After making the decision to write this, knowing the cryptosphere fairly well, I immediately heard the flood of insults or "dewd, you just don't get it" comments. So, as I make a few points from perhaps a place of conservative wisdom, be aware that I get the other side of this discussion; truly I do.
Let me start on the foot of a recent example. The "Chahhhlie" YouTube video was just converted from a free internet asset that everyone has had available to them for years, did I mention for free?, into a one-time NFT, taken down off the channel, and sold for $700,000+.
I told you that "I get it", so let me use my own words to describe why someone with both intelligence and an extra $700K lying around would want to do something like this. Nostalgia holds value: a piece of internet history, an icon perhaps of a poignant simpler time, an historical placeholder towards a future built completely around technology, a generation raised online reflecting on the early days of YouTube as pioneering days before all of the current changes and what comes next we have yet even to see...
Am I getting anywhere?
Things hold tangible value in ways that matter. Even if things are no longer defined as physically-tangible. But ahhh the existentialist of internet-era, you see virtual games, virtual reality, 2D screen interaction, movies, binge-shows, we live more in the alternate, than in the 'real'. When mining advanced from the soul of World Of Warcraft, the gamers understood immediately. So did the CCP. When people started getting married on Second Life (gag lol), the internet made no excuses.
Truly, I understand. I understand to the degree that $100 is a pretty cool price to pay for a piece of internet history... that everyone can already have for free, anytime. Even $1000 for something really important. Trust me, if I were the sole owner of "gerse bermps" I'd be pretty stoked right now- lol!
But, please try to understand there are weaknesses in the rationale of $69M for Beeple collection, $700K for Charlie video.
The value shift is here. The future is in the now, but I'm not just watching the big shockers, I am mostly watching the market and what they are investing in. I love that plebs, if I should borrow from the vernacular, are putting their money on value-based appreciation. When they like someone's art, they spend a lot on it. This is, in most cases, digital art, virtual multi-media, sometimes gif/vid combo's.
As an artist and musician, I appreciate patronage as much as anyone could. In fact, I sell digital software used by studios large and small all over the world. So, what is my beef? Hey, I appreciate the freedoms each of us have to do as we please, and my advice is only advise those who need to hear it and take in the occasional whims of wisdom. In this case, I am very much concerned at the sheer magnitude of training, education, fiscal awareness that is lost on this generation. This is not an insult. It is a reality.
Many years ago, when all of the advertising from the tech sector was shifting towards making everything quicker, easier, zero effort, as it comes to transacting, a warning light went off in my head. Sure, I am in crypto, so I know we need to improve the ancient, let's say primitive architecture of the banking industry, speed things up, making them cheaper, widen their access to the world. But, there also needs to be an awareness that there is an intrinsic COST to things represented in money.
We, in crypto, spend so much time talking of the evils of fiat and centralized authority, that we forget that there is actually value in fiat. Yeah, I know, you can't see it, but I am wearing a tomato-proof mask and don't even care about dodging the fruit and vegetable lobby. You cannot tell me that the majority of the kids on Robinhood are buying their stonks and dogs with something other than digital representations of the dollars they have recorded in their bank ledgers. What else does RH accept other than bank-deposited fiat? For the few million newbies who helped pump the market up to a $63K Bitcoin, much of that was done in the PayPal app and funds transferred from PP to Binance.US.
"Yeah, but you can earn it, you can mine it". Yes, there are other ways, many other ways you can get your hands on crypto. But, for the other 99.999% of what is happening in reality, not in your gigachad-like roid-rage arguments on Reddit, fiat is buying crypto positions. Perhaps as the online gig-economy sites allow more and more crypto as payments, we will see more people living off of crypto, which sounds cool, except then I beg to ask what a person values more, their leveraging the value of their prized assets, or being able to prove a use case for crypto? Would you rather have more Doge and Bitcoin or prove that you can live off if it? Because there will always be more Doge and dollars, but only 21M BTC.
Do I digress?
I don't think so. The thing about NFT's, is that on an artistic level, I love that it is an avenue for artists to get discovered, and if a little is overpaid for raw talent, it wouldn't be the first time. But, I also think the level of irony is a little too hard to miss, so... why does everyone seem to miss it?
See, the actual underlying technology that got us all here is bit-torrenting, and the guys that got it here were Napster. They were cleverly spread across multiple places, using server strategies that place zero legal responsibility on their property, with files spread across a network in such a manner that no single individual anonymous account could be blamed for the blatant theft that was taking place. The fact that we advanced into a store of value similar to e-money is an improvement, and believe me, I'm not knocking any of it. I COME from the music industry. I KNOW the tyranny that people wanted to knock down. It wouldn't have been terrible for them to actually consider the artists and songwriters they accidentally targeted instead of the record labels, but that's another story. I tell you the truth, the real target should have been the distributors, and now they were the first in line to figure out translating ship-ables to the internet while the labels took years to catch up. Now, publishers and digital distribution is more powerful than the labels that were the target of the Nap-attack.
The underlying pirate-bay, bit-torrent "stick it to the man" nostalgia meant that if we dislike our nemesis enough, it is robinhood-like to take from the evil rich and distribute evenly among the lofty poor. The plebs. So, is it just a little 'bit' more than ironic that our actions got us a whole lotta stuff for free on the internet, and now we want to rebel against freemium economics by over-paying for that one thing we really appreciate?
I fear that the generation doing a lot of over-spending really, truly, sincerely, is directing their angst at something, but they truly don't understand what it is. But, usually the monster that deserves slaying is the one messaging for them to spend. I seem to find myself making similar warnings often. Maybe there's a bit of a vision of what comes next that comes from knowing a lot about what used to be. The internet as I see it right now, is in the middle of multiple seismic shifts that are going to self-correct in some massively unwanted ways.
We're going to get a lot of the regulation that many idiots in crypto have been begging for, and that will be the first phase of "dangit, wish I saw THAT one coming" woopsies that mean kyc for all wallets and a lot of "fund green initiative" crap to follow. I want free decentralized munny and I want it now!... with all of these rules from authoritative sources that dictate the justice-ish right ways to protect me having freedom... It doesn't work that way.
When the young start messaging the establishment that they are willing to over-pay for goods in games, goods in digital art, things that represent iconic micro-moments in history like videos or tweets, it is the signal to lay on thick the brainwashing marketing for all things NFT, and on the other side of it, we see a giga-fad in place of giga-chad, and the roid-like cool becomes the meme-like drool of a moment that is so classically cringe that unfortunately many are storing up value in things that, given a year or a decade, will make them feel incredibly pawned.
So, why is it that we are a people who want all of our albums, movies, videos and video game downloads instant, and free, but we want to give our life savings to that one cool thing we really want to show our appreciation for? Again, as an artist, I am moved to start placing all of my prints online and NFT-the-bidness out of 'em. Maybe I should. But, I wouldn't sell them for outrageous auction values beyond what I would have expected the real-world version that lands on someone's wall. I'd feel perfectly fine selling 1000 unique paintings online for $1000 each, but selling one $1000 painting for $1M would not sit well with me. That makes me strange, different. But, an equitable deal is only equitable if it is truly fair to both parties. My Mom might think all of my paintings are worth $1M, but she is the only one who should feel that way. And of course, mama's always right, so back off. But seriously, think of the most awesome mega-anthem epic song you love. Did you take it from the internet for free? Or perhaps even worse, buy it for $0.99 in the Apple store? Is it weird that Apple re-invented the single, and became the world's distributor for songs you already stole for free? And, the record label was the bad guy? Sorry, but for all of their sins, they are the ones that booked the studio, bailed the band out when the OD'd, paid $3M to shoot videos, bribe MTV when that was a thing, to book the gigs and pay the truck drivers and gear haulers and roadies. Apple just decided to negotiate licenses through Harry Fox Agency and labels and that's that.
I foresee the next iTunes right around the corner, and the next thing after NFT after that. My biggest concern is first, imaginary money can be made so easy, so effortless, that a person forgets an effort should be going in to the cost of acquisition. Working hard towards something is being trained away, dismissed as a thing of the past. You do realize the robots are coming not just for the jobs, but for the opportunities, for the art and individuality as well, right?
Money is defined as something of value because we all agree to use it to trade our label or other tangible values, for something else we want or need. You've been duped if you have learned so much about game theory, that you truly think money is just a game we play, and that everything is merely conceptual. Until we are given totally over to a UBI, and everyone suddenly realizes that without work or true investments, there is no more 'extra' imaginary money to buy NFT's with, money is a basis for value, either intellectual labor or physical. NFT's are a means to show patronage and to prove the validity of something famous, iconic or collectible, but it is a field that has very little basis for what that value should be.
The likelihood that the piece of digital art you spent $10,000 for is going to be worth the same as the top cryptocurrencies you may have paid with, as both appreciate side by side, is yet to be seen. But, it is a market that booms out of the fad of interest, not born out of the value of the actual underlying asset. There is a good chance that at the end of the day, you own the marker point on the imaginary ledger that says something is yours, but the only actual value you can leverage in that, is being able to tell people it is yours. A lot of people own stars named after them. There will always be more stars than people. Just a thought.
But, truly, the irony is that we have a strange way of showing appreciation, and a depreciating way of showing patronage. We want what we want, and digital allows us to get it for free, but if we like it enough for principled reasons, we would much rather radically overpay for that one thing, partly in thinking the ownership is what makes it a valuable asset, and if it appreciates later, someone else will want it for 10X the price. I truly do not think that the majority of the NFT market works that way, but the future will tell. Truly rare, momentous items will find value and hold some of it, but will it operate to the same concept of ownership as the Van Gogh's and Picasso's of the past? Perhaps. But, you gotta think there's only one V.G, or Picasso for a reason, right? The truly iconic rise to the top in their time and for decades to follow. Are we the kind of culture that will still reflect on times like this in another decade or two? Hard to say.
My only real point, is that I hope people will give in less to hysteria and trends, and focus more on genuine lasting value. I hope that as it pertains to money, perhaps some of the generosity from years of stealing music and movies can even out to where every once in a while, something placed on the blockchain becomes more like a real decentralization of the rights ownership we all actually need in the artist community. Right now, we have handed the music industry over to Spotify. We have handed the movie rental business over to Netflix (did you know that was given to us as a gift from Enron? Yeah, didn't think so). We have graced the advertising royalty over to Youtube. The list goes on, but you understand. We stuck it to the man, and then gladly paid him $5-10/month to serve us as we so desire. It is a weird, weird, weird, weird world that thinks money is imaginary, and that Napster was a successful revolt.
Invest well. Invest wisely.
Don't spend elaborately what you cannot afford to recover, and even if you reallllllly love someone's art, artists have learned to survive on long term practical audience-building for hundreds of years, and we'll keep going after the NFT craze crashes into place a bit more. There are lessons to learn from history, and one of them is this: there is a balance somewhere in between wanting everything for free and paying a decent price for something of returning value. Reel in the extremes and we will all get more of what we are after.
And on those grandpa-like morsels of mortality, Gordon Freeman, part crypto icon, part unknown warrior for economic good, for now... out.