“It’s become very clear to us over the past few days that NFTs may not be the future right now,” one of the hosts of the Nifty Alpha podcast recently joked. “Well, it’s the future, but not today.”
Nifty Alpha Podcast is a light-hearted and comfortably honest news source for NFT investors. Nifty Nick has done a bit here, but he’s riffing on the bigger truth: The NFT market is dying. The overarching story of the moment is the bleeding out of the major “blue chip” NFT projects, with isolated spikes for this or that project quickly fading away.
We’re about a year and a half into the Great Mainstreaming of the NFTs and a few months into the first NFT winter.
Parts of the NFT universe are so obnoxious – the guys that skeptics tweet “HAVE FUN STAYING POOR”; the influencers pumping up projects they secretly invested in and then cashing out; the endless supply of business hacks that coat the mantle of digital art – that it’s easy to have a lot of glee.
But I don’t really think NFTs will go away. They only mutate under pressure.
People who promote the alternative NFT art world tend to speak out very confidently about the ills of the traditional art world, which is perceived as hoarding economic opportunities that the magic of blockchain technology promises to unlock for all. But it often seems to me that this vision still buys the hype of the traditional art world.
The truth is that anyone who is serious about the art market knows that traditional art is mostly a bad investment. Almost all new artworks are worth zero; Even most art that has its day will be worth nothing a few years later. Only in truly exceptional cases does art radically increase in value over time, and these increases are almost impossible to predict.
The main reason to collect art is because… you really like art or want to support artists. To be fair, I now heard NFT experts say similar things at the recent NFT.NYC conference given the plummeting prices. (Six months earlier, at the previous NFT.NYC, the line read “Who wants to retire in three years?”)
But it remains to be emphasized: “democratizing” the financial possibilities of the art market means, above all, democratizing the ability to lose money with hyper-speculative assets. As Bloomberg reported last year, “a very small group of highly qualified investors derive most of the profits from NFT collecting” — just like in the traditional art market.
And yet…just because most claims about the money-making potential of NFTs turn out to be fog and mirrors to the average person doesn’t mean NFTs will go away; There’s too much money to keep this dream alive. Multi-level marketing outfits like Mary Kay and Herbalife also recruit people with big promises of financial independence that turn out to be largely illusory. These operations have been criticized and sued and investigated as pyramid schemes – but every year new people sign up to become evangelists for their products.
Such programs typically thrive among populations feeling cut off from economic opportunity: Mary Kay among homemakers; Herbalife among immigrants; and crypto and NFTs among young men looking for stagnant real-world opportunities.
The highly engaged digital art day trader audience is truly culturally new, catering to a mass audience of self-proclaimed “degens” (from “degenerate gamer”) unparalleled in the traditional art market. Most NFT projects are definitely bubbles, but the NFT art and collectibles trading ecosystem as a whole is more of a new form of art-themed online gambling. It scratches the same itch as horse racing or sports betting, but for digital natives.
And gambling actually tends to thrive in economically uncertain times. In fact, the emerging field of “crypto addiction” is being treated as a subfield of gambling addiction.
However, there is a slightly less cynical reason to believe that the trade in NFTs will persist, more on the artists’ side than the collectors’ side. The innovation reflects a way of sustaining digital creativity that has proven potentially viable under the foam over the past year. Society is increasingly focusing on digital creativity.
However, I think some of what this means is obscured by the ordinary breathless NFT sales pitch. web3’s proponents sound like they’re pitching the pitch for all the world Silicon Valley for a “new internet” without any satire. You hear a lot about how NFTs will finally liberate culture from the ominous grip of Web 2.0—that is, from the influence of the big platforms that have hijacked most of the profits of the attention economy, your alphabets and your metas.
But as far as I can tell, success in the NFT space is very much based on the same viral dynamic and trending topic addiction that the media has been eroding in the Web 2.0 era. After watching the evolution of the NFT art world for a year and a half, it’s clear that even when a project catches fire, its mid-term value tends to follow the usual curve of viral fame and memes in general: There’s an initial intense conversation piece as everyone tries to jump on a trend that’s getting old fast and fast becoming yesterday’s lunch.
Critics roll their eyes and speak of the absurdity of “buying JPGs”. But even this way of criticizing NFTs inadvertently contains an unhelpful analogy. are collectors Not Buy a digital image (or rather, a token pointing to a digital image) that functions as a “digital object” like a discrete painting. The most engaged NFT audience is looking for a storya hype cycle you can bet on fluctuations in.
It seems to me that this is where a lot of the more traditional artists coming into the NFT space go wrong thinking they’re just “doing an NFT” which is then sold to an audience that keeps it passive. It doesn’t work that way; The people who want to put money into these things are looking for an ongoing narrative to keep the price high. Ongoing commitment is required.
Artist JR got into NFTs last year, which caused a lot of excitement. As can be seen on Discord, his collectors have been apoplectic that he hasn’t abandoned his other art to shill his NFTs more to push the project forward. One angry former fan even recently created a mocking animated version of his famous sunglass face, with JR assuring his NFT owners in a high-pitched cartoon voice, “Hey guys, I haven’t forgotten you guys! I think about you all the time when I fly around the world spending all your money!” Brutal.
JR is one of the most famous, well-connected and media-savvy street performers in the world. If he can’t just sit back and let the NFTs circulate on his own, then neither can any other artist who wants to have something of an ongoing practice in the space.
The tendency for NFT talk to be dominated by large collections of slightly different images stems from the need to have a story. A larger number of linked images means more transactions, which in turn means more potential news events and data points to watch, which in turn means more of a narrative to bet on.
When it comes to “one-of-one” art – the NFT way of saying “one-of-a-kind” artistic images, rather than stacks of digital collectibles like the monkeys or punks – it seems telling that the world’s most famous artist, Beeple, It Did His fame stems from his Everydays project, where he releases a new artwork every day.
Constant attention, constant new stories, that’s what it takes to keep the ball of interest in the air to guarantee a steady drip of interest. So the effect of the NFTization of art is an expansion and tightening of the demands on creative life in the age of social media and the tyranny of algorithm feeding, Not a healthier alternative to it.
Sara Ludy, a successful digital artist from New Mexico, recently spoke to my colleague Tim Schneider for the Art Angle podcast about the future of digital art. She spoke enthusiastically of the huge groundbreaking NFTs being represented for digital artists who are able to get cash for previously ungraded work, as well as artists like herself who are based outside of the geographic art capitals. These are real goods.
But this passage also caught my eye, and I think any artist looking into NFTs should think about it:
I don’t think the NFT space is a healthy space because it requires artists to constantly market and promote themselves. You have to be connected to Discord 24/7 and you’re basically juggling several other aspects of what it means to be an artist and it’s exhausting. Personally, I’m actually on a digital detox and rethinking what it means to have a healthy, sustainable digital practice. That came out of burnout. I can barely open my computer screen right now and was actually struggling with the final work on my show because I was burned out from having to be online all the time.
NFTs may not look like the future right now. They look a lot more like the recent past weighing on the present. I don’t know if I would bet on them being able to escape this.
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