The NFT Absurdity Experiment

Has the crypto world lost its mind (again)?

“You’re ruining art! Do you have no respect for the way things are done!?” The sleeves of the old man shuffle as he waves his arms in frustration. 

“This isn’t how art is done. These kids, do they have no respect?” 

He shakes his head and mumbles, “It’s perfect the way it is. I don’t see why that needs to change?”

A young Da Vinci turns his head and says to his pal, “That guy, he’s not gonna make it.” 

This crotchety old artist is waving his hands in frustration at a young Da Vinci because in renaissance Italy young artists were ditching large frescos in favor of more nimble canvas. 

This is a story as old as time. Humans build fortresses of values and judgements about what is “correct” and “the right way to do things” throughout their lives. The longer they believe something the tighter they hold on to that belief (usually) and the more they resist change with all of their effort. 

Then, on the opposite side of the spectrum other people, usually the young, foster change through creativity and experimentation. 

This experience is a universal constant in our human story. 

And, we’re watching the same story unfold again in the art world with the explosion of digital art and, specifically, NFTs.  

If you’re not familiar, an NFT is, simply, a certificate of authenticity for a digital file (file and asset can be used interchangeably) written with computer code. 

As an example, we all go on google and search for an image we want to add to a word doc or powerpoint. We find the image, right click, save, and then we have the image saved on our computer. It’s ours to use forever since anything digital can be infinitely replicated forever and ever. 

However, NFTs allow users to claim ownership to digital assets (files) and prove the authenticity of their ownership. This is creating an ability to prove ownership of a unique digital asset, something that has not been possible before. 

This has created an EXPLOSION of interest and creation of digital art, secured and authenticated by the blockchain (mostly on the Ethereum network). 

There’s billions of dollars of transaction volume happening on decentralized exchanges like OpenSea, Rarible, and SuperRare where NFTs are traded. 

CryptoPunks sell for eight-figures ($11.8 million and climbing to be exact) on established, “old guard” art auction houses like Sotheby’s. 

Pixelated pictures of cats are selling for thousands. The lowest price Bored Ape will pay for a down payment and more on a typical house in the USA.

The most amazing, concerning, outrageous, and just plain hilarious project is the Ether Rock project. They’re, simply, 100 clip art images of rocks. 

The latest sale (as of writing)... $1.7 million (I checked right before sending this and now it’s $2.8 million)! 

A clipart picture of a rock, which took zero artistic skill to create (I say that in the most objective meaning possible), sold for more than a Lamborghini, Ferrari, Rolls Royce, and Porsche COMBINED! 

And with most things new and different, this has gained its fair share of haters. 

“How can someone pay THAT much for a silly picture on the internet?”

“NFTs are the latest fad and bubble! I’d never buy that…” 

(I agree the values of NFTs will experience a boom-bust cycle. The dead weight will fall while the cream will rise to the top long-term)

But, what’s really going on? Has the crypto world lost its mind? Are we seeing what happens when too many young people with nothing to do and too much money to burn find a new toy? 

Or, are we seeing the birth of a new form of artistic expression, status signaling, and value creation? 

My approach (and where I attempt to land on most observations) is to seek the middle path. There’s nuggets of true technology innovation, seismic shifts in culture, and changes in how we perceive value layered in with pure speculation, greed, and absurdity in all of this. 

It’s through this balance of playing in the absurdity that we glean what new cultural values emerge. These new values will drive the direction of what goes mainstream and changes our cultural consciousness. 

Money, the use of money, investing, and digital value is all being remixed and reborn in the world of digital assets and NFTs right now. 

Now, the majority of these projects will trend to zero in the intermediate future. The best memes (like the Ether Rocks, damn I love these silly rocks...) and the ones with legitimate artistic value will retain value and continue to appreciate, but most of the projects right now in the NFT world are copy cats and cash grabs. 

But those shaking their fists at the clouds are missing the forest for the trees. 

Artists are flocking to launch digital art secured through NFTs because the artists gain a specific financial benefit. NFTs allow for an artist to code in a perpetual royalty on all future sales. 

With NFTs, artists can now earn royalties on their work forever. This financial incentive to shift creation into digital art is one of the reasons artists are moving to the medium. 

Ok, there’s so much more to talk about with NFTs (the future of what this digital authentication technology brings is massive and far beyond art), but to keep this post in line with my normal length, here’s how I’ll close. 

Artists are the pioneers of culture. Artists lead the way and define what culture becomes mainstream. And, that alone is a huge leap forward for crypto.

Visa shocked the world this week by announcing they purchased a CryptoPunk. This old-school company bought an NFT, minted on the Ethereum network, all before they bought Bitcoin or integrated crypto payments into their tech. 

Why is this such a big deal you may ask?

One of the biggest roadblocks and objections for crypto is that it’s too complicated and too technical for the masses to understand. 

The masses don’t understand (or care to) the combination of finance, macroeconomics, politics, behavioral psychology and technology. 

But the masses get culture. They understand buying sneakers, Rolex watches, and designer handbags. They love to emulate their favorite artists, pop stars, and celebrities. 

The masses get status signaling. 

Art and culture are the bridge that brings millions of new users to crypto. 

And the best way to play that right now is to own the asset that it’s all built on, Ethereum. 

There’s way more to talk about regarding NFTs and what’s happening right now, so this is just the teaser. If you’re curious to learn more and see what’s going on, head over to OpenSea and browse the art. Check out projects like Art Blocks, Bored Ape Yacht Club, Parallel, and Currency by Damien Hirst. 

I’ll be covering more topics like play to earn gaming, fractionalized real estate, and more in the months and weeks to come!