Imagine the greatest speeches of our time. Imagine the things that moved us as people, inspired nations and great sporting moments. Then imagine the artworks in galleries or museums in countries that you could never visit or ever own.
Imagine you made something or said something that no one responded to. Then imagine your favourite creation that you put heart and soul and countless hours creating, took it out to the art gallery or the cinema or the speaking circuit, but nothing happened!
Now add NFT to the mix.
Wait, what? Nonfungible tokens! Why?
Some believe that the decentralised and crypto future will deliver untold wealth to the creative person. Further, they are the great hope of the creative and art world, or at least that is what the proponents would want you to believe! So, if you are an artist, gallery, content creator or anyone else in the creative space, you should be following the NFT debate. However, don’t rush headlong into it, and look at regulatory limitations before transferring your hard-earned money.
An artist sold their NFT work for $ 69 million, and the first tweet of the Twitter platform by it’s CEO was sold for about $ 2.5 million. The first one is a bit difficult for me to comprehend but let’s start with the seemingly easier one. The CEO runs two companies and has a reasonably large following of about 4.5 million followers, and the value of the tweet was roughly half the number of followers he has. I will not extend this simplistic analysis to the artist, but it did get me thinking if I had said anything that might be worth an NFT? Doubtful, and let’s leave it at that.
Now back to the path-breaking sale. The work is, in effect, a large, square image file (21,069 by 21,069 pixels) and a consolidation of all images released on his website from 2007 to 2020. Most of the art was inexpensive to purchase from what I have heard, but the consolidated purchases must have added a small dent to his financial kitty. Those images, released every day, have been consolidated into one NFT work. It is possibly a reflection of his work’s network effect or the disturbing signs of a bubble. The sale led to a deep dive by the art world, and there is a lot of debate on the stature of the artist’s work.
The quotes that caught my attention are-
i. ‘During a time of immiseration, investors are competing to throw tens of millions of dollars… at this?’
ii. ‘The emergence of NFTs is a tale of late capitalism. A moment in which material prosperity and security for most people have dissolved, in a system that, unable to meet people’s needs, has dematerialised value.’
It is essential to understand the impact of a development like this and take stock of it from multiple dimensions depending on the stakeholder’s perspective. Is it a development where the customer believes they have purchased a marquee product that will stand the test of time and appreciate to a billion-dollar valuation? They certainly think so, for now. One part of me goes back to the dot com era with eye-popping valuations, which was then gone even as one sat to discuss this with friends over chai. Remember that one?
It’s also telling that the technology and creative platform that is supposed to create trust and authenticity and creative space for everyday expression has rewarded disturbing messages in that work. From my limited perspective, it is a wasted opportunity that the image is not the pale blue dot picture with the accompanying speech by Carl Sagan or some recording of another human endeavour in these trying times. Instead, it is disturbing for the valuation and the imagery it glorifies. Perhaps it reflects the waste of the modern community and the related city landfills in the name of progress.
We now reach the core of the crypto and NFT debate on energy consumption. 26.5 terawatt-hours of electricity is consumed every year on Ethereum mining. For such a small global economic activity base, this is a considerable amount of electricity consumption. As per this study, ‘cryptocurrency mining consumes more energy for every dollar of value generated than extracting gold or copper.’ There is a fair amount of debate on this issue within the community. There is talk about using renewable energy, carbon credits and even solutions like ETH 2.0 etc. The artist also seems to join efforts in promoting fundraisers around climate change.
From an industry standpoint, they are behind the curve on commitments. They need to do a lot more at a fundamental level before the aspiration and utopia can be taken up more substantively.
References
Why the Artworld Loves to Hate NFT Art
NFTs Are a Pyramid Scheme and People Are Already Losing Money
Digital NFT Art Is Booming—But at What Cost?
NFTs on ETH and their ecological cost
The big problem with NFTs: Energy Consumption
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