This is the second, and if we’re lucky, last post about NFT’s. The first one is one the blog and you can read it here.
Make no mistake, Non-fungible Tokens (NFTs), are all about money. They involve art at some point, but they are tokens, they are all about money and in some way they sort of are money. On the surface, NFTs are simple from a regular, internet sort of person perspective. They are a way to buy and prove you’ve bought a completely digital thing in a completely digital way.
To date, they have been a mechanism for early crypto investors to diversify crypto asset allocations and make more money. They’re also really good for money laundering as well, but that’s besides the point. There seems to be three archetypes involved in NFTs: already rich crypto-currency speculators, desperate artists eager to try anything to try and make a buck and people who wish they were rich crypto-currency speculators. Give this all a good, vigorous stir and you have the hype-cancerred pit of desperation that NFT’s have become. You may have already figured out that I’m generally not a fan of how things have turned out. And how things have turned out is that prices spike and the bubble inflates, and that drives even faster, rampant and ridiculous speculation. And this drives art and artists into more desperation playing catch up to something that will inevitably implode and screw them.
Cost and Value
When you have a potentially rapacious system encouraging the churning out of questionable amounts of things that beg to qualify as art, you have to wonder if the gallery system wasn’t so bad after all. You know, that whole deal where there was a gallery that showed work and represented artists, sold their stuff to dealers or collectors and then took a generous cut. At least the gallery system relied on art being art first and on at least some half-assed notion of aesthetics at the beginning. And at least it couldn’t be automated. The generous cut is one of the things that NFT’s were supposed to address with automation and systems approaches.
This amazing article lays it out terribly well.
The financialization of everything may be the opposite of what it’s trying to fix, and may blind us to other possible solutions. The question may not be simply, “How do we build a better business model for the art world?”, but rather: “How do we build sustainable, humane economic systems that allow all people to thrive and create?” If we are reinventing monetary systems and value itself, it should align better with what we actually “value.”
That’s exactly it. We now have a system which doesn’t align with what we value. Or if indeed this money-art does align with what we value, it’s clear we’re doomed to be the greedy, crass consumers of whatever is thrown at us. I’m terrified that the latter is true.
There is of course the environmental question which also clearly points to a value system. If we, meaning internet types and “knowledge” workers and all that, are more than happy to actively and knowingly further a system where art makes our digital lives even less sustainable ecologically, there are severe issues afoot. This is again a display of value, and not a good one. The culprit is of course Proof of Work mechanisms and how Ethereum, on which most NFT transactions happen, work currently. How they work is you need tons of computers doing tons of math to verify that if someone purchased an NFT, everyone knows they did and someone else can’t say they did. This requires ludicrous amounts of electricity to happen.
However, there is hope, and I want to emphasis there are options here, it’s just they need to be further explored. There are possible/probably moves to Proof of Stake mechanisms for NFTs which would make things a better in terms of unrestrained energy usage. But this has been “in the works” in Ethereum for a while. Fingers crossed.
We can do a whole hell of a lot better. And by better I mean better for artists AND the environment. There is movement to other, more efficient mechanisms (read below) and other chains that might work better, but there is very little effort in the design of the systems, just technical efficiency improvements. Instead of designing a better system, we’re making the system we have work better and in the end, the art, the very reason I’m even typing here, suffer quicker and harder.
What I would like to see is work towards not only not just feeding this system with more artists minting more and more NFT’s desperately trying to make a buck and burning more carbon, but work towards designing a way for art to be digital, verifiable and beneficial to the artist not the investor.
What if we thought about art and rarity differently?
What if we held to principles of distribution differently and came up with a way where the more you share, not hoard, art or creative output, the more the artist or creator got paid?
What if we were collectively working towards a sustainable, both ecologically and monetarily, system that skewed buyers away from the artists who already have all the fame and all the interested buyers already? What if we created mechanisms that encouraged and helped the struggling artists to become more known and make an actual sustainable living?
These are all questions I’m sure seem laudable, if not entirely unrealistic, but worth a think. It’s quite amazing really that some bright folks out there have managed to reinvent money and turn how we think about digital transactions and value exchange works completely on its head. This is just a beginning if you ask me, and not an end to itself. Once we hopefully plod through this mess and the boom-burst cycle of hyper-art-capitalism ends soon, we can move on to greater and more sane things.