The Nihilism and Exploitation of the NFT Industry
Everybody’s doing NFTs. There’s an NFT supergroup, the Charlotte Hornets are doing NFTs, Hollywood is thinking about NFTs. Non-Fungible Tokens are “unique digital goods” if you squint and otherwise are an environmental hazard built to grift desperate people into believing they hold something of value. I have been over this before - NFTs are a problem created to solve a problem that didn’t exist, publicly described as “the future of everything” without a discussion in plain terms of what makes that statement true.
Malevolent hustle-scammer Gary Vaynerchuk said that they are “the holy grail for humans that will be used for everything” at a Yahoo Finance event, and will be “mundane in 80 years [and] used for everything.” and that he’d be “stunned” if people still used QR codes and paper tickets (which people don’t use anywhere near as much today anyway, but he’s a Jets fan so maybe let’s not trust him on his sports thoughts) instead of NFTs to get into events in 15 years.
Serial entrepreneur Gary Vaynerchuk understands that some people don’t get all the hoopla around non-fungible tokens (NFT) and even some who “think I'm a snake oil salesman” for promoting them.
The reason that people may think he’s a snake-oil salesman, other than his entire history in business and almost every action he takes, is that Vaynerchuk is someone who also sells NFTs that look like total dogshit, yet are pumped to be worth thousands of dollars. If you’re wondering why he’s hyping them, it’s nothing to do with the validity of the concept and everything to do with a soulless ghoul that has found a way to monetize and gouge an audience of willing supplicants that all have bought into his meaningless empire of hot air. Vaynerchuk’s interest and investment in the space should not be seen as a bullish move, but as a big rubber stamp that says “yes, this is only about parting people with their money and absolutely nothing else.”
There are basically two types of views on NFTs:
A Joel Osteen-style evangelist claiming that your intellect and genius brought you to this beautiful industry,
The reason is that there is no fundamental magic behind them - they are unique digital assets that are on a blockchain so that they can’t be edited, and if they’re not on the blockchain, they’re just a unique thing in a database, something that’s already existed forever. The froth around them, and their attachment to the blockchain, entirely exists as a means of heavily monetizing and pumping these assets specifically to enrich people that have only entered into this industry to extract capital from people that are desperate to be “first” to something that has already happened. Just like regular crypto, the only way to actually get rich is to either be insanely lucky or to know about something in advance that’s already set up to be pumped by someone.
NFT zealots will bang on about how NFTs access communities, events, or “exclusive” things, which means that you can join a Discord channel or dance around a sweaty hall with other people who like digital assets. They will say they are the future of “everything,” referring to how “everything” will be tokenized and how NFTs are the future because they are non-fungible, which means that they can’t be changed, which is good, and that means you want them.
I think it’s important to frame this with how bad things are for the average person. Things are more expensive, yet wages aren’t getting higher. People are desperate, angry and have realized that the idea of working a stable job, buying a house, and living a happy life does not happen for most people, and they want something - anything - to drag them out of the hole that they were kicked into at birth.
The NFT industry is just another way rich people have found to enrich themselves by selling people the idea that they too could be rich if only they participated in the scheme that enriched the rich people first. It is a lie of access to capital and fame - this badly-drawn picture of a monkey is worth $500,000 now, so your badly-drawn picture of a lion could be worth $100,000 if you had just spent $5000…or maybe you’re lucky to get in on the “ground floor” of some other NFT thing - which you’re buying for “access” to something, but are really sold on it on the idea of wealth - that you can leave your humdrum life because you were “smart enough” to “get in on the ground floor.”
This is not (as some would have you believe) a situation where in 10 years you’re going to look back and say, “wow, I totally missed that one.” Crypto certainly hasn’t had that moment - other than increasingly-large market caps and people making money off it, what has crypto actually done? What effect on society has it had, other than its ability to generate wealth for the wealthy and arbitrarily make a few others rich? What product has come out of crypto that you use? If crypto was to be entirely eradicated tomorrow, what hole would it leave in the average person’s life unless they’d put money into it?
It’s because crypto does not appear to be a good thing to build things on unless you are trying to do something with money, at which point it is still expensive, convoluted, and ugly. The products that “work” on crypto are all about the exchange and movement of crypto products, and the big promise of “crypto communities” and “games” are clunky messes.
And they are not democratizing anything because it costs so much money to just exist in crypto. Every time you transact on whatever network you’re using to buy them, you’re enriching someone else. Every single time. You should be grateful that it only costs $12 at transaction sometimes. You should also know that “a transaction” includes authorizing your wallet to buy an NFT, buying an NFT, selling an NFT, or even moving an NFT to somewhere else. And this amount is totally random, based on “traffic on the network.”
This is an entire industry built by the wealthy or those aspiring to be wealthy, sold off the back of financial freedom to those who will never experience it. Stories of regular folks that get rich on crypto are chum for the media, but they are the vast minority compared to those who buy into whatever Coinbase launches and get screwed as early investors take this opportunity to dump into the market.
NFTs are the first quasi-mainstream crypto product, and they aren’t good at their core function. NFTs cost money to move, do not exist in real space, do not even necessarily convey ownership, and have potentially huge tax liabilities. This is what crypto was going to do? This is what we got after all of these years? All of these people raised all of this money, and for what? A way to sell low-quality art at scale into a market of people desperate for some way out of the hole that society has dropped them in? A way to monetize the greed and desperation of millions, feeding off of those who think they’re smart enough to beat markets that aren’t simply rigged but designed to be rigged in favour of those who created them?
Those selling the NFT dream are simply hyping their own assets, trying to hope their way into wealth based on the vague promises of people who are already wealthy. The hype cycle feels so empty because there are no signs that this is actually here to stay - there is no plan or product, and people only believe that NFTs will be big because there is so much speculative money flowing into and out of the industry.
I take it back - NFTs are a good product if you consider them a form of capital extraction. They are quick and easy to produce, and if you have a huge social presence and fart one out, you can make real money off of them, like selling merchandise that has a theoretical market value. It’s less greasy (and illegal) to hype an NFT because you can claim it’s “unique art,” and the buyer can say they bought a “one of a kind [insert famous person] thing.” They are a low-risk, high-reward product that is “valuable” that is intrinsically linked to a vague idea of future millions. This value is only increased by social clout, making NFTs naturally rigged towards those who already have fame and fortune. As a capital extraction mechanism, the crypto aspect is brilliant - it’s a natural connection to a speciously valuable industry full of frothy capital and desperation.
The celebrities pushing NFTs do not believe a single word of anything about art or community or any of that. It is a straightforward way of creating capital from fame, the natural endpoint of celebrity sponsorships for toothpaste or car insurance, except they’re not sponsored by anything - you’re just buying “them.”
In the cases where it’s not a famous person selling it, you’re buying into the idea that the thing you bought today will be worth more in the future. To be fair, this is also why some people buy art - but also not the main reason that people buy art. I’d argue that the majority of people investing in NFTs are doing so to appear that they’re “in” with a certain group, or because they believe that whatever the NFT is will be worth an insane amount of money in the future. It is desperate zealotry masquerading as artistic taste and financial acumen, sold to people with varying levels of hopelessness or regret that they “missed out” on something they didn’t buy because it was stupid.
The reason that there’s such a logical gap between NFT zealots and the rest of the world is that there is not actually a real product to speak of. It’s taken the worst parts of art - the fickle definitions of what art is and the random nature of what makes art valuable - and dressed it up as a way of “getting into” art, infused with the soul of every person you’ve known who’s ever said “man you know I coulda bought Google when it was $100!” It is entirely soulless, built on entire communities of naked emperors and their wards telling them how beautiful their outfits are, fueled by the desperate hope that whatever group you’re in will be the one chosen by God to ascend to the ranks of the wealthy.
And corporations see this as an opportunity - while the market is frothy, they are going to get in and drain whatever capital is left before everything falls apart. Barrett-Jackson sold several cars at auction back in March 2021, and then went on to sell several NFTs…of the “digital rights to the sales,” by which I mean three images, an “exclusive video” and an illustration. You don’t even get the rights to the images - just the ownership…of the thing…in the packaging it’s in.
It’s all so empty. There is no meaning here. At its most “real,” the NFT industry is a pass to get into a conference or a Discord, or a chaotic and speculative asset class. It’s frothy because people are desperate to connect and desperate to escape what they fairly perceive is a rigged economic system, which they’re doing by jumping into another rigged economic system sold on even flimsier ideals than the American Dream.
Make no mistake - the constant mentions of “NFT” in your feed or the media are not. because of the validity of the industry, but because of the general confusion about what it is or why it’s valuable. Corporations and celebrities investing in NFTs are not a sign that they’re “having their moment” - they’ve just realized that it’s a way to trick more people out of more money. Whatever good intentions NFT artists may have had are irrelevant to the larger point that the very structure of crypto-based NFTs is evil.
As a reminder, I’m doing an advice column called Here Is My Problem. So send me your workplace problems to firstname.lastname@example.org with the subject “Please Help Me.”