NFTs aren’t thriving – they’re often in the hospital

Photo by Mikhail Nilov on

This is not a real anniversary but it’s worth commemorating, if only to remember the pseudo-events propping up the NFT business-culture. One month and one year ago, a cryptocurrency user named Metakovan purchased an NFT associated with a piece of art from its creator, a fellow named Beeple, in an auction at Christie’s. (Here’s a beginner’s guide to NFTs.) Even at the time this incident took place, its absurdity was clear: as I wrote at the time, Metakovan’s plan – an ostensible effort to democratise and to fight racism in art ownership – was riddled with problems: it was one big red herring of excuses supplied to mask the Ponzi super-scheme that cryptocurrencies and NFTs need to survive. Since then, as NFTs have ‘matured’, especially by revealing what they truly are to the world, we have become better at understanding what that moment in time has meant for the industry. Today, cryptocurrencies and NFTs are investment options whose prices climb up (and down) purely through speculation, so they must remain constantly in demand, thus the Ponzi. Other than that, they serve no purpose whatsoever. While the $69.3 million that Metakovan paid for Beeple’s NFT bleached our vision, we realise today that it had to; there’s nothing underneath. Similarly, there is today a near-constant drone of faux optimism emanating from cryptocurrency evangelists founded on nothing more than greed and stupidity – one that we must constantly look past to remind ourselves that NFTs are ailing, as they should be. Here are some useful articles I would recommend on the topic.

“It isn’t just charities that are finding cryptocurrencies less popular than the media would have you believe. Game publishers were salivating at the prospect of selling NFTs purporting to represent in-game items. Their customer’s reactions led to headlines such as ‘Roller derby community resoundingly rejects NFT project’, ‘MeUndies cancels its NFT underwear plans and sells its Bored Ape after community backlash’, ‘S.T.A.L.K.E.R. 2 developer quickly cancels NFT plans after fan outcry’, ‘Sega cites fan backlash in surprisingly cautious take on gaming NFTs’, ‘Ubisoft’s first NFT experiment was a dumpster fire’, and so on.”

“For cryptocurrency investors and tech workers, they represent financial opportunities and the ground on which to create an art world all of their own. They are deeply naive about art and often disarmingly sincere in their excitement about it. … Is there any potential in this new art market, which seems poised to edge out the old as it is integrated into art fairs, galleries, and auction houses? Is capital, even in its present decrepit form, more progressive than art theory? … Blockchain may be decentralized, but Sotheby’s and Christie’s, where NFT stars like Beeple have been taking their work direct to market, certainly are not. Art-for-NFT may eschew elite curation from MFAs and PhDs but relies instead on other hierarchies that have more to do with celebrity and straightforward access to money than visual quality, let alone conceptual positioning. It has already proven itself not to be the very thing its digital art proponents hoped it would be: an equitable market (as if such a thing exists) cleared of undesirable barriers. To the contrary, the majority of transactions are concentrated in the top 10% of market actors and the average artist has nearly no shot at making a buck…”

“Kelani Nichole, who first priced and sold artworks in bitcoin in 2013 as the owner of the new-media-centric Transfer Gallery, … reached an unequivocal conclusion about Christie’s proclamation that it had made NFT history. … First, multiple users [of cryptocurrencies expressed] confusion over why, as one member put it, they saw “none of the usual stuff you’d expect to see” for an NFT sale through Etherscan, an established portal for viewing verified data on the Ethereum blockchain. … the second point of disagreement is even more existential. On one hand, Christie’s role in facilitating the sale of Beeple’s work was seen as a powerful validation of NFTs by (very) late adopters in the traditional art world. On the other hand, true believers in blockchain’s revolutionary potential aim to eliminate gatekeepers of all types. They saw Christie’s very presence in the sale as a betrayal of crypto’s core values…”

“Forms of self-dealing among an elite are also baked into the market and the history of how it got so big in the first place. Take Vignesh Sundaresan, a collector known as “MetaKovan” who purchased the $69 million Beeple NFT that touched off one of the earliest hype cycles around the digital assets. MetaKovan is the financier of Metapurse, a Singapore-based investment firm that earlier this year listed its mission as to “democratize access and ownership to artwork.” Metapurse has bought 20 Beeple NFTs, four virtual museums, a soundtrack, and consolidated it all into an “NFT bundle” that offers fractionalized ownership through 10 million B20 tokens. Beeple, as it turns out, happens to be a business partner of MetaKovan and owns 2 percent of all B20 tokens, while MetaKovan owns another 59 percent.”

“… Lemercier’s sale of six crypto artworks of Platonic solids late last year consumed more electricity within ten seconds than the entirety of his studio in the last two years. Worse still, with every resale, their footprint will grow: one estimate indicates the mere act of selling an edition of one hundred NFTs consumes more energy than an individual living in the European Union for a year—and there are already more than six hundred thousand NFTs in existence. Though the hype of NFTs will likely burn off, the noxious fumes produced by these ostensibly ethereal works will linger in the atmosphere for decades, if not centuries, to come.”

“Time’s cover story by Andrew R. Chow, The Man Behind Ethereum Is Worried About Crypto’s Future, is supplemented by his I Spent 80 Minutes Inside Vitalik Buterin’s Brain. Here’s What I Learned. What I learned from these two pieces of hagiography was that Buterin is having a lot of difficulty dealing with the failure of Ethereum to live up to the goals he had for it. … The entire story is shot through with the normal cryptocurrency gaslighting, claiming that the benefits Ethereum will bring to the world are because it is decentralized, even though it isn’t. At the fundamental level it isn’t — last November two mining pools controlled the majority of Ethereum mining. At the API level it isn’t, as Moxie Marlinspike describes in ‘My first impressions of web3’. But the detachment from reality goes much further. … The quote “Crypto itself has a lot of dystopian potential if implemented wrong” reveals two of Buterin’s delusions. First, the idea that the dystopian effects of cryptocurrencies are a future potential, not a current reality. And second, that the dystopian effects are merely a symptom of improper implementation, rather than fundamental attributes. Chow reports Buterin’s ideas for cryptocurrencies implemented right: … These utopian dreams fuel the gaslighting that covers up the real-life casino and “wretched hive of scum and villany” that cryptocurrencies have become. The idea that, at some time in the future, the Ethereum ecosystem is “at risk of being overtaken by greed” is laughable to everyone outside the cult.”