How We Need To Talk About NFTs: A 21st Century Digital Survival Guide
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We need to talk about NFTs.
More specifically, we need to talk about why we’re all yelling at each other over NFTs.
“Simulations are not illusions. Virtual worlds are real. Virtual objects really exist. And the sooner we get used to these ideas, the sooner we’ll be able to grasp some of the digital age’s deepest tensions.”
David Chalmers, Reality+ : Virtual Worlds and The Problems of Philosophy
Every week it feels like there’s another major NFT controversy and in the past month alone, indie gaming hub itch.io made a strong statement about their distaste for anything non-fungible, the COO of Kickstarter gave a meandering interview to The Beat about the company’s divisive plans to go on the blockchain and YouTuber Folding Ideas made a two hour long viral essay deriding NFTs called “Line Goes Up.”
A few have asked about our stance on NFTs:
NFTs are a scam. If you think they are legitimately useful for anything other than the exploitation of creators, financial scams, and the destruction of the planet the we ask that please reevaluate your life choices.
Peace ✌️
— itch.io (@itchio) February 6, 2022
Few things cause such extreme vitriol in an artist’s social community as an announcement that they’ll be minting an NFT. As a digital artist who sells NFTs AND a person who’s hyper-critical of most big tech announcements, I want to try to help you survive the great NFT apocalypse.
What are NFTs? If you’ve somehow found this article, but haven’t yet found a solid definition of what an NFT is, I’ll say this as simply as possible… an NFT is a digital receipt that shows a financial account you control has purchased and now owns something. It’s just the receipt, but in the art world we call this “provenance” or “chain of title”. What’s interesting is that this receipt allows the person who created the art to automatically receive a royalty payment whenever the “ownership” is resold. NFTs automate a few functions that used to require costly human intervention, like providing authentication services and collecting / distributing royalty payments. If your eyes have started to glaze over, then you probably shouldn’t have that strong of an opinion about NFTs. I’m only half-joking. NFTs sit at the intersection of three societal forces that you may or may not consciously engage with— ownership, techno-libertarianism, and artists.
Ownership
The concept of ownership isn’t cut and dry. When I say that I own something those words might mean radically different things to different people. The common notion of ownership is a mercantile interpretation where you purchase an item at a store and possess it physically, but that’s a very narrow view of how ownership works. The most effective definition of “ownership” I’ve been able to come up with is, “having claim to petition the use of state resources to enforce exclusive exploitation of tangible or intangible objects”. A “tangible object” would be anything physical, like a house, or even timber rights. An “intangible object” would be something like the right to use popular comic book characters in your own stories. “Exploit” would mean to sell, lease, change, or otherwise make use of something. In every circumstance possession doesn’t actually equate to ownership. That old saying “possession is nine-tenths of the law” doesn’t mean what you think it does. It means if you possess something like an illegal drug or stolen car, that becomes the bulk of evidence against you in court, not that having physical control of something makes it yours.
That said, even when we buy “claim” to things you never fully “own” them. I “own” stock in numerous companies, but I can’t walk into that business and start redeeming the value of my equity by handing the receptionist a stock certificate and tossing a couple of the company’s laptops into the trunk of my car. Ownership always has caveats. Anyone who ever lived in a community with a homeowners association knows there are limits to what your ownership means. On a larger scale we can see disputed “claims” escalate to horrible violence, like when the construction and operation of the Keystone XL pipeline conflicted with indigenous rights and potentially broke both the 1851 Treaty of Ft. Laramie and the 1855 Lame Bull Treaty.
In the art world, ownership is just as complicated because it combines claims related to both tangible and intangible objects. You have the widely known intellectual property framework of copyright and trademark, but there are additional, so-called, “moral rights” which govern things like how an artwork can be displayed, stored, altered, or associated with other works or collections. This also extends to likeness rights for popular figures and touches on controversies like Anish Kapoor’s infamous purchase of the exclusive rights to use the world’s darkest pigment, Vanta Black, for creative purposes.
So right off the bat when someone says that you don’t “own” anything besides the receipt when you purchase an NFT or that an NFT can be “stolen” by right-clicking and saving, you’re already in over your head. For example, if you go to the Louvre you can enjoy seeing the Mona Lisa and you can probably sneak some photos of it for yourself, but I don’t think anyone would take you seriously if you claimed you owned the Mona Lisa. That’s because you don’t have the receipt for buying it… you lack the documentation of a “claim” to it. NFTs are the receipt, and like the title to your car or the deed to your house, the receipt is all that matters when society wants to determine ownership. This is because, again, ownership doesn’t mean possession, it means the right to exploit.
Now we need to understand the relationship between ownership and value. Let’s say you buy a limited edition poster from Mondo and it costs $80 and it’s limited to 100 printings. How are you allowed to “exploit” that purchase? You can hang it on your wall, maybe buy a nice frame for it. You can try to resell it later. You can’t make derivative works from the image. So what gives it value? Is it authenticity? Picasso famously disowned some of his own works and claimed, “I can paint fake Picassos just as well as anybody.” Is it scarcity? Mondo could potentially print another thousand editions and justify it by making small alterations to the colors or method of printing. You don’t own the original art, if that art even exists somewhere in a physical form to begin with. So what stopped you from downloading the image from the site, running it through a good AI upscaling program and going to your local print shop to make your own bootleg for $30? Not much honestly, except that you can’t legally resell the bootleg. So is that the only thing adding value to the purchase, the right to resell it? Maybe you just want to support the artist out of the kindness of your heart? If that’s the case why not Cashapp them directly with no exchange of any kind happening?
Now let’s imagine you purchase an in-game skin for your MMO character. What is the value of a digital object if you can’t resell it? Is it that you want to support the corporation which runs the game? Is it bragging rights? Every justification I’ve just listed is dismissed as ridiculous in heated arguments over NFTs, but they’re all valid metrics to use when you make a value judgment. I don’t think most people have a firm understanding of why they assign value to things. You’d probably engage in a rigorous mental exercise if you were making a business investment, but most people don’t take those same steps when they make personal purchases. NFT hype has this horrible habit of straddling the line between “investments” and “personal purchases” and that immediately causes friction between the people who think it’s a stupid “investment” and people who are able to spend $20,000 to say they “own” a meme without thinking twice about it.
Let’s go back to 2015 when Wu-Tang Clan released their single-copy album “Once Upon a Time in Shaolin.”
It was purchased at auction by the now-convicted “Pharma-Bro” Martin Skreli for two million dollars. Their fans raged against the one-off album concept and then raged twice as hard when someone as hated as Skreli purchased it. This is a prime example of manufactured scarcity. Almost all modern music is digital art; it exists primarily as infinitely reproducible files which maintain the same fidelity as the original copy. Despite the manufactured scarcity and public outcry, the album doubled in value when the US State Department sold it to a collective of NFT owners in 2021. I want to highlight this high-profile case of taking an art object and moving it to an NFT to illustrate the idea that there’s so little difference between the two situations they’re basically interchangeable. Limited editions and the value judgments made in purchasing those editions aren’t native to the world of NFTs. This purchase also highlights that there’s definitely a class conflict which underscores the discourse around scarcity of art objects. The Wu-Tang fan-base, broad as it is, still has a statistically insignificant number of people who can afford to buy “Once Upon a Time in Shaolin.”
These tensions become magnified when you start to combine them with the tech sector and growing public distrust of it.
Techno-Libertarianism
Never…
Ever…
Believe the hype.
I don’t believe in any Utopian sales pitch about the next technological marvel and neither should you. Maybe it’s my nihilistic nature, maybe it’s my experience, or maybe I’m just really good at seeing things objectively… but technology has to justify its existence for me to take it seriously. I’m absolutely the exception in a media industry crawling with techno-libertarians. One time I was producing a project for a major record label and they had a person who was working closely with the CEO to make sense of tech industry trends. I casually mentioned how I thought Peter Thiel and Elon Musk were ghouls and let’s just say that our relationship was strained after that. Libertarianism is an ideology which has coalesced around the toxic notion that unhindered personal freedoms and unregulated markets are the ideal way for the world to operate. The end result of this thinking is usually a dystopia where anything we currently consider a crime goes unpunished if you can afford to hire a private army to defend yourself or pay someone else who already has a private army to defend you. It’s fundamentally amoral. It’s also very popular with tech billionaires whose narcissism leads them to overestimate both their popularity and net benefit to society. In the past decade they’ve become much more open with their machinations to destabilize democracies, break worker unions, erode the concept of privacy, and engage in all-around supervillainy. The lyrics, “I thought that you were Tesla, but you’re just another Edison,” from Penelope Scott’s anti-techbro anthem Rät are an ode to the bullshit of Elon Musk and how he tried to pull the wool over the eyes of a generation searching for a Tony Stark-esque symbol of hope. It’s all indicative of the tide of popular opinion turning away from these once-deified figures.
Crypto, with its bipolar messaging about free and open public transaction records, contrasted against its usage in money-laundering and drug trafficking, is a flashpoint for this disillusionment. Crypto feels like it would be a scam.
Photo by Dylan Calluy on Unsplash
After all, Uber said we’d be “entrepreneurs” not wage slaves, and Facebook said we’d become closer to each other, not rip families and friends apart in a culture war they ignited because negative interactions lead to more profitable app engagement than positive experiences did. So why should we believe that crypto will fulfill its promise of creator economy freedom? It probably won’t. The allure of crypto is, by nature, libertarian— fewer regulations for the buyers and even fewer regulations for the sellers who can find novel ways to manipulate value in a hyper-capitalist nightmare of intangible commodities.
If we cut through the ideological implications of crypto there are numerous arguments that can be made about why blockchain tech, and by extension NFTs, exist on a spectrum of useless to harmful. Some of them hold more water than others. Are NFTs destroying the environment? Yes, but most things are also doing that in a system which refuses to engage with sustainable energy solutions at-scale, and just playing video games uses about 4x the entire annual energy consumption of the ethereum blockchain, one of the more energy-intensive crypto standards . There’s also the question of if blockchain solutions add any meaningful functionality to existing processes; the experts are divided on that. What we do know is that NFTs and Crypto hold value. We know this because people “believe” they hold value and just like some chain-smoking retiree glued to a slot machine in Biloxi or the person who bought a thousand shares of some fly-by-night penny stock from a tip on a message board, you aren’t going to convince them that their crypto is worthless.
Does this mean that NFTs are explicitly harmful? Maybe, but in the same way that all techno-libertarian fantasies are harmful. Techno-libertarianism creates ecosystems where there are predators, prey, and few if any authorities to appeal to for help. When new technologies start to become ubiquitous the sharks always smell blood in the water. Arthur C. Clarke once opined that, “any sufficiently advanced technology would be indistinguishable from magic.” This is why your mom thought a desperate Nigerian prince emailed her a sincere plea for help in 1998 and why your dad thinks that Microsoft needs him to pay them in Target giftcards for anti-virus support. Technology breeds a special kind of chaos… and in the case of NFTs that chaos manifests as the “relatively” harmless proliferation of ugly ape profile pictures and the endless pontification of grind-set gurus like Gary Vaynerchuk. For every Bored Ape Yacht Club there are at least a hundred more malicious crypto projects which over-promise and either under-deliver or vanish with your money. However, if we judged the usefulness of email based solely on the volume of phishing schemes none of us would be using it. We have to make sure that the mere existence of bad actors doesn’t define the technology, but if you don’t see the utility in that technology it’s much easier to condemn it. Most of us aren’t going to realize we’re using blockchain or crypto in most of its coming implementations. We might all use it every day, but it will be invisible, like the systems that process your credit card transactions or keep the malware app you just downloaded from bricking your phone. The disengagement the average person has, and will continue to have, with blockchain technology combined with a growing distrust of technologists makes it very easy to criticize NFTs. Some of it’s obviously warranted, but only if the venom is pointed in the right direction.
Most people have jobs that are part of exploitative, corrupt, systems. The popular phrase “there is no ethical consumption under capitalism” is so often quoted because it’s true. In some way, somehow, everything you and I do, every single day, contributes to the climate crisis, exploitation of the global south, or concentration of wealth into the hands of oligarchs. I absolutely encourage everyone to criticize NFTs as part of a global system of inequalities, but singling them out is a little hypocritical.
Artists
In late 2019 a banana duct-taped to a wall sold for $120,000 and everyone lost their fucking minds. The work was called “Comedian” and it was created by artist Maurizio Cattelan with the sale happening at Miami’s Art Basel. Some artists loved it, but hated the commercial implications. Some artists hated it because they felt it wasn’t “art”. Some people loved it because it signaled a resurgence of high dollar private sales for conceptual work in the fine art market. Some people hated it because they work in a warehouse breaking their bodies for $30k a year and, in their opinion, some asshole taped fruit to a wall and made the equivalent of four years of their salary by, again, taping a piece of fruit... to the DAMNED the wall.
Jacobin recently published an article entitled “Art and Capital Have Become Nearly Indistinguishable” further calling attention to the pressures between art and commerce that the banana represents. All NFTs are now the banana.
NEW YORK, NEW YORK – AUGUST 17: A Kaws statue by artist Brian Donnelly aka Kaws stands at The Rockefeller Center Plaza in Midtown on August 17, 2021 in New York City. (Photo by John Lamparski/Getty Images)
Art is indefinable… it’s somehow meaningless, but incredibly important. For example, the same conservative pundits that try to say arts education is useless are the ones who say that Piss Christ was going to lead to the destruction of civilization.
If art isn’t important then why did conservative political propaganda channel PragerU make a video in 2014 called “Why is Modern Art so Bad” and then make another— completely separate— video five years later called… wait for it… “Why is Modern Art so Bad?”
There’s something about art and artists that holds a lot of power. Because of that there’s a long-standing campaign to strip artists of their voice. You see those efforts working when people use the term “selling out” or “my kid could do THAT.”
We tend to elevate artists above the mundane concerns of daily life, but the fact of the matter is that artists deserve to eat well and sleep comfortably.
Art is my family business.
I’m a third-generation professional artist. Most of the people I know are artists and unlike other skilled trades, proportionately few artists are able to make all of their wages from their work. They carve out a patchwork living from teaching, unrelated day jobs, commissions, and sometimes even less socially acceptable endeavors like sex work. Art is a nasty, difficult, business and if you’re able to make some noise in the space you’re extremely lucky. There is, however, a division between some of the artists who exist in the gallery universe and the ones who exist “in the trenches”. The people in the trenches, to me, are people who grind it out at comic conventions doing on-the-spot commissions and people who travel around to regional art fairs… the kind of high-output / low-profit transactions that can really rip away your self-esteem when you see a single work sell for a million dollars at Sotheby’s. There’s definitely a roiling tension between those worlds and NFTs have made that rift into a mile-wide canyon.
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I was recently on the instagram account of artist Shintaro Kago and he announced that he was selling some NFTs. That set off a hundred-plus comment thread of people raging at him. Some of the comments were from other artists who insisted that artists should make their living from commissions or merch and take nothing from rich benefactors. Frankly, that’s just fucking ridiculous. It’s ridiculous because when you create a commission you’re abducating creative control to the person commissioning you and that’s not the kind of work that these followers are there for in the first place. Second, any market where an artist can sell their work, they should be able to do it and enjoy the same kind of blissful innocence that the average person enjoys by driving a gasoline car, taking a long shower, ordering from Amazon, and eating meat. I appreciate that “other bad things exist” isn’t the best take… but I really refuse to accept that any artists should be pilloried for trying to eek out a living in a culture hostile to rewarding creative output. We can all fight bad systems while existing within the framework of those systems. These kinds of purity tests do nothing but contribute to the entropy of positive movements.
As for myself, I’m a digital artist, and that means that I don’t usually have the same mechanisms to sell “original” art that artists who work in physical mediums take for granted. This is why I’m always trying to find novel ways of balancing the accessibility of my work against how I engage with the commercial market. This has resulted in some baffling experiences for myself and the people who typically make purchases on the platforms I’m able to deliver to. For example, I released my virtual reality work “Lucid” on Steam in 2019. The average Steam user enters that ecosystem assuming that everything on that platform will be a “game.”
Lucid is many things, but definitely NOT a game.
This makes it very difficult to manage the expectations of people who organically discover my projects. In the past I’ve also dabbled in video editions and other kinds of art market vehicles, but NFTs created the first robust set of marketplaces that explicitly said “come here to buy original digital art”. That’s huge.
a lot of people seem to miss that the entire point of NFTs is to make content FREE while making ownership scarce.
nobody is forcing you to pay for an NFT, you can still enjoy it FOR FREE alongside everybody else.
you like my music? you can have it for free.
— rac.eth (@RAC) February 6, 2022
Musical artist RAC recently made an extended twitter thread where he explained why he embraced this model.
i’ve personally taken a more fine art collector first kind of approach than mass marketing my NFTs.
it’s more of my speed and i can focus on a smaller subset of people.
I have 3.5 million unique listeners per month on spotify, yet I made more income from 5 collectors.
— rac.eth (@RAC) February 6, 2022
I’ve taken a hybrid approach, offering my Patreon patrons a virtually free NFT each month as part of their overall perks. I also have collections available on OpenSea, like my Tarot project which just recently launched.
Maybe this makes me an unreliable source of information about NFTs, but I think it’s important for people to understand perspectives like mine. I’ll drop NFTs in a hot minute if something else comes along that fits the needs of digital creators like myself. That’s really at the heart of why artists are jumping on NFTs. Platforms like instagram have conditioned our followers to believe that the art they consume is “free” while Meta sells ads against it without sharing any of that revenue. Because of this mass brain-washing, any move we make to financially support our creative output is somehow tainted or disingenuous. If every follower of someone like RAC, myself, or any artist paid even fifty cents a month to continue experiencing our work I guarantee that the number of creators moving toward NFTs would drop by 99%.
Photo by Igor Miske on Unsplash
All that said, I think that artists also have an ethical responsibility not to engage in the kind of cult-like scams that have been popping up in the NFT universe. On my own site I’ve outlined exactly what buyers are getting and given them options of participating in editions without doing so on the blockchain. My FAQ is fairly straight-forward and I’m posting an excerpt here to show what an NFT sale looks like from a responsible creator who isn’t trying to build a value proposition based on lies, misunderstandings, or a pyramid scheme structure.
What is a Digital Original? This is the master file the artist has created which is used to make all subsequent physical and digital reproductions. The digital original will always be of the highest resolution and contain security features not reproducible at lower fidelity.
Dimensions: Digital original dimensions would translate to between two and four diagonal meters if physically printed.
Watermarking: Digital originals are embedded with incredibly small watermarking features that can only be resolved when viewed at maximum size.
Provenance: Digital originals purchased on the blockchain from the artist’s verified accounts are considered to have full provenance through virtue of the features of the original (i.e. watermarking, dimensions, etc) and through established chain of title through the blockchain. Digital originals purchased offline are provided with signed and sealed documentation along with a description of the physical storage medium (e.g. serial number, make, model, etc). All editions in a set, both on-chain and off are considered part of the same set. An edition of 25 will only have 25 files issued collectively between purchases on-chain and off.
Pricing: Works are priced differently between on-chain (NFT) and off-chain. Because on-chain originals have smart contract provenance, an automatic royalty, and no physical medium, they are offered for sale at a lower price point than off-chain works. Off-chain works are priced at approximately 3x to 5x the on-chain list price plus a provenance fee of 5% and transfer to the buyer’s preferred archival medium is at the buyer’s expense.
Rights: Unless separately negotiated no copyright is transferred by purchase of a digital original edition and one archival master is always held by the artist for authorized lower resolution reproductions and to compare watermarking features of digital originals.
That’s all fairly straight-forward and I wish the tens of thousands of NFT creators who are doing similar things would, collectively, put more effort into helping their followers understand what they’re buying.
Conclusion
If you’re a creator, please try to create responsibly and be understanding of why there’s a negative perception of NFTs. I think we have a duty to educate and also call out bullshit when we see it. That’s really the best way to build trust.
If you’re an NFT buyer, I hope that you understand what you’re buying and not throwing your money into a pyramid scheme or purchasing a copy of Jodorowsky’s Dune pre-production book and thinking that you can adapt it into your own movie or series.
— Spice DAO (????,????) (@TheSpiceDAO) January 15, 2022
If you still hate NFTs, I hear you and you should definitely be vocal about it, but if you’re directing the hate at artists you follow because they’re more accessible on social media than some amorphous system of oppression or cloistered group of oligarchs, I’m sorry, but no… just no. Take a look in the mirror, examine the compromises you make every day, and build a better plan of action to fight the issues you see. Maybe fight harder for UBI or demand broader funding for cultural institutions… maybe advocate for a return of something like the Public Works of Art Program that the US had in the 1930s, but don’t shit all over them for making the same hard compromises you make. If you follow them on social media they’ve enriched your life for free (which is more than you’ve likely given them in return) and they already take enough shit for just existing.
And finally, if you’ve read this entire article and are now completely apathetic to the existence of NFTs, then you’re probably the most well-adjusted category in this wrap-up and I envy you.
***
Dekker Dreyer is #GayNrd’s Art & Technology Editor by day and The Phantom Astronaut by night.
