The Internet of Grift
NFTs are an even more insidious form of grift than regular crypto products.
TikTok is getting into NFTs. Twitter is thinking about it too. NFTs - non-fungible tokens are somehow back in the spotlight after dipping out once the NBA Topshots market dropped. If you don’t know what they are, please stop reading this post. I don’t want you to know, but if you really must know, they are a blockchain-based token of ownership that cannot be changed and is “one of a kind.” They sit on a blockchain, and at times direct, using a link, to a particular piece of art.
Okay, well, they direct to a link to a piece of art.
Okay, well, they direct to a link to something, which may be a piece of art, but also if that link breaks, they direct to nothing, a problem that The Verge has written about before:
But there’s one significant gap in the system ensuring that an NFT is held together: NFTs use links to direct you to somewhere else where the art and any details about it are being stored. And as anyone who has browsed the internet before should know, links can and do die. So what happens if your NFT breaks down and points to nothing?
NFTs are being hailed as “important” now because there are many people making them, and there is lots of money swilling around inside them. The Times, of course, did a needless deep dive into one particular kind, something to do with Penguins, flirting with the idea that there is some connection between digital identity and the ownership of a “unique” digital asset. There’s the comparison to owning a Rolex or Supreme clothes, and then there’s a bunch of stuff about how these things “can’t be faked.”
Unless you screenshot them, then they can be. I mean, the people in the club of people who bought these things would know, but who else would? And more importantly, who cares?
One crucial nugget stuck out to me from the writer’s piece, however:
The co-founders of Pudgy Penguins earn a royalty every time a penguin is sold, but other owners stand to profit only if they can resell their penguins for more than they paid.
There’s the catch - there is always a way in which the rich will get richer, and those who get in after them will always be at a disadvantage that, somehow, enriches those who are already rich. The moment that something has bubbled up to the surface long enough for it to establish real value is the exact moment at which those engineering the system for their profit are planning to exit or have already left. All of the flashy press has likely died down due to the market cap crashing from $1.1 billion to today’s cap of $726 million and $1 million in volume - with a few days this week below $350,000. For context, the top cryptocurrencies have daily volume in the billions or hundreds of millions of dollars. Now the market is flooded with cheaper cards that people can’t recoup value from, with no real market to sell them into. But the guys who got in early got rich, as they always do.
Perhaps Top Shots is a lousy example, simply because it lacks the quasi-identity politics of the Bored Apes or Penguins or Punks or whatever new thing pops up. These pieces of art - portraits that can be neatly screenshotted (lol) and put on your Twitter profile to show that you purchased an Ape and now you own an NFT, and you can join a particular Discord and talk to other people about them, or join in events.
I can’t hate the latter part - people want to belong, they want to feel important, they want to meet people with shared interests, that’s fine - but the rest of it is a loathsome combination of greed and desperation masquerading as art sales.
The Lie Machine
NFTs are always justified by pointing to people’s watches or clothing - usually Rolexes, or Supreme shirts, which sell for a massive markup because of a combination of quality and weight of cultural adoration. This comparison is stupid, mainly because these are things that exist in real life and have some utility - and that’s if you assume, of course, that Supreme stuff isn’t inherently overpriced and silly.
There’s also a comparison to traditional artwork - that art is generally overpriced and given an arbitrary value by the people in its industry. Different cultures and industries assign values that seem random to outside observers, and thus the connection is made to NFTs because, well, most people don’t understand why they’re so expensive. I personally collect original comic artwork and have in the past paid a lot of money for it. So my issue isn’t that people spend a lot of money on things that are important to them, or indeed that things that you don’t understand can be worth a lot of money.
No, the many problems I have with NFTs start with the fact that it is an inherently tribalistic and predatory industry. Every discussion I’ve ever seen of NFTs is around price - it is always about what they’re worth, that they’re an investment, that they’re exclusive, that they’re unique, likely because there is very little actual artistic value or weight to them at all. They are, to quote my friend Kasey, only cryptographically unique links. The actual substance of the art that makes it unique isn’t the art itself, but how you receive it - something that, if changed, would not change the art itself in any way, shape or form.
Take, for example, my cover of Guardians Team-up #1 by Arthur Adams. Not only can I go and look at it and see the pencil strokes and the ink and the details and the little notes he made, but I can also with 100% certainty say it’s unique. There is not another. He may sell prints, but the real one is mine, and it is mine because you can see the exact things that make it unique. Even if someone had a scan of the original image, they would be unable to recreate it because of the tangible elements that go into art.
I also own quite a few Eric Tan prints - limited-run Giclee prints like his Beastie Boys print. This isn’t unique - it’s rare, but there are others. But it is interesting, and looks good on my wall, and is beautifully made. If someone wanted to put something of equal size and weight and beauty on their wall, they would have to source the original image at a high enough quality to make a Giclee print, which I would wager is impossible considering how Eric (like many artists) wouldn’t give that out. I also didn’t buy it as an investment - I bought it because it was cool as hell (the same goes for Arthur Adams’ work, though one could call it an investment). There is also the artistic value that this is one of the original Eric Tan prints - of which there is a limited amount.
One might say this is similarly valued to an NFT - based on rarity and the cultural weight of the piece itself as much as the quality of the paper it’s printed on. Except it’s quite the opposite - it is not unique, but it is valuable, and things being one of a kind do not necessarily give them value by definition. And Arthur Adams’ work is valuable because of his decades in the comic book world and the quality of his work.
None of this value is based on arbitrary trading statistics and a predatory investment industry that has built itself on the idea that if you purchase one of them, you might be able to flip it for five, ten, or fifteen times the amount. When discussing these pieces, I have never had to discuss what I paid, or what I might sell them for, or whether they’re a “good investment.” And crucially, nobody can clone either of them in seconds.
NFTs have become a form of religion - one’s alignment to them is alignment to protecting the industry and owning more - digital hoarding of web addresses attached to the blockchain. There is the near-constant discussion of the “value of the NFT industry” and talking about how “NFTs are going to blow up” and “be the future.” For me, the fun of art has always been that it’s cool shit - it shows people what you’re really interested in, and it’s also a conversation piece. NFTs are baubles - you really can’t display them outside of a digital profile that someone has to actively seek out, and the moment you take them outside of the computer, they are just images on TV screens.
I consider them one level eviler than the world of pump and dump crypto tokens because they lack even the basic liquidity of a Uniswap or other automated market maker. I’m sure someone will pop up that says “I bought this NFT because it was beautiful,” but I just can’t believe that is what most people want - I think most people are buying because they want to find a way to own something that will theoretically be the next Bitcoin or Ethereum and multiple their money by thousands of percentage points. The difference is that, unlike a shitty token that has some sort of community that may grow in value just by the nature of Bitcoin or Ethereum, an NFT art is “unique,” and thus does not really have any value other than whatever “club” it’s part of, if it’s even part of one. You aren’t even at the mercy of the markets - you’re at the mercy of whoever can be convinced that it’s valuable, which is mostly based on…you guessed it…whether you’re already rich, or popular, or both.
And…like I said, anyone can just copy them. If the file can be downloaded - which it often can - it can simply be attached to another thing on the blockchain. That may be easier to stop when it’s a popular piece from a big artist, but what about the smaller artists that may lack the legal or technical expertise to fight it? And what happens when someone buys their art when it’s been copied by someone else?
Fuck all, that’s the answer. Nothing happens. It’s on the blockchain, baby! The transaction is irreversible, and the artist gets nothing!
What’s important to add is that I do like the idea of artists being able to make money in a quicker and easier way. However, every NFT artist story usually involves them putting art on the Ethereum blockchain (which is horrendously expensive and bad for the environment) and being surprised because it sold for a lot of money. This is wonderful news for them, but these stories are also ones that you’ll find about the early days of Etsy and eBay. Except in both of those cases, there is a support system that can help people who are the victims of fraud, not one that is founded on the idea that one cannot reverse any transaction at any time.
And let’s not forget that these beautiful, open systems that allow us to access the world’s information are also predatory, taking a cut of your artwork that can sometimes outsize the profits you receive.
It is an oligarchy masquerading as a meritocracy (or a utopia), where the rich have built mechanisms to increase the value of their assets, drumming the desperate into a frenzy of people looking to become one of the rich months (or years) after that was possible. Celebrities like Lindsey Lohan aren’t joining because they care about art or NFTs or crypto - they are intentionally capitalizing on a frothy market that’s purpose-built to screw over the investor. It is built to overvalue assets that come from a famous person, just as the regular art investment world is, but with even less tangible goods and more chances to get utterly, irreversibly screwed.
Note: There are uses for NFTs that aren’t art related, but they always have the same problem of having to prove themselves. There’s a growing industry of games that have NFT items - which sure sounds like something an investor would like, but not something that seems to have much practical use other than “maybe you could sell an item in a game for real money,” which is I guess a thing you could do, but also requires the game to be popular enough to sustain its value forever, a classic thing that games tend not to last for. This is one case where being able to copy something may be harder, though, which is cool. It still doesn’t really seem more functional than just making an item one of a kind in a game the normal way, other than that you can sell it?
If I sound cynical about this, it’s because I cannot, even in my most galaxy brain, two-edibles-deep, you’re-paying-me-money-to-be-excited mindset find a way to like NFTs. Outside of “this is a way to maybe make money,” there is no argument I’ve read that brings me close to understanding what an NFT can do.
If the core value proposition is that something is unique, it can’t be easily copied - and when it is copied, it needs to have an easy and obvious differentiator between the copy and the real one. And when all that’s said and done, the original should have more value than the copy on a qualitative level - an artist’s signature, a watermark, particular stitching, the quality of the original…
…and even if you have all of that, something being unique does not automatically grant it quality. NFTs operate on the principle that being one-of-a-kind grants something value by default. Constantly repeating that an industry is “valuable” because of this is intentionally misleading - most art isn’t valuable, and most NFTs aren’t either.
It’s sort of like the whole thing that the comics industry does with variant covers, where they create multiple versions of a cover to actively sell people on the idea that they might have just bought the next Amazing Fantasy #15, despite that being famous for being the first appearance of Spider-man…at a time when people didn’t value comics as art. There’s another really good analog from comics, too - having issue #1 of something doesn’t make it valuable, as value comes from a combination of rarity and interest - and there are plenty of times where things are rare that aren’t valuable or interesting.
They’re also something that is not created with the intention of being sold, which is inextricably attached to every NFT. When you remove the idea that an NFT could forseeably be sold for more money than you paid, what value does it have? What beauty? What does it symbolize? What meaning does it have? And what’s the point of it being unique? It’s not a Rolex, that actually has a quality and heft and look to it, nor is it something you can admire outside of the computer, and even if you don’t care about that, it’s a status symbol of wealth and taste (if you feel that way about expensive watches).
In the end, what do NFTs stand for? Images that you have a fairly convoluted way of proving you own? Except you don’t own the image, you own URL to an image. It’s like a joke that you have to explain every element of as you go - by the time you’ve reached the conclusion, the person in question has tuned out. And really, what normal person is going to do these mental gymnastics to agree that your digital art is worth something?
NFT investors are pretending to sell a dream of access to wealth - both for the artist and the collector - as a means of generating their own wealth. Except the chances of being left with a worthless piece of shit are high for most people - and all that’s left are people desperately trying to evangelize an industry in the hopes that it will buoy their questionable investment decisions. While there may be a few people that make money on this, the majority - like a lot of crypto - will be left in the red, and every new entrant - every new NFT - will seek to devalue the industry as a whole, as the novelty of owning one of these not-quite-pieces-of-art is already waning.
If you’re reading this as an NFT fan and think this is a time to try and sell me on these, please don’t. I’m sorry you’re wrapped up in this. No amount of anecdotes about someone making a bajillion dollars on a picture of a donkey’s ass is going to convince me that this is a good thing.
This description of NFT became a bit of a meme originally from tumblr user queersamus believe:
“ queersamus: “Imagine if you went up to the Mona Lisa and you were like “I’d like to own this” and someone nearby went “Give me 65 million dollars and I’ll burn down an unspecified amount of the amazon rainforest in order to give you this receipt of purchase” so you paid them and they went “Here’s your receipt, thank you for your purchase” and went to an unmarked supply closet in the back of the museum and posted a handmade label inside it behind the brooms that said “Mona Lisa currently owned by jacobgalapagos” so if anyone wants to know who owns it they’d have to find this specific closet in this specific hallway and look behind the correct brooms. And you went “Can I take the Mona Lisa home now?” and they went “Oh god no are you stupid? You only bought the receipt that says you own it, you didn’t actually buy the Mona Lisa itself, you can’t take the real Mona Lisa you idiot. You CAN take this though.” and gave you the replica print in a cardboard tube that’s sold in the gift shop. Also the person selling you the receipt of purchase has at no point in time ever owned the Mona Lisa.
Unfortunately, if this doesn’t make sense or seem like any logical person would be happy about this exchange, then you’ve understood it perfectly.”
i think this was actually stronger without the comparison to your own collectibles because the question here isn't actually whether X's values is more durable than Y, but whether Y's current value is durable or not. So insisting your X *is* valuable just adds a bit of "old man yells at clouds" to it.