Right - Click , Save | NFTs and the Forging of Future Societies in the Guise of Art
Original Artwork | HB 2020
From CryptoPunks, Beeple’s record breaking NFT to BoredApeYatchClub and the dramatic merging of the Punks and Apes under the stewardship of Yuga Labs in 2022, this essay is a 5 part series exploring how NFTs are not merely a value creating tool, but a vehicle for building future societies in the guise of art.
Original Text Written in June 2022
PART I
Transition from The Age of Information to The Age of Value — Origins of Crypto Culture
Ina world of NFTs, a picture is not just worth a 1000 words, but a 1000 lines of code. Art has shifted from the object of value, an end state in itself, to becoming a means to an end. Whoever is in control of art, controls our future.
We are now living in a fundamentally different world prior to the use of blockchain technology, in the same way our world was different before the birth of the modern internet in 1983; or before the invention of double-entry bookkeeping system around 1340 AD in northern Italy, a technology that some scholars believe laid the foundations for the western world’s transformation into the current form of capitalism. As a society, we slowly moved away from acquiring wealth in relation to real goods to numbers on electronic databases [1]. What is interesting to consider is that 668 years later, the evolution of this financial system reaches a tipping point and it is in the wake of the collapse of Lehman Brothers in September 2008 that the pseudonymous Satoshi Nakamoto publishes the now historic Bitcoin Whitepaper on October 31st 2008.
The reason I mention these specific points in history is that each of these technologies altered the very core of human societies and it seems we are on the cusp of yet another paradigm shift. If electricity brought us out of the dark ages, then blockchain is poised to be the light that thrusts us into a truly digital era. Some call this integrated future Web 3.0, others the Metaverse or as the founding editor of Wired Magazine, Kevin Kelly calls it — MirrorWorld. Irrespective of its name, the trajectory we are on is bound to be even more disruptive than anything we may have experienced before. In this world, our digital lives will no longer be seen as an add-on to the real, instead it may be more like standing in front of a mirror, where you and your reflection exist simultaneously. Equally.
Like with any new environment formed by new technologies, things appear distorted at first only to get clearer through the rear view mirror as its effects filter through our society. 12 years ago on May 22 2010, Laszlo Hanyecz agreed to pay a fellow crypto enthusiast, Jeremy Sturdivant 10,000 Bitcoins for two Papa John’s pizzas to be delivered to his home. This marked the first ever use of Bitcoin as a mode of payment and the start of the blockchain journey. At the time, one Bitcoin was worth less than a penny ($0,006) and the two pizzas he received cost a mere $25, while he paid 10,000 Bitcoins or roughly $41 for them. As of May 2022, those two pizzas are now worth an unreal and still growing valuation of $300 million at a price of roughly $30,000/BTC.
Yes, I’ll let this sink in for a bit.
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Stepping back again to 2008, the crash was as clear an indication as ever that the global financial system was too centralized and a single point of failure affected millions of people around the world. While there have been many attempts in the past to create cryptographically secure systems to transfer value across a network, the problem thus far has always been about how multiple, independently run computers can reliably agree on a set of common data without double spending or other human faults that may arise[2]. In other words, how do you inject trust into a system, which traditionally is held by legacy gatekeepers? The genius behind Bitcoin, was that it solved this problem through the Nakamoto Consensus (proof of work) in combination with cryptography and other existing computing concepts, proving that digital value can indeed be created, stored and transferred independent of central authority. Fast-forward to 2022 and blockchain has now become the fastest adopted technology in human history, even greater than that of the Internet.
The way I see it, the crypto movement is as a natural (r)evolution to the way our increasingly centralised world has been taking shape since the mid 20th century. At the core of it all lies the question of trust. Who do we trust to guide us into the future — large singular entities or a dispersed collective; humans or a piece of code?
What emerged post World War II was an era of trust placed on centralized institutions, nations, currencies and systems to bring stability and unity in the world. The birth of computer technology and the internet helped accelerate this globalised vision but it also resulted in our everyday lives becoming perpetual information streams, reducing humanity itself into a form of raw material. The information age transformed data into the new oil and the purveyors of data the new kings, further enhancing the concentration of power and wealth that existed in the real world and there was nothing that could be done about it. The result — a rising tide of distrust in the same globalised system, especially in the wake of uncertainty and crisis, that fuelled the search for an alternative decentralised structure.
The quest for trust became a desire for a trust-less system and this is where the promise of blockchain steps in.
In its most utopian counter-cultural form, it seeks the reversal of power and distribution of wealth from the hands of a few with technology acting as the trusted third party in place of the middleman. This enabled key traits that the information age failed to implement to be added on to the digital experience by crypto, but if we think we are on the same continuum as the innovations that preceded it, we are highly mistaken.
The ideas that drove the first digital wave was about a shared vision of connecting the world and spreading knowledge across societies by using the digital interface as a scanner to dematerialize information (Google), experiences (Apple, Spotify, Amazon), and human behaviour (Facebook, Twitter) from the real world rather than trying to replace it. This difference in philosophy is important to keep in mind as we move forward because what the pioneers in the crypto space are offering is a completely different vision of society — one where digital value is created independent of the real world and exists in parallel to it. Bitcoin being the first example of a piece of code that is now regarded as an equally “pristine collateral” compared to real solid gold [3].
In a broader sense, since blockchains are nothing but immutable digital ledgers, what gets recorded on it depends on the problem you are tying to solve. Some focus on storing wealth like Bitcoin, while others like Ethereum use the blockchain to record additional layers of smart contracts to enable entire ecosystems of decentralized applications to flourish [4]. Developed in complete independence, was one such use case that started as a simple question — could a few lines of code be written into smart contracts to prove ownership and add scarcity to a digital image? Unknown to them at the time, what they would end up creating was the archetype of an entirely new form of digital art and the blueprint for Non Fungible Tokens (NFTs). If you still haven’t guessed, they are the creators of CryptoPunks, but more on them a little later. The key message here is that once digital trust is established, it paves way to a whole new world of possibilities unlocking value across previously unquantifiable digital assets and actions, fundamentally changing the architecture in which we interact digitally.
We have now officially begun our transition into the age of value.
As we move further into the 21st century, it seems fair to assume that the end goal of all technological innovation is the total digitization of human experiences. This means that those in control of technology will increasingly determine the nature of our digital lives and therefore our everyday lives in general. What makes this proposition different from the past is that blockchain is designed to cut and paste the very core of human qualities such as trust, money, ownership, and how societies form around these beliefs from the real world to the digital. Where in the past new technologies empowered centralised control, the tools emerging out of the blockchain space are designed to rebalance power, in this case away form the state, legacy institutions and private enterprises towards decentralised ecosystems and communities. This is exactly what we see happening within the larger spectrum of Decentralized Finance (DeFi), Decentralized Autonomous Organizations (DAO), Central Bank Digital Currencies (CBDC), Stable Coins and other crypto innovations — all vying to redesign the existing cultural, financial, geographical, governance and digital structures of the world.
However, if history is anything to go by, only time will tell if the very environment blockchain is trying to escape consumes the vision that gave birth to this technology in the first place. For example, if Facebook’s recent rebranding to shift focus to building their Metaverse ends up being successful, or if States like China take control of this technology, it would represent, the biggest antithesis to everything that crypto as an ideology stands for.
What’s brewing is not just a new technological environment, but an ideological tug-of-war to (re)establish power to determine who sets the premise for future of human societies. In this global shuffle, blockchain technology and more specially for the purposes of this essay, NFTs, could prove to be a powerful tool in the hands of those who decide to wield its true potential. What CryptoPunks spawned was not only a digital art market of a million NFTs, but also clusters of borderless communities with their own set of beliefs, ideals and vision of the future.
How these communities will continue to evolve in relation to our existing structures is up for debate, but here is something to ponder — human beings once belonged to tribes, then kingdoms and colonies, and now we are a society of nation-states. We are bound to, at some point, morph into a new form of human organisation. Considering how fragile trust is in our current system coupled with how there is now a digital alternative, and that the generations to come would soon not know a world without blockchain, perhaps this is how our migration into the digital realm begins.
It is within this macro context and underlying ideology driving crypto culture that we need to keep in mind when confronted with NFTs. To look at them purely as an evolution in digital file formats, as many people do by comparing them to JPEGs, is missing the point entirely. NFTs have opened the door to a new era of artistic practice, shattering an invisible veil that has long separated art and society.
In order to understand why they are a different breed altogether, in the next part I take a few steps back to the genesis of the digital revolution that gave birth to digital art as we know it today.
References & Further Reading:
[1] ‘A Brief History of Ledgers’ LLFOURN, Medium, February 15, 2018
[3] Introduction to the Exponential Age, Raul Pal, Real Vision Finance, 2021
[4] ‘Blockchain Technology Overview’ (PDF) National Institute of Standards and Technology, January 2018
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Part II
CryptoPunks and Digital Value — Why NFTs Are Not the Same as JPEGs
Now that we have established that a new environment is being formed in front of us, just as in life, the effects of a transition into the age of value has also seeped into the art world. We begin our NFT journey with CryptoPunks — now considered a classic, they are the link that ties the past with the future of art.
Launched in 2017 by John Watkinson and Matt Hall under their studio, Larva Labs, CryptoPunks are a collection of 10,000 algorithmically generated 24x24, 8-bit-style pixel art images, each with their own unique combination of randomly generated characters. They were inspired by a form of digital art known as generative art, where the artist intentionally transfers a portion of creative control to chance and randomness of code. Imagine having an array of different attributes laid out under a pre determined set of categories — Face Shape, Main Accessory, Background, Hair Style, etc such that when one feature from each category is composited together, the final result is a complete rendered image or a ‘Punk’. This way, once the ingredients are fed into the computer program, the algorithm can mix-and-match them to create an almost infinite amount of possible outcomes or variations of Punks.
In total there are 6,039 male Punks and 3,840 female Punks with traits such as 696 wearing hot lipstick, 286 Punks with 3-D glasses, 128 rosy-cheeked Punks, 94 Punks with pigtails, 78 Punks with buck teeth and 44 beanie-wearing Punks. There are also eight Punks with no distinctive features at all — sometimes referred to as Genesis Punks — and only one with seven attributes: CryptoPunk 8348 a big bearded, bucktoothed, cigarette-smoking Punk with an earring and a mole, wearing classic shades and a top hat. Source: Christies
This approach to art making, can be traced back to some of the earliest forms of digital art that emerged in the 1960’s where artists began concerning themselves not only with final form of the art object, but also became deeply engaged with the creative use of the underlying code and computer technology as an essential part of the artwork. While it may seem like CryptoPunks are merely an extension of this lineage, the fact that they exist as NFTs and not a JPEG or any previous file format, makes them an entirely different kind of digital artwork. To understand why, we need to look at the underlying philosophies that drove the formation of these formats in the first place.
As Christiane Paul, one of the leading commentators on digital art points out, the origins of digital media files we are all familiar with were born out of computer technology whose defining ideology can be traced all the way to a single article published in 1945 by Vannevar Bush, a prominent American engineer and scientist. In it he called upon his fellow peers when the fighting has ceased post World War II to “turn to the massive task of making more accessible our bewildering store of knowledge.” He envisioned, in his own words, “a future device … in which an individual stores all his books, records, and communications, and which is mechanized so that it may be consulted with exceeding speed and flexibility… an enlarged intimate supplement to his memory.”
This device, The Memex, never got built but is now commonly acknowledged as a conceptual forebear to the Internet as a world wide web of accessible databases. In 1946, the University of Pennsylvania presented the world’s first digital computer, known as ENIAC (Electronic Numerical Integrator and Computer), and five years later, the first commercially available digital computer, UNIVAC, was patented. It wasn’t until the creation of the graphical user interface in the late 1960’s, popularized by the Macintosh, that linked a physical mouse to a two-dimensional grid of pixels on a digital screen that computer technology and culture took another step forward [1].
The philosophy behind technological innovation during this era was about spreading knowledge and connecting humanity, which gave birth to the DNA of files that would become ubiquitous with digital art and life, as we know it today. ‘JPEG’, the most universal imaging format of our times came to be in the 1990’s, TIFF, an industry standard in the world of digital photography was invented in 1986, and ‘GIF’, a popular format even today amongst the meme culture of the Internet was invented back in 1987. The rest, as they say, is history.
“Throughout the 1970s and ’80s,…artists increasingly began to experiment with new computer-imaging techniques…[and] digital art evolved into multiple strands of practice[s] that would continue to diversify in the 1990s and 2000s. With the advent of the World Wide Web…, digital art found a new form of expression in net art, which became an umbrella term for numerous forms of artistic explorations of the internet. In the early 2000s, net art entered a new phase when artists began to critically engage with the platforms associated with Web 2.0 and social media, producing work on social networking sites such as Facebook, YouTube, Twitter, and Instagram. As digital technologies became part of the objects surrounding us…and familiarity with the language of the digital continued to grow, artists began to engage in practices that are now referred to as post-digital.”
Christiane Paul, “Histories of the Digital Now”
Today it’s fair to assume that the technologies of the 20th century have dictated our digital experience over the last 30 years so much so that every aspect from art, images, films, music to communication and social behaviour all rely on these native files as the interface between code and representation; digital and real. Technology is so integrated into our daily habits and routines that despite living in the real world, our experiences are more pseudo-digital than ever before. Yet through all this time, very little has changed with regards to the fundamental nature of files that shape our experience. Of course there have been advances in hardware and multiple iterations of formats offering higher quality, better compression algorithms and other such features but at the core their DNA remains the same. The extent of the capability of the medium has been limited to storing, manipulating, transferring, and displaying digital artefacts. In a sense digital culture has been bound by the qualities of these files, just like the laws of physics bind us to a specific experience of life. That is, until the invention of NFTs in 2014.
Evolution of Digital File Formats
NFTs represent a hard fork in the history of digital art in the same way computer technology of the 1960’s helped to create the medium in the first place generating a split of its own away from traditional fine art. Unlike previous iterations of digital art, a NFT contains all the qualities of a JPEG in addition to layers of programmable characteristics that can be written onto it. For example a common attribute with NFTs today is the ability for the creator to include a sell on royalty attached to the artwork that lives on in perpetuity. This means that where once artists could never benefit from the resale of their work in the secondary market, they now can with smart contracts that execute automatically with zero friction.
Coming back to CryptoPunks, what John Watkinson and Matt Hall were seeking was not another form of visual representation but a way create an ecosystem around their collection of digital characters that would mimic qualities of uniqueness and desirability found amongst real physical collectibles and trading cards [2]. Generative art allowed them to create visually distinct images, but there was still the problem of infinite replication associated with digital art at the time. We have to remember, the files that were in existence were not made to be scarce, instead they were designed to be deployed en mass to meet the needs of pioneers such as Bill Gates and Steve Jobs who were looking to bring computers into every household. NFTs on the other hand, embody a completely different philosophy to its earlier ancestors and are a byproduct of crypto-technologists like Vitalik Buterin who envision a future where we take back control of our digital actions by making programability, trust and value native characteristics of the digital experience.
Therefore, by making CryptoPunks NFTs, they were able to break the technological barrier associated with digital files by ingraining layers of scarcity and ownership into them. While they were initially created to act as unique pieces of art, they soon replaced the circular placeholders meant to display your identity on social media platforms. For some it was a way to reveal their inner identity and beliefs based on what the Punks stood for, and for others it became a way to protect their identity and remain pseudonymous, only to be known to the world by their avatar (Punk 6529).
‘Art as Identity’ became the first use case for NFTs.
This trend quickly spread across the ecosystem, igniting the NFT boom, as new creators observed how CryptoPunks were becoming a digital symbol of status and perhaps even resistance. After all, Punks are by nature counter-cultural, echoing the blockchain philosophy. Over time as the value kept soaring, and more celebrities like Snoop Dogg, Logan Paul, Jay Z began displaying their punks, the desire to own one kept increasing. Originally given away for free for anyone to claim, today a single CryptoPunk trades anywhere from $1 Million to $23 Million in the secondary market [3]. Their value experiment clearly worked.
Jay-Z displaying his CryptoPunk avatar as his twitter profile picture
The contribution the first wave of NFTs like CryptoPunks made to the blockchain movement transcends boundaries since in essence what they popularised was a way to value culture by transforming it into a scarce asset. Due to the programmable nature of NFTs, what this revealed was that in reality digital value can be linked to anything from carbon credits, event tickets, property rights, collectibles, historical paintings to digital identity, a financial product or anything that needs to be unique.
In the future, I believe all assets, human and non-human, will have a one to one digital replica in the form of NFTs, with art currently acting as the proof of concept or a gentrification tool for the use of NFTs across a wider scope of objects. In other words, NFTs will form the basis of value in the digital world and can be seen as a form of currency, echoing a futuristic version of the barter system of the past. Holding a NFT will be like holding a technologically enhanced mirror image of a scarce asset in the real world.
While the limits of a JPEG have been reached, new links have been forged between art and the larger digital ecosystem through NFTs, exponentially expanding what can be done with the medium. This is where we see the biggest deviation between the two formats and yet in my opinion it is not the only aspect that makes NFTs unique. As we shall explore with Beeple and Bored Ape Yacht Club in parts III and IV, what has become apparent over time is that the value of NFTs are directly linked to the strength of their communities and act more like malleable tools for community building rather than a distribution tool such as a JPEG. Unknown to John Watkinson and Matt Hall, what they would unleash was not just a framework to create value, but a way to bring people together in the guise of art. This is where I believe the truly (r)evolutionary trait of this new genre lies.
As the visionary media theorist, Marshall McLuhan would say, “the medium is the message”. In the case of NFTs, the medium is not necessarily art, but community. As for the message — it is being written as we speak. If indeed we are in an age of post-digital art, and NFTs are anything to go by, the next frontier is not about evolving beyond the digital but weaving itself deeper into it. We are now living through a transformation similar to what JPEGs and other computer imaging techniques did for the medium in the early days, however this time they are supercharged with qualities beyond pure aesthetics. Its real power will emerge when it begins interacting with other components currently being built within the Web 3.0 ecosystem unlocking the true value of these digital assets.
To elaborate on this idea, in the next part we begin by looking at how value is generated in the the digital art market to get a grasp of the fundamentals and how NFTs have changed this relationship. We then turn our attention to the story surrounding digital artist, Mike Winkelmann, aka Beeple and his $69 Million NFT sale to make sense of the exorbitant price tag to understand where real value lies in the digital age.
References & Further Reading:
[1] Christiane Paul, “Histories of the Digital Now”, Whitney Museum of Art, 2018
[2] Sandra Upson, “The 10,000 Faces That Launched an NFT Revolution”, November, 2021
[3] Larva Labs
[4] Marshall McLuhan, “Understanding Media: The Extensions of Man”, 1964
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PART III
Community is Culture; Community is Currency; Community is King
If digital art can be understood as “digital-born, computable art that is created, stored, and distributed via digital technologies and uses the features of these technologies as a medium” [1], then it seems NFTs are poised to distort our understanding altogether as it alters the architecture of the medium itself. As more people begin experimenting with its programable functionality, the more intertwined and complex the ideas are becoming and the more we are realizing what NFTs can do. As we saw in Part II, it isn’t another hardware or software upgrade like in the past; in fact it has nothing to do with aesthetics, speed or performance. It comes down to digital value — how it is generated and inter-connected, where it is placed and what it empowers in the emerging digital landscape.
First Ever NFT — Kevin McCoy, Quantum, sold in an auction in 2021 for $1.4 Million. Image Courtesy of Sotheby’s
From the creation of the first ever NFT in 2014 to the sale of Beeple’s NFT for $69 Million in 2021, it has already generated the most expensive piece of a digital artwork ever sold. To put it in perspective, NFTs have only existed for 7 years and the medium of digital art has existed for over 60. If nothing else, what is clear is that NFTs have distorted the traditional relationship between art and value, which in the pre blockchain era mirrored that of the larger art market.
There has always been a fundamental layer of trust placed on the artist to control supply and provide proof of ownership, which together create scarcity and add value to the artwork. This element of trust is only accentuated in digital art, which in reality could be copied and sold infinitely if desired. In essence, prior to blockchain technology, what you owned when buying a digital work of art was not necessarily the file, but a certificate of authenticity that points to the legitimacy of your file versus all its copies. The artwork is independent of ownership and as we can imagine, if one can get hold of the file, it’s much easier to forge a certificate of authenticity to prove ownership than forging the art itself.
What NFTs do is transfer trust away from the artist (certificate of authenticity) onto a digital public ledger (blockchain) whose record is immutable and whose trail can be openly traced by anyone. In this new digital environment being shaped as we speak, only those files that are recorded would appear real and the rest would cease to exist, thereby creating digital scarcity. In this sense, the uploaded (minted) file along with the creator of the work and the associated owner, which gets updated every time the artwork changes hands, and are now generated together for the world to see. From here on out its authenticity, supply and ownership are “set in stone”, so to speak, or should I say “set on chain”.
Just like one studies the chemical make up of paint and canvas to determine the age and authenticity of an old painting, a new and more efficient digital system to trace the provenance of art is now established. For this reason alone I suspect that every piece of art sold in the future, should and probably will be recorded on the blockchain as a NFT, irrespective of its medium. For digital art in particular, this ability to make a file truly unique and traceable is undoubtedly a huge leap forward, but is it enough of a reason to generate a $69 Million valuation for a single art object? Yes, there is a healthy dose of speculation enabled by the newly formed foundations of economics and trust, but there is also something bigger at play that is accelerating value in the new digital world.
Beeple, Everydays — The First 5000 Days. Image Courtesy of Christie’s
To give some background, Beeple’s NFT titled ‘Everydays: The First 5000 Days’, was originally purchased in March 2021 at a Christies auction by two technologists who go by their pseudonyms, Metakovan and Twobadour, who collaborated with Beeple to bundle 5000 digital paintings into a single NFT specially designed for this sale. In December 2020, a few months before making the record breaking purchase, they acquired another series of twenty first edition pieces of Beeple artworks for $2.2 million. All of these works were bought through their crypto investment fund, the ‘Metapurse Fund’, which was set up to invest in digital assets — from art, unique collectibles to virtual real-estate. In their own words, “Metapurse’s mission is to democratize access and ownership to highly sought-after artwork and accelerate the cultural Renaissance that is happening within the metaverse.” [2]
With this vision in mind, in Jan 2021 they used Beeple’s twenty 1/1 works acquired in 2020 along with other NFTs and digital assets, and bundled them together (not including the $69 Million artwork) into the B.20 project. The goal — to launch a B20 crypto token to fractionalize ownership of artwork that would traditionally be beyond the grasp of the average person to own. As part of the project, they built virtual museums across multiple Metaverses in CryptoVoxels, Decentraland, and Somnium Space where all the art within the B.20 bundle are displayed and can be accessed by holders of the B20 token. In addition, these plots of land and the museum themselves are packaged into the B.20 bundle, so by buying B20 tokens, you not only are a part owner of art worth millions of dollars but also part owner of the museum itself.
“Imagine being able to not only own some of the art in the MoMA, but also a piece of the MoMA museum itself and the land it sits on. Visitors and viewers would become shareholders. This novel type of art experience infused with art ownership is exactly what we did with the B20 token.”
B.20 Museum, Decentraland. Image Courtesy Voxel Architects
So what does all of this have to do with the $69 Million valuation of a work that’s not even included in this project? Well, once they launched their B.20 project, they needed a catalyst that would take it mainstream and Beeple’s Everydays was just that. One caveat we need to acknowledge about the price before moving on is that since the work was purchased completely using Ether, it cannot be directly compared to historical fiat currency based art market valuations. Moreover the price itself was set by the buyers who were also involved in the making of the NFT further complicating this equation.
That said, if for a moment we look at the artwork in isolation consisting of a mosaic of 5000 digital paintings he created over 13 years at a value of $69,346,250, then each individual piece amounts to $13,869.25. This now seems very reasonable compared to single artworks auctioned off for millions in the past such as Andreas Gursky’s Rhine II, which was sold for $4.3 Million at a Christie’s auction in 2011. In fact, it wasn’t even the most expensive artwork sold in 2021, with that accolade still belonging to the master himself — Picasso.
Moreover, from a purely art making perspective, his internet-fuelled digital paintings comprising of classic traits such as speed, repetition, satire and meme culture, seem more like a reflection of computer technology of the past than of blockchain technology of the future.
Endgame, 6-Jan-21 (Left), Kim Jong Jackson, 17-Oct-20 (right). Images Courtesy of Beeple.
This is not to devalue Beeple’s work in anyway; the mere fact that he was able to consistently produce images every single day for such a long period is by itself remarkable — it is to show that the price tag in relation to the art object still doesn’t seem to add up. For this reason it could be easy to see NFTs as pure hype, but those who are fast to judge the book by its cover are missing the crypto-component of the artwork. To continue with the metaphor, value isn’t just in the cover image or the content of the book, but also in the community surrounding it.
If JPEGs are synonymous with infinite replication, then the equivalently significant feature of NFTs are community.
In this new environment, community is culture; community is currency; and community is king. This premise can be applied all across the crypto space from buying meme tokens, trading NFTs to investing in companies, where the strongest communities tend to outperform others through the power of network effects. This is the same force that powers some of the largest companies today like Amazon, Alibaba, Uber, Snapchat, Twitter, LinkedIn, etc whose value largely derives from the network of users, without which its content and platform (cover image) would be meaningless.
Being technologists, Metakovan and Twobadour clearly understood this and what better way to propel their B20 community by investing in an artist who already had a 2 Million strong and engaged social audience for them to harness. They strategically chose to invest in Beeple’s work, not merely because of its visual quality but because his community, arguably a mirror image of his counter-cultural ideology, matched their own beliefs and vision of the future they were trying to build through their B.20 project. Unlike in the past, where the power of communities surrounding the artist was limited to influencing narratives and perception, by investing in the B20 token they can now participate in a real economic sense and not only derive value from it, but drive it.
Why Beeple? Why plan for weeks and endure nerve-wracking bidding? Why spend over $2.2 million?…First, we feel strongly that Beeple’s entry into the crypto art world is an accelerant for the entire NFT ecosystem. It isn’t just the numbers alone, though they are massive: consider Beeple’s 1.7 million Instagram followers…”
This is perhaps what they were hoping for and from this perspective, their eye-catching bid can be explained as a $69 million marketing campaign, no different from Spotify’s $310 Million sponsorship deal with FC Barcelona, to spread awareness, create hype and increase the perceived value of their B.20 project and token. It is not an attack on their approach, but this ability to creatively garner attention to build community is a core part of the crypto playbook, and in that they succeeded beyond belief. This work alone has done more in shaping the perception of NFTs than anything else so far. However, it isn’t the price and content, but the larger change in dynamics between digital art, culture, and value that it reveals, which we need to be focused on. In a nutshell, blockchain has opened the doors for art to enter the world of speculation and finance by allowing people to capitalize on popular culture of our times.
Would the artwork have generated the same price tag if it was still a JPEG or if Beeple dint have a strong community? Art being subjective, one can never be completely certain, but what is for sure is that the value of the NFT in this instance cannot be disconnected from the role of their B20 token in determining the price. If the Web 2.0 way of valuing digital art is to asses it purely on its visual, historical and monetary merit, the Web 3.0 way is to place value on its utility.
A simple change in digital character form a JPEG to a NFT allowed the artwork to enter a completely new ecosystem that expands what can be done with the same piece of art. The novel experiment of fractional ownership is not an aesthetic exploration, as you would imagine when looking at art in a traditional sense, but a pursuit of adding functional value for the benefit of society. Beeple’s work became the vehicle to fast track Metakovan and Twobadour’s vision to not only democratise and redefine the experience of owning art, but spread their belief that blockchain is built to empower the masses and disrupt the echo chamber of power.
In a broader sense, since NFTs are nothing but blank programmable slates (as we saw in part II), this concept can be applied to any scarce asset in the real world such as a historical painting or real estate, meaning that owning a Picasso or a property in Beverly Hills, which would be nearly unthinkable for most of us is now made possible through NFTs. Anyone can now be a part owner of the asset and be able to partake in the upside of its sale. Spreading this vision of the future to them was worth a $69 million investment, and for those who bought into the B20 token, you would imagine, also share similar beliefs.
By supporting art, they are also supporting an ideology — not just as an investment, a status symbol or an intellectual exercise, but as a tool that generates value and therefore monetary power to materialize their collective world view.
Their scope is currently limited to the digital realm, but if in the future their community grows strong enough and wills it, they could expand their reach into the real world, perhaps even challenging existing institutions and frameworks. For now, their project may not be going as planned, but irrespective of how this story unfolds, what is clear is if NFTs were a book, we are still writing its preface. If CryptoPunks demonstrated that value can be created out of a digital image, then Beeple’s ‘Everydays’ shows how value has now shifted from the object towards the community surrounding the artwork. The first real chapter will be about how these communities are activated, to what end and who controls them.
Finally we arrive at the crux of this essay. Now that we have established the value of communities in the world of NFTs, in part IV I bring us back to the present. It’s 2022 and the Punks and Apes, two of the largest NFT collections, have merged under the stewardship of a single entity — Yuga Labs. I expand our scope by looking into Bored Ape Yacht Club and the ecosystem they are building to explore how NFTs have the potential to reshape the fabric of digital societies throwing art and creativity right into the heart of the digital revolution.
References & Further Reading:
[1] Christiane Paul, “Histories of the Digital Now”, Whitney Museum of Art, 2018
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PART IV
An Expanded Concept of Art — NFTs as a Future Society Tool
There have been many movements in the history of art that have attempted to influence our world beyond the gallery walls. None however have been in possession of a medium that cuts through the very fabric of society like NFTs, distributing the power of art beyond artists and into the hands of everyone. As we saw in part III, the collaboration between Beeple and the B.20 project shows us that you don’t even need to be a creator to make use of this feature. You can simply buy into the artist’s community and use that as a base to further your own cause.
Of course the role of art in injecting trust is not a new trend. Countless brands, institutions and even countries have consistently leveraged artists and culturally significant personalities in the past, but the difference here is that it is not large teams of centralised actors with access to legacy finance making astute marketing decisions to sell an obvious product or agenda. Its two technologists and an artist harnessing the potential for decentralisation in the hope of redistributing wealth and competing with institutions such as the MoMA — at least this was their vision of intent.
We are entering a new era of art as ‘social sculpture’. This was a theory developed by the influential German artist, Joseph Beuys in the 1970’s, based on a simple idea that everything is art and everyone has the potential to be an artist [1]. He believed that life is a social sculpture that everyone helps to shape and therefore saw art as a potential medium that brought together an aesthetic practice along with views of an idealistic utopian society. While he spent his lifetime experimenting with this idea, given the technological restraints of his time, there was no medium that would enable the public to participate en masse in such a practice. Today however, things are different. The Internet has allowed for mass coordination of activities for social and political change and now with the evolution of NFTs it has brought his notion of “everyone is an artist” to a literal sense.
An example of someone who intuitively grasped this would be Gary Vaynerchuk, an entrepreneur and a social media guru, who would not be considered an artist in any traditional sense, but makes use of NFTs to bring value to his existing 11 Million strong social community in a way that could not be done in the past.
Rare Robot (left), Eager Eagle (middle), Accountable Ant (right). Image Source — VeeFriends NFT Collection
In 2021, he launched VeeFriends, which is a collection of 10,255 NFTs based on one of 268 hand drawn characters by Vaynerchuk. Its main value derives not from artistic merit, but from the NFTs having different levels of rarity, collectability and benefits that come associated with it. For example, some NFTs are valuable simply because they are limited in quantity within the collection, while others create value by granting access to real life experiences and even personal one-on-one access to Gary Vaynercuk himself. To date, the initial VeeFriends collection has generated around 50,000 ETH in volume traded, which means that nearly $160 million of real value has exchanged hands in less than a year. This may seem like a lot, but most of the biggest NFT collections that follow a similar framework such as CryptoPunks, Bored Ape Yacht Club, WorldofWomen and CryptoKitties, all show equal or greater levels of economic activity.
What we are seeing now is the birth of an expanded concept of art taking shape with NFTs acting like the monetary bridge between culture, art and society.
If in the future any of these NFT collections, individuals like Gary Vaynerchuk, or anyone who has amassed a sizeable community for that matter, issues a token similar to BTC or ETH, then what we would have are essentially mini economies with their own currency, natural resources (NFTs, virtual land, etc) and citizens mirroring nation-states of the real world and therefore in direct competition with them. This is why Facebook’s attempt to create their own digital currency — Libra — was blocked by the US State because that would have made Facebook the largest country in the world with 2.8 billion people already connected to the network. Just for context, this is roughly the equivalent of India and China’s population combined.
Image Source — Twitter
Traditional state institutions have so far been able to govern these structures acting as gatekeepers of nation building but what the age of value is offering is a digital alternative to geographically bound nation-states. Balaji Srinivasan, an angel investor, entrepreneur and former the CTO of Coinbase, calls this next frontier “The Network State”. In this scenario, there is a fundamental shift in human organization from geography to beliefs which usually begins with communities forming online and eventually growing large enough to facilitate collective bargaining with existing governments in the real world [2].
The power of Silicon Valley and the persistence of the crypto movement is a testament to this framework, since Facebook, Twitter, Bitcoin and Ethereum all essentially started of as small online communities, whose ideas, technology and size now directly threaten the status quo. The interesting thing is that while the direct threat to the current centralized world order is more obvious when it comes from large tech companies and ideologies, it’s less so when they begin as NFTs.
The cartoonish, pixelated and gamified nature of NFTs are like the ‘cookies’ of the Internet — their innocence distorts their true nature.
What we have to remember is that at the heart of all of these NFTs are clusters of individuals who have already opted into their respective ecosystems by owning the native digital asset — think of them as the founding members of a society.
Now imagine going back to the time when your country was formed. What brought the first wave of people together was a shared vision to build a future, usually in revolution of what preceded it or as an evolution of an existing way of life. Instead of NFTs, it was natural resources of the real world such as land and other scarce assets that attracted them. Those in control of these native assets, end up in control of the society — call them the founding fathers of a nation.
To seal their legitimacy all they now need is a flag. Not to worry, NFTs are like flags too. Instead of having one flag to represent all its citizens, there are multiple flags that represent a single community, usually identifiable by a unified aesthetic that ties a collection together. The nature of the art often reflects the ideology of the community, perhaps more accurately than a traditional flag ever will. As you can see by the gallery of Crypto Citizens (below), you can almost imagine who the inhabitants of this society are.
Crypto Citizens — an ongoing generative portrait collection of 10,000 NFTs whose inspiration comes from the cities in which they are minted. Each one is an equal member of the Bright Moments DAO. Image Source — Bright Moments
Finally, unlike legacy flags, which have no inherent value, NFTs are themselves programmable assets, which means they are also your insurance card, ID card, passport, driving licence all wrapped into one. I don’t think even Joseph Beuys could have imagined how closely linked art and society would become when he first conceptualised life as a social sculpture.
If we are to expand our view beyond art, the current NFT landscape is more like an ongoing experiment on how to form societies around a certain set of beliefs and generate economic value in the digital world using fundamental features of any productive society in the real world — a set ideology, trust, and the economics of demand and supply. This is why I believe we may see NFTs slip under the radar, eventually emerging as even stronger catalysts for the creation of network states. To explore this further, we need to turn our attention to yet another set of pseudonymous characters in the crypto world — Gargamel, Gordon Goner, Emperor Tomato Ketchup and No Sass. They are the founders of Yuga Labs and creators of the Bored Ape Yacht Club, a NFT collection whose spiritual lineage, like many others, can be traced back to CryptoPunks.
In April 2021, Yuga Labs released 10,000 Bored Apes, each with its own unique characteristics, which also doubled up as a membership pass to the Bored Ape Yacht Club. What most creators have realised since the birth of NFTs in 2014 is the inescapable link between community and value, and Yuga Labs became masters of community building. Within a year the Apes became the most valuable NFT collection in circulation, surpassing the OG CryptoPunks themselves. One reason for this is, unlike the Punks, which became an unintentional form of digital identity, Yuga Labs designed the Apes to function like one. Where the owners of CryptoPunks can only metaphorically take on their digital avatars, with limited intellectual property rights ingrained into the NFT, the Apes can embody their avatar in any way imaginable as each NFT comes with the full IP rights for the owner to do whatever they want with it. This hints at the difference in objectives and maturity of the NFT market, with the former being closer to the traditional art world and the latter a forerunner in the expanded concept of art we are heading towards.
Bored Ape # 6723 — Snoop Dogg. Also see his Bored Ape Themed Dessert Restaurant —Dr. Bombay’s Sweet Exploration. Image Source — BAYC
On March 11th 2022, in a dramatic turn of events, Yuga Labs acquired the full IP rights from Larva Labs for their historic CryptoPunks and Meetbits collections. Shortly after, on March 16th, they launched their own token ‘ApeCoin’, and finally on April 30th 2022, they released their own metaverse,’Otherside’, to tie their whole ecosystem together. Yuga Labs are now at the helm of some of the most valued digital assets and arguably the strongest communities in crypto. The goal as laid out by them is for ApeCoin to power all aspects of their BAYC ecosystem going forward functioning as a governance and utility token where holders can not only use it to vote on policy changes through the creation of a DAO (Decentralized Autonomous Organization), but also use it to purchase items both in the digital realm and real world [3].
What started of as unique pieces of art that grants you exclusive access to experiences has now morphed into the development of a kind of ‘network state’ with its own system of decentralized governance (ApeCoin DAO), currency (ApeCoin), natural resources (Virtual Land — Otherdeed), native digital assets (BoredApes, CryptoPunks and other NFTs) and a virtual world for their citizens to inhabit. For now, Otherside, which is still under development, is essentially a multiplayer role-playing game where players can own land, transform their NFTs into playable characters and interact with over 10,000 players in real time; however, what if in the future the BAYC community votes for their world to be more than just a gamified metaverse? What if they want it to be a true mirror world to our reality in all its social, economic, political and monetary forms?
Bored Ape # 1294 — Paris Hilton (left), Bored Ape # 1597 — Mark Cuban (middle), Bored Ape # 6633 — Neymar Jr (right). Image Source — BAYC
In terms of a traditional nation state, ‘Otherside’ can be thought of as comprising of highly competent set of leaders or statesman (YugaLabs), a loyal, powerful and highly incentivised set of founding members (Original BAYC NFT holders), an asset rich ecosystem, and a growing community of citizens (ApeCoin holders) belonging to a programmable digital universe. If over time their ecosystem with newly aligned interests flourishes by creating genuine monetary and social value combined with an appreciating currency, it is likely they will soon be competing with real world nations and perhaps eventually garner enough bargaining power to declare themselves an independent society. Arguably one of the most challenging aspects of any new venture, whether its building a brand or a city, is convincing people to adopt your vision of the future and in this sense, NFTs seem like the perfect blueprint to bring people together with similar beliefs. All of this, in the guise of art.
Of course, this is a big IF, but if this kind of experiment ends up being successful, there isn’t much governments can do to stop these decentralized communities from forming since theoretically no single person controls it. They can ban their citizens from participating but cannot ban the ecosystem itself. In this case, would these ‘mirror worlds’ exist within our current centralised system or would they stay true to their decentralised ideology and seek out jurisdictions that allow them to independently exist in parallel?
We could be heading towards a world where we choose our citizenship on entirely new concepts driven by culture rather than traditional factors such as ideology, geography and religion.
In stark contrast to the way our digital landscape operates today, where its the owners of the networks like google and Facebook who primarily profit from the ecosystem, all citizens within this Web 3.0 community would be part owners of their world and therefore share the rewards of all economic activity that takes place within it. Perhaps a tempting alternative for many citizens even today whose nations are imploding as we speak, let alone the next generation who would not know a world without crypto.
Moreover, if the metaverse or some form of it becomes an expanded version of our already pseudo-digital lives, just think about who is building it. It’s not your structural engineers and politicians who are in charge of the infrastructure and ideology anymore, it’s a new hybrid breed of technologists, digital creatives and communities envisioning what the future may look like. It’s not money that’s the sole driver of economic value, it’s a whole host of digital assets traded and exchanged on the open decentralized market that will have an equal place in the system. It’s not concrete and steel that reinforce urban societies, its technologies like blockchain and others to come that are going to shape the new world.
If all of this seems far-fetched, remember this digital landscape is not being designed for baby boomers, millennials and to a certain extent not even for Gen-Z; its first native inhabitants are going to be Generation Alpha. Value is a shifting proposition and it is the needs and desires of this generation and beyond that are going to drive the evolution of NFTs and its place in our world. Mainstream collaborations between BAYC and Adidas as well as other large organisations scrambling to get into the game before they become the next Blackberry, suggests that the new world is already upon us. It is only a matter of time before our favourite sports team, brand, politician, country, and DJ begin tokenising their ecosystem and build their own metaverse to form communities of their own.
While it’s uncertain how this story will unfold, what is fascinating for me in this version of the future is that art and culture will become fundamental to the economic, social, and political magnets that attract people into various communities. In any other earlier iteration of art, its nature would be limited to the extent of its old world features (Part II). NFTs being programmable digital assets, add an expanded layer of possibilities on top of the artwork that allow us to design a whole world around creativity.
Who could have predicted, the fate of human societies could rest on NFTs?
In the next and last of the 5 part essay, I take a macro perspective to bring everything I have explored so far together and leave you with some final thoughts on NFTs and its place in our world.
References & Further Reading:
[1] Joseph Beuys, Social Sculpture, Tate Museum
[2] Balaji S. Srinivasan: The Network State, Foresight Institute Interview
[3] Andrey Sergeenkov, What’s the Story Behind Bored Ape Yacht Club Creator Yuga Labs?, CoinDesk | Langston Thomas, Otherside: Everything to Know About the New BAYC NFT Project, NftNow
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Part V
Who Can We Trust?
The world is in flux and whether we like to accept a more decentralized future or not, it appears to be what those with the most resources are driving towards and the rate of adoption of blockchain technology seems to fit this thesis. Like most of human history so far, it isn’t individuals who are holding the light, but the collective forces of technology and power that have guided us forward.
While the ecosystem needed to maximise the potential of this technology is yet to catch up with the digital dreams of those pioneering it, the fight for power over who sets the premise for the next phase in human evolution is taking place right now. What we must remember is that humanity is not only inventing an alternative realm to inhabit, but also a whole new set of beliefs to govern our digital experience moving forward. As historian and philosopher, Yuval Harari points out in his book, The Sapiens, we cannot discount the power of collective beliefs and common myths like money and god invented by humans of the past, which continue to blend the fabric of large societies together even today. Could decentralization and other concepts emerging out of blockchain and the crypto movement be a part of the new wave of ‘myths’ being invented for the future? If so, whoever ends up in control of the narrative will no doubt shape the nature of our world for centuries to follow.
Today, the fight for power is really the fight for trust (Part I). Unlike in the past, where humanity has relied on centralized systems, blockchain has decentralized the ability to form and sustain societies. It’s not only mainstream actors that are now vying for power, it has opened the door for communities of all forms — technologists, artists, ‘memeists’ — to unite together and realistically compete with existing structures in the digital and physical realm. While it is unlikely that those in power will give it up very easily, in the case of NFTs, a strong underlying ideology nurtured by art and sustained through monetary incentives and crypto tokens seems like a real revolutionary force to reckon with.
The question that remains is, who do we want to place our trust in building the future? If Salvador Dali were alive today and started a country would you move there? What about Elon Musk, or Roger Federer? How about the worlds of Nike or Gucci? Or perhaps the Dalai Lama’s realm is where you truly belong.
It is easy to write off NFTs as hype but the distortions we are seeing today are similar to the early days of Bitcoin or even the early days of digital art where the medium is confined to those who are not only curious about new technologies but also have access to them. The fact that the traditional art world still hasn’t entered the NFT space yet is the reason why most of the art produced on this medium doesn’t resemble art in a way that comfortably fits in a box. Moreover, since access to buying NFTs is also limited to only those who own crypto currency, its aesthetics and price are primarily being driven from within crypto culture using one of its most central features — the community (Part III). This explains some of the biggest NFT projects so far all deriving from the need to economically activate a community rather than create art for art’s sake in a more traditional sense.
Additionally, there is also the question of what do you do with the art that you own? Even if you consider all NFTs as pure speculation, as a technology it has already solved the problem of digital scarcity and authenticity, two critical features that were lacking in the pre-blockchain era and extremely necessary for the future of digital art. For now, its use case may be limited to displaying them on social media or virtual galleries, but as I have mentioned, we don’t live in the old world anymore and NFTs are not JPEGs (Part II). It’s true potential is still unknown and if NFTs are as powerful as I think, then a new era of artistic renaissance is upon us (Part IV).
There have been numerous examples of skepticism and sometimes even outright rejection in the history of art where new forms of expression take years to filter through society before becoming accepted. Franz Kafka, is one that particularly stands out, who in his day was never taken seriously but is now considered the most influential existentialist writer of the 20th century; so much so that to be “Kafkaesque” has even entered the lexicon of language. This isn’t to say that all NFTs or artists are going to follow the same trajectory as Franz Kafka, but it is to keep our minds open to things that don’t quite make complete sense at first.
To recap, the same JPEG that once sat on your desktop screen, whose intrinsic nature was infinite in supply and limited in function, instantly changes character to a digitally scarce programmable asset whose potential expands beyond aesthetics once minted on chain.
So the next time you see a NFT and think of right clicking and saving the file, know that all you have done is taken a copy of an artwork, walked a few blocks to the nearest print shop, and made another copy of it on a Xerox machine.
On the other hand, who doesn’t love a good piece of art hanging on their bedroom wall?
-x-
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The Animal is Absent is a space dedicated to ideas exploring the effects of technology on humanity.
Harsha Biswajit is a new media visual artist currently living and working in Berlin. With a background in economics and digital fine art, his work primarily explores the changing nature of reality brought about by technological advancements in our society. This theme has run throughout his career and most recently manifested itself in experimenting with and writing about NFTs and Blockchain in general to understand how this new technology is going to shape our future. His works have been exhibited in USA, India, France, Spain and Hong Kong, amongst others.
