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Supported by
Jay Caspian Kang

Opinion Writer
It’s difficult to admit in polite company, but I have a small collection of nonfungible tokens (NFTs). I’ll spare all of you the lengthy throat-clearing about cryptocurrency, provenance and some litany of explainer clauses and just say that an NFT is more or less a digital deed that says you own something unique on the internet. To date, NFTs have mostly taken the form of digital images, which, in turn, can sell for tens of millions of dollars in the same way that a painting might sell for tens of millions of dollars at an art auction.
My NFTs aren’t worth anything close to that. But a few times a day, I’ll punch in a lengthy password, click over to the wallet where they all live, and stare at them. To date, I have collected a toad with an orange ski cap, a pink cat in a viking hat and a smirking whale wearing a Kobe Bryant jersey. The images are crude and somewhat blandly cartoonish — the toad is just a bunch of 8-bit pixels and looks like it could’ve been a bad guy in the original Legend of Zelda — and their worth is typically determined by a transparent, almost insulting rarity game that best resembles Beanie Babies collecting. As an example, there are 6,969 total toads. Only 0.80 percent of those frogs are wearing an orange ski hat, which means my toad is relatively rare. If the market on toads skyrockets, I could become a very rich man. (Full disclosure: I sold my toad before the publication of this newsletter.)
All this is about as dumb as it sounds. I am not a collector by nature, nor do I find much postmodern delight in scrutinizing the place of the meme in the age of digital reproduction, or whatever. Sometimes a silly cartoon image is just a silly cartoon image and gambling is just gambling.
But I will say the NFTs do bring me quite a bit of joy that I don’t fully understand. I am aware of the environmental dangers of cryptocurrencies (a lot of energy is consumed in the process) and although NFTs take up only a relatively small portion of the crypto carbon footprint, they’re not helping either. But I guess there’s just something funny and outsidery about a digital image of a toad who might one day multiply in value and pay for my retirement. The absurdity of the hope only makes it better: An economy where nobody works a bad job, where cryptocurrencies only go up in value and where financial planning for the future just involves buying more toads.
I’m certainly not the only person drawn to this chaos. NFT sales totaled over $2.5 billion in the first half of this year and show no real signs of slowing down. And so it seems worth asking a couple of vital questions about what, exactly, is going on.
Why are people buying NFTs?
Utopian marketing has always been a part of the tech industry. We’re thankfully about a decade past the litany of stories about tech companies that started in garages with a humble dream to make the world a more connected place. But as the last wave of tech has grown up and retreated into corporate fortresses, much of that “we will revolutionize the world” energy has gone into cryptocurrencies. Seen this way, the NFT market is just a symptom of a culture that always wants to move into newer, lucrative spaces, oftentimes without much thought on whether the thing they’ve created is a good or bad idea.
But there’s one way that NFTs are profoundly different from the last generation of online disrupters. In terms of ownership, they actually move in the opposite direction of projects like Napster, BitTorrent and the software communities that destabilized the entertainment industry. Those were about reproducing data and sharing it for free, or eventually, a subscription fee. NFTs are about taking what should be a fully shareable image and sticking a SOLD sign on it. Of course, anyone can just copy and paste the image anyway and use it however they please, which makes the idea of ownership even more of an act of faith. Everyone has to agree that the bits of code that confer ownership of that image actually mean something, and afterward, they have to participate in a market to determine a price for it.
To do all this, you need a community whose collective belief can ward off the demands of the workaday world. One place that kind of community can be found is on the chat app Discord, where thousands of NFT enthusiasts congregate in spaces dedicated to their toads, apes, etc. I’ve spent what is probably an unhealthy amount of time in these spaces and can report that the majority of the conversation involves people saying good morning to one another, posting screenshots of their toads and generally spreading good vibes (mostly about prices going up). Like every modern online ecosystem, there are tiers of grifter-influencers, plebes and casuals, most of whom are around for a quick thrill, but there’s also a core of converts who seem to truly believe that NFTs are the start of a new economy that traffics in memes, both in terms of distributing information, and now, in the actual transfer of money.
All this makes sense, given the trajectory of ownership — Napster might have made everything accessible, but it also had an atomizing effect that stripped away traditional meeting places like record stores and concert halls. NFTs, by contrast, function almost as a unique passport that allows you access to exclusive spaces. It’s somewhat misguided, then, to discuss NFTs as some sort of hellbent art movement or even an absurdist get-rich-quick scheme. The communities may be fleeting and its members may jump from toad to lion to penguin, but many of these people will never return to traditional jobs and the economy. It’s true that some have become so wealthy that they’ll be fine, even if they capitulate and throw all their money in, say, a slow-earning bond portfolio, but the majority have not. What draws them into the space is more of a stubborn refusal to believe anything they’ve been told about the way the world works.
Will NFTs just become part of the establishment? Or is this an actual disruptive thing we should take seriously?
In the 1960s, advances in video camera technology opened up a new medium for artists. “Video art” has many origin stories, but the most accepted one starts in 1965, when an artist named Nam June Paik is said to have filmed Pope Paul VI during a chance encounter in New York City and screened the footage at a cafe there. Paik said the show was a new form of art, and over the next decade, proselytized the destabilizing force of what he called the “Video Common Market,” which would allow people to create their own television networks and “strip the hieratic monism of TV culture and promote the free flow of video information through an inexpensive barter system or convenient free market.” Paik imagined that this would require a community of people with agreed-upon principles who stood in direct opposition to corporate and national power.
All this sounds a lot like what cryptocurrency apostles say about NFTs and the potential for intricately networked communities that use technology to break down hierarchies in society. But video art, of course, eventually got swallowed up by the art world. Paik’s work went up in MoMA and collectors started paying hundreds of thousands of dollars for video art. This doesn’t mean Paik’s provocations were in vain — if anything, he seemed to have predicted many of the accessibility and information questions that plague us today — but he, like so many other artists before him, went from countercultural figure to cultural figure.
It’s too early to tell if something similar will happen to NFTs, but it’s clear the legitimate art world is trying its best to make sense of the NFT market and fold it into its legacy operations. In March, Beeple, the name of the most well-known NFT artist, famously sold his work through the storied auction house Christie’s for $69 million. In May, to help offset financial hardship from the pandemic, the Uffizi Galleries minted a series of NFTs that were, more or less, images of their most famous works of art. And in July, the Institute of Contemporary Art in Miami acquired CryptoPunk 5293 from the iconic CryptoPunk NFT collection, and claimed to be the first major museum to take the NFT plunge.
But the museumification of NFTs is far from complete. In March, a group called the “Global Art Museum” began minting NFTs of some of the world’s most famous works of art. This was met with almost universal outrage from curators as well as from some in the art world media who called it an “art heist.” As it turned out, though, the Global Art Museum’s intentions weren’t all that destructive — they said they were trying to start “an international conversation about the blurred line between physical art and virtual #NFTs,” and more or less said the whole thing was a prank.
Prank or not, there’s no doubt the art world will be moving quickly to corner the NFT market, which offers up a more wide-ranging question: We can safely say that the tech companies won round one against establishment forces, whether media, taxi services or the cable companies, but have those institutions that remain learned anything? The showdown between NFTs and the art world won’t tell us the full answer, but it’s at least a preview of future fights between the decentralized chaos of cryptocurrencies and seemingly trenchant things like banks.
Two usually unshakable truths seem to be colliding here.
First: It’s never a good idea for legacy institutions to hop on the latest online thing. (The irony that you are reading this sentence as part of a newsletter put out by The New York Times does not escape me.) As a longtime worker in digital media space, I can take you on a long graveyard tour of iPad publications, pivots-to-video and newsroom TikToks. Tech — even anarchic tech — usually wins these battles.
Second: The art world co-opts everything. Museums are very good at disentangling images from, say, four messy contexts and settling on one clean one. I recall walking around the Whitney a few years ago with my daughter, then 2, and seeing an exhibit of protest signs from throughout the years. It felt like a morgue: All these good actions codified into words on rectangles and then tastefully strung up across a museum wall. If the communal energy leaks out of the NFT market, the most iconic images of the era, whether Beeple’s collages or the Bored Ape Yacht Club, will be put up on a screen somewhere and the technology will be adapted for use in auction houses.
It’s hard to imagine the second scenario taking place, no matter how much money gets pumped into NFTs and how strong the incentives become for the art industry to get this thing under control. Crossover events like the Christie’s auction and an even more recent sale of 101 Bored Ape NFTs by Sotheby’s might make it seem like the art world has decided to ride the NFT horse until it collapses, but the amount of publicity they’ve generated also emboldened the crypto crowd and legitimized them as art that’s worth tens of millions of dollars. The gap between the two worlds is just too wide and their differences are moral ones. Regardless of how you feel about NFTs or cryptocurrency evangelists, a healthy portion of them truly believe in a life outside of the traditional economy.
Or, at least, they mostly do. As was true in every stage of the Bitcoin rise to prominence, there’s a seemingly unresolvable contradiction in the gospel: If the value of a project is tied to its price, it also follows that the best thing you can do is lure in the people with the most money. NFT spaces may feel more like online communes than anything else, where people can hang out, share a common iconography and wait for the moonshot that will change their lives, but the full conversion requires buy-in from celebrities (Stephen Curry of the Golden State Warriors recently became an NFT hero when he changed his Twitter avatar to a Bored Ape) and institutional money.
So, I don’t think it’s particularly accurate to think of the NFT movement in terms of art or even pure degenerate gambling. The community, despite its contradictions, still matters. But because of its ties to money, it will never quite break free from what it says it hates.
Have feedback? Send a note to kang-newsletter@nytimes.com.
Jay Caspian Kang (@jaycaspiankang) writes for Opinion and The New York Times Magazine. He is the author of the forthcoming “The Loneliest Americans.”