Non-fungible tokens (NFTs) are so new, weird, and fast that they give even techies future shock. “The street finds its own uses for things,” as William Gibson once wrote. In this case, the blockchain — artists are adopting NFTs today faster than the infrastructure can be built. This delightful inversion of the normal product/market fit challenge puts them in an “uncanny valley.” NFTs are a new form of digital object, and we have yet to see what they are capable of.
Famed multimedia artist Brian Eno asks a great question about NFTs in an interview with Evgeny Morozov in the Crypto Syllabus:
“I want to know what is changing, what is being made different, what is helping, what is moving?”
We need more people like Eno in the conversation. The teams building NFT technology are motivated by the public good and hungry for input from thoughtful critics. The current speculative environment sometimes feels like a distraction from the long-term potential of what we are building, but at the same time, this spike of awareness is a golden opportunity to invite new voices to help clarify the vision and purpose of what we are building.
Eno’s questions are a lens focused on the cultural value of NFTs. Let’s take them one at a time:
What Is Changing?
NFTs are a powerful form of digital object, with new capabilities so compelling that people are able to create a market for them. In the 1600s, a wide variety of tulips first became available in Europe, and as they entered the mainstream, they were caught up in one of the first market manias. The bubble has passed, but we still have tulips and markets. Similarly, I think it is useful to answer Eno’s question of what is changing, not from the perspective of the current euphoria, but about the lasting impact.
NFTs have attributes that are new to digital objects: provenance, history, authenticity, ownership and the ability to resell in a market. Provenance provides the possibility of authenticity, of a link to the original creator.
An NFT is not really about the image, but about where it came from. The true rarity is a great image stored as an immutable file, minted by the artist and purchased from an unbroken chain. For any more tenuous link, buyer beware. This means you can’t just purchase based on something looking good. It has to be about a relationship with the original artist.
Counterfeit NFTs sold by scammers and right-clickers have no value because value comes not from the image file, but from the authentic relationship with the creator, verified by the blockchain and embodied by ongoing royalties, content updates and community events. Because they are digital, these objects can be upgraded over time with new capabilities and connections. The history of their interactions with other digital objects enhances their value, both in the market and as useful tools.
Even in their infancy, NFTs have a positive impact beyond art. A fresh crowd adopting crypto wallets lowers the barrier to entry for Web3, as artists’ higher standards for intuitive ease-of-use inspire a new round of product refinement. Crypto wallets allow for self-sovereign digital identity, making social profiles and logins into something owned by people, instead of free labor we give to Facebook or Google.
Custody of one’s own digital identity is a game-changer in the ownership stakes of the web, and the long-term consequences will look like diversification in games, apps, and social media run by communities, all working over shared global datasets. Instead of asking Facebook for your graph, apps will ask you for your graph and you’ll control which facets of your identity to share.
What Is Being Made Different?
Because provenance and authenticity have been lacking from digital objects for so long, we should expect to be surprised by what they offer in practice. In real life, an object’s historical texture is often the source of its value. Heirlooms are important because their histories are personal, and in the extreme case, the history can be so powerful as to verge on magic.
NFTs have the attributes to support this texture, and so their impact may be only limited by our imagination. As the late David Graeber observes in his densely mysterious “Towards an Anthropological Theory of Value: The False Coin of Our Own Dreams,” heirlooms can play a starring role in organizing the productive capacity of a civilization. In a gift economy, the commodity price system is replaced with a web of relationships, demarcated by the provenance of objects as they are exchanged and powered by the promise of future exchange.
While the narrative about NFTs is dominated by discussions of high prices and pixelated profile photos, the difference this new sort of digital object brings may be more interesting when we consider more prosaic objects — when the price is low or free, there is more room to be surprised by how people use them. NFTs are an engine of decommodification with the potential to reverse centuries of economic enclosure.
This is in complete disagreement with the well-cited article “NFTs, or The Readymade Reversed” by David Joselit, who writes, “Duchamp used the category of art to liberate materiality from commodifiable form; the NFT deploys the category of art to extract private property from freely available information.”
What Joselit is missing is that the core distinction of NFTs is not their market price, it is their unique provenance, which gives them some of the power of heirlooms. Especially outside of the context of high-priced art, the relationship value of an NFT is likely to exceed its market value. If NFTs can attach this relationship-based value to everyday objects, they offer an end-run around capitalism’s alienation of labor.
What Is Helping?
It’s amazing that artists are getting recurring royalties from ongoing sales of NFTs. It seems fair, and it makes my friends “the capitalist assholes” happy. I’m curious what it will mean for a new generation of artists to explore this medium. I think that is helping.
One longer-term consequence of decommodification is renewed attention to our supply chains and connections. As different people and communities have different values, some NFTs will be more tradable in some communities than others. It remains to be seen whether this polarizes exchange networks around political or cultural differences, or engenders a new cosmopolitanism. These are the kinds of questions I hope humanists like Brian Eno can help investigate.
An essential ingredient in the gift economies Graeber describes in “Towards an Anthropological Theory of Value” is a community-based in ongoing relationships of trust. The failure of web 2.0 to deliver on community, in favor of advertisers and engagement, is part of what puts NFTs in the uncanny valley.
If you’ve only ever experienced centralized digital identity and relationships, it can be hard to hope for something good from decentralized versions. The people building web3 are motivated by the experiences they’ve had with software that serves its users, not its advertisers. Most software consumers haven’t been so lucky, so there’s an uphill battle to show people that these digital objects, identity and relationships are more trustworthy than the previous generation.
It’s hard to imagine today’s attention economy delivering software that scales up our trust networks in a useful way, but web3 promises new incentive structures that give users ownership of the software. Dunbar’s number, the hypothetical quantity of close relationships a person can have, is usually figured at about 150. Good software that assists trust formation instead of fogging our communications could double that number or more. Could we “scale up” the power of a gift economy from premodern populations to our worldwide community using the best of what we’ve learned about social media?
What Is Moving?
NFTs are not fungible — they are the opposite of a commodity. Applied to a box of sneakers, they are the perfect way to see into the supply chain — this sneaker was sewn by this person in that city, and was wrapped into this pallet, and trucked to this port, and shipped across that ocean, and unwrapped and redistributed to retail, and now as the buyer, I can pull up all that history on my blockchain explorer.
In a world where the buyer can see the maker so clearly, won’t that relationship change and the best makers find an enthusiastic audience of informed buyers? What does that do to the nature of the firm? Who needs global brands, trademarks and IP when you have hardware wallet signatures and a direct link to expert makers? This is the end of the age of the commodity.
The graph of interactions as NFTs circulate can itself become the clock to a blockchain. The organic texture of real events offers more proof-of-life than mechanical contests like proof-of-work or stake. The resulting entropy provides the same nonrepudiation guarantees Bitcoin is burning energy to prove, and instead all we have to do is connect with the real world.
Writing human artistic judgment, and the buzz of human connection itself, into the blockchain has interesting philosophical implications for our long future. In the epochs to come, will the economy run on a cold mechanical commodity currency or by trading objects with the texture of provenance among communities of digital identities? The latter option sounds like it might have more room for art and artists.
If you’re interested in building technology for the long future, my team at NFT.Storage creates storage services for NFTs based on the interplanetary file system (IPFS), which is designed to support humanity’s expansion into the solar system.
Feature image via Pixabay.