special about them is that they are "non-fungible," that is, not interchangeable. This means that anyone who buys an NFT owns the original.

Turning a digital file into something unique — even though it may be widely available on the Internet, downloaded and copied to one's own hard drive — only became possible through NFTs.

The special technology behind NFTs is known as the blockchain. The information about a picture is stored in a block. If new information is added — for example, if a collector buys a picture — a new block is created and linked to the previous one. This creates a chain, namely, the blockchain. It collects all the information so that it is always possible to trace who created a picture, who bought it and at what price, and to whom it was resold.

As a rule, NFTs are sold or auctioned off via online marketplaces, but digital art now also goes under the hammer at renowned auction houses, such as Christie's.

The creation of a block for an NFT involves a series of highly complex computational tasks, and the costs to cover them are known as the "gas fee." Publishing NFTs therefore involves an important initial investment, without knowing in advance whether they will even find interested buyers.

Cashing in on the NFT market

Nevertheless, numerous companies are now offering NFTs. The prospect of big profits is too tempting. In addition, authors can also receive a percentage of each resale of a work.

Game companies such as Ubisoft offer digital weapons or outfits for their games, while apparel companies such as Nike are selling digital sneakers.

The AP news agency plans to auction off award-winning photographs as NFTs starting late January. DW has also offered an NFT in a self-experiment and donated the profits to Reporters Without Borders.

Many celebrities are also trying their luck with NFTs — both as buyers and creators. One of them is actress Mila Kunis, who is producing the animated series "Stoner Cats" with her company, which in turn is to be financed via NFTs.

High gas fees are not an issue for celebrity NFT creators who already enjoy a large fan base and numerous followers on social media. News of their unique NFT collections will quickly make the rounds.

"NFTs are the future for creators, creatives and collectors, and this is just the beginning," Paris Hilton told Bloomberg News in November 2021. The hotel heiress has been promoting NFTs for a long time.

Not climate-friendly

One cannot yet tell whether NFTs will remain a short-term phenomenon or establish themselves as a stable store of value on the market.

Currently, they are mainly speculative items. They are usually paid for with cryptocurrencies, and their prices are subject to strong fluctuations.

In addition, the technology is very bad for the climate, as it requires colossal amounts of computing power and thus has a high energy consumption.

Making arts accessible

Proponents of NFTs emphasize that they open up the art market to newcomers.

Through online marketplaces, everyone has access to artworks, and every artist, photographer and developer can offer their own works there.

The technology makes institutions such as galleries superfluous because buyers can contact the creators directly via so-called smart contracts and conclude their business. 

Despite the current hype around NFTs, for now very few people are making a lot of money with them.

Even celebrities don't automatically have their works snapped up, as Rammstein frontman Till Lindemann experienced firsthand. To this day, he sits on a mountain of NFTs that even loyal Rammstein fans don't want to spend money on.

Whether Quentin Tarantino will experience a similar fate remains to be seen.

This article was translated from German.