Two months ago, a wave of news coverage around NFTs began to crest across niche art blogs to the New York Times and everywhere in between. The headlines often assume a baffled posture: “What the Heck are NFTs?”; “What’s An NFT? And Why Are People Paying Millions To Buy Them?”; “What’s this craze for ‘NFTs’ all about, anyway?” Paris Hilton has an NFT, we’ve been told, as do Kings of Leon, Rob Gronkowski, Grimes, Azealia Banks, Lindsay Lohan, Kevin Smith, the New York Times, and Pizza Hut, among others. Depending on who you’re listening to within the fevered clamor around the subject, NFTs might be the next big thing, the last big thing, the future of art, a speculative bubble that has already popped, a solution to the inequities plaguing various creative industries, a heinous agent of climate change, or a stupid fad—and likely, many of those things at once.
The dispute, loud and omnidirectional as it may be, isn’t surprising: NFTs are an emergent technology for buying and selling art and design, and as with all monetizable technologies, people are eager to prognosticate about the many long-standing economic and social problems it might solve or create, like the proverbial person with a hammer to whom everything looks like a nail. As the initial speculative flurry surrounding NFTs has calmed somewhat (the market has deflated significantly from its $19.3 million daily-sale peak in early March), what only a short time ago might have passed for a harbinger of a more equal and democratized design industry now reads as a reflection and exacerbation of that industry’s inequitable and capricious nature, burnished with the revolutionary sheen of techno-optimism.
NFTs are a reflection and exacerbation of the industry’s inequitable and capricious nature.
Let’s back up a bit: All over the world, massive server farms full of powerful computers are racing each other to correctly guess a 64-digit alphanumeric code. Whoever churns through guesses quickly enough to land on the code receives a digital token, whose creation and ownership is noted in an entry on a ledger that anyone can access. These ledgers, or “blockchains,” are constantly updated with newly minted tokens as well as transactions made using that particular type of token. Most tokens produced using blockchains are fungible cryptocurrencies like Bitcoin, “fungible” meaning that one unit of a currency can be exchanged for another of the same. But some blockchains—namely Ethereum, the second-largest behind Bitcoin—can also produce tokens without fungible value.
These non-fungible tokens—“NFTs”—were conceived primarily as a way of certifying ownership of a piece of content that only exists digitally, such as a JPEG, MP3, or hyperlink. Purchasing the “original” version of an image or GIF doesn’t curtail anyone else’s ability to download an identical version for themselves, and legally-binding copyright ownership can’t be transferred via an NFT transaction alone—really, all you receive for the trouble of purchasing an NFT is the ability to claim yourself the “true” owner via a blockchain-verifiable certificate of authenticity, or to sell that ability to someone else. In its early days, the NFT market was an insular affair, driven by the extremely-online sensibilities of cryptocurrency miners and traders. NFT “collectibles” projects such as CryptoPunks and CryptoKitties have been amassing value since 2017, but the growing market drew little attention outside crypto-related subcultures.
That changed when a few artists with large mainstream audiences jumped into the market in 2020, most notably, a graphic designer and artist known as Beeple. Beeple became a household name and bellwether for the NFT gold rush on March 11th, when an NFT of his work sold for $69.3 million in an auction at Christie’s, but it wasn’t his first sale; he’d been cleaning up in the NFT world since October 2020, bolstered by a long career making 3D graphics for musicians like Katy Perry and One Direction, as well an Instagram following of over two million. While Beeple’s sensibility essentially amounts to internet culture-specific reference humor and facile wackiness, his early sales encouraged a wave of NFT-enthusiasm within the high-brow echelons of graphic design and fine art. David Rudnick, a zeitgeisty designer known for his collaborations with musicians and streetwear brands, sold an NFT for $20,000 in February, while Eric Hu, whose design credits include brands like Nike and SSENSE, has made at least $8,500 so far. Even blue-chip artists such as Damien Hurst, Urs Fischer, and WhIsBe—artists who typically work in mediums that can be physically auctioned and exhibited—have jumped in on the craze.
Proponents of the NFT market often describe it as a disruptive force for good within the art and design industries, perhaps even a revolutionary one, in large part because it addresses an issue endemic to digital art. Valuation in the traditional art world is in large part derived from scarcity, which until now was difficult to replicate in digital mediums where unlimited indistinguishable copies of a work can be made and shared for free. But where the goal of “disruption” should ostensibly be to chip away at the opaqueness and inequality of a market controlled by the wealthy and powerful, NFTs seem to represent, if anything, a recapture of digital space by the same status quo that governs the physical art world. Given this dynamic, and the pay-to-play nature of selling NFTs—creators must pay an often hefty computer-energy fee before bidding can begin—it’s unsurprising that the vast majority of this windfall has befallen already big-name artists and designers. That success in the NFT world appears to be mostly predicated on having already attained a more traditional type of success beforehand, be it gallery exhibitions or a large online following, indicates a lack of any real democratizing disruption.
Success in the NFT world appears to be mostly predicated on having already attained a more traditional type of success beforehand.
It’s one thing for NFTs to fail to deliver upon the revolutionary promises misguidedly attached to them—this cycle of inflated and deflated expectations happens with nearly every new technology. But the stakes in this case are precariously high, because while the scarcity that NFTs reimpose is artificial, their production leaves a compounding, indelible mark on the environment. Those massive server farms dedicated to blockchain mining consume a jaw-dropping amount of energy: Bitcoin alone is responsible for more electricity consumption than Argentina, a nation of nearly 45 million. And because the codes for which all of these computers are constantly racing become increasingly difficult to guess over time, the level of consumption is only going to increase, barring an unprecedented value crash. NFT proponents have claimed that Ethereum will soon adopt a mechanism for minting new tokens that doesn’t require such immense energy consumption, but the change is so far hypothetical—and all the while, Ethereum, Bitcoin, and other blockchains have effectively undone a devastating amount of progress in global energy conservation.
With all of this in mind, NFTs seem like an on-the-nose invention of an anticapitalist morality play: a technology that delivers exponential gains to those already at the top by convincing everyone to collectively imagine that free, widely distributed artwork is actually a scarce commodity, all while destroying the actual scarce resources of our planet. But crucially, NFTs are as much the product of horrific social conditions as they are an agent of them. Last week, a man whose photo of a cheese sandwich at Fyre Festival went viral in 2017 announced that he would be selling an NFT of the photo in order to keep up with the crushing medical expenses he is facing due to end-stage kidney failure. For every Beeple, for whom entering a bubble at the right time results in inconceivable riches, there are thousands of people for whom a fraction of that windfall could mean going to college or living without debt for the first time. It’s a dynamic inevitably leads to a sense of desperation for many to monetize any bit of art, design, or internet culture that might draw a spark before the speculative market cools off entirely. This is not the fault of NFTs, or even blockchain technology—it’s simply a product of the world they entered into.
Just a few months after the NFT craze hit the mainstream, the pretense of NFTs as a marketplace for everyday artists and designers is already evaporating. Two weeks ago, an NFT of a single grey pixel sold for $1.78 million in a Sotheby’s auction. The next week, an animated 3D model of the late Chadwick Boseman’s face was put up for auction with a starting price of $1.2 million (the artist recently announced that the work will be “redesigned” after being widely criticized for profiting off of Boseman’s image and untimely death.) As the broader picture of the NFT “moment” comes into focus, it’s increasingly clear that this was little more than a scam, funded by speculation and fees levied on artists, ballooned by the spectacle of big-ticket auctions, and perpetuated by credulous media coverage. The real winners of NFTs are the crypto miners and investors who are taking home the vast majority of the profit. They were never on our side—of designers, or workers of any kind— and the next set of technocapitalists promising overnight industry revolution won’t be, either.