There are 14 letters at the beginning of the cell phone age: "Merry Christmas" was written on a Vodafone employee's cell phone on December 3, 1992. He had received the world's first text message - the starting signal for a different kind of communication. What was an innovation back then is now a piece of technological history. And it went under the hammer on December 20, 2021: French auction house Aguttes auctioned off the text message as a non-fungible token (NFT). The auction proceeds amounted to 107,000 euros.

NFTs are digital codes that refer to tangible objects or virtual goods. It is not about the rights to photos or videos that can be seen: These are subject to copyrights and are not part of a non-fungible token. Instead, an NFT is a digital image that is based on blockchain technology and is therefore tamper-proof. Thanks to this data chain, you are proven to be the sole owner of this code. Depending on what the NFT refers to in the real world, the greater its significance.

Known NFTs

Certificates of authenticity are in vogue. This spring, for example, the first tweet from Twitter founder Jack Dorsey was auctioned off as an NFT for 2.9 million dollars (2.5 million euros). In the summer, the first source code for the World Wide Web (WWW) by Tim Berners-Lee was sold as an NFT for 5.4 million dollars.

Now it was the turn of the SMS. Auction house Aguttes estimated that this digital code would fetch between 100,000 and 200,000 euros. An unnamed buyer bought it for 107,000 euros on Tuesday. He not only got the code, but also items such as a digital picture frame to make the text messages visible.

The auction house's head of development, Maximilien Aguttes, promoted the SMS NFT as a testimony to a momentous moment: the text message changed the way we communicate forever. "This first text message from 1992 is a historic testimony to human and technological progress." The SMS-NFT was sold by Vodafone, which intends to donate the proceeds to the United Nations Refugee Agency.

NFT market is growing

The market for NFTs is growing rapidly. According to a study by the industry platform "nonfungible.com", NFTs worth a total of 5.9 billion dollars were sold in the US alone in the third quarter. This was almost eight times as much as in the second quarter (0.8 billion dollars). The number of people buying at least one NFT per quarter in the US roughly tripled during this period - meaning that, on average, an NFT buyer spent significantly more money than before. Other analyses - from Chainalysis, for example - also see a strong trend on a global level.

On websites such as rarible.com, everyday artists and other internet-savvy people are offering the digital images, and traditional auction houses such as Christie's and Sothebys are also getting involved. But it's not just about auctions of NFTs for works of art, collector's items or curiosities. NFTs also play a role in the gaming scene, for example when swords and shields in role-playing games are provided with this digital reference, making them unique - the player then knows that they are always using the same video game weapon and not just any weapon of the same type.

Blockchain expert Toni Caradonna sees NFTs as part of a new wave of digitalization. In the first wave in the 90s, emails changed communication and in the wave after that, social media created new communities. "Now it's about the digitalization of values and property," says Caradonna, who sits on the board of Swiss Blockchain Trust Solutions AG. "We have lost digital control over property due to the copypasting of the past decades." This is now being regained with non-fungible tokens. "With NFTs, I can prove that something only belongs to me - I have control."

Unique pieces in the digital world

However, an NFT still only refers to the digital world. Take the first tweet, for example: Although Jack Dorsey auctioned it off, it can still be read on his Twitter page: "just setting up my twttr" from March 21, 2006. The NFT is a reference to a real object, explains Caradonna. "It's not about the ownership of the object that the NFT points to, but about the NFT itself: a unique digital object that cannot be copied."

Philipp Sandner from the Frankfurt School of Finance & Management attaches "a very high sentimental value" to NFTs. Sports fans are also well addressed. The US basketball association NBA, for example, sells individual minutes of games as NFTs. "If a player makes a dunk in that one minute, I can proudly say that the NFT for that minute is all mine." The actual video of the minute in question has nothing to do with this, as it is subject to copyright rules.

Digital equivalent of Panini trading cards?

And what's next for NFTs? Professor Sandner speaks of a current hype phase with a very speculative character. He refers to other hype before the internet age: collectors once paid a lot of money for stamps or Panini soccer pictures, but the passion for collecting then died down and nowadays the stamps and pictures lie around unnoticed in cupboards. Demand for NFTs will also decline at some point. In contrast to yellowed paper collectibles, however, a certain interest in NFTs will remain in the future - "there will be fluctuations, but they are here to stay".

When the world's first text message was auctioned off in Neuilly-sur-Seine near Paris on Tuesday, one of its initiators was 5,500 km away: programmer Neil Papworth, who sent the short message in question from a computer in England to a Vodafone colleague's cell phone in 1992, now lives in Montreal. What does the 51-year-old think of the fact that the text message now has a digital image? "NFTs aren't really my thing, I've never bought or sold one," he tells the German Press Agency. "But if people want to buy something like this - why not?" The fact that the auction raises money for a good cause and makes the buyer happy is a good thing.