November 21, 2021•655 words
Here's why I think NFTs won't last more than maybe twenty-five years.
NFTs use the all-the-rage blockchain concept as a way of ensuring scarcity in a digital world. Just like how one bitcoin belongs to one person, even if you copy the code to your own flash drive and carry it around with you, one digital—or digitized—work of art belongs to one person, even if you download it and make it the wallpaper on your Dell Inspiron at work.
But all this really presupposes that scarcity truly is what makes art valuable, and simply maps that on to the digital world using this shiny new blockchain toy. But first, scarcity is clearly not the only thing that makes art valuable. It's obviously a factor that, ceteris paribus, will increase the value of something. But the artist of course matters. Historical events around the art’s creation matter. What other people feel about the art matters.
So yeah, I guess all those factors can, more or less, apply to NFT art. And scarcity, the only thing the digital world can't provide on its own, is provided through the blockchain.
But does scarcity actually matter anymore? Or will it in a few years? Throughout human history, and indeed throughout the history of life itself, scarcity mattered because there were limited resources to spread around all the living beings that needed them to survive. We evolved in that world, maintaining throughout our biological and subsequent social development our finely-tuned sense of fairness over resources (along with the urge to hoard them... also known as greed). At this point in our development, we have become so advanced that we apply these survival concepts to, strangely, collecting art. Why? What's the point? It only sort of makes sense if art is money—not even entertainment, but simply a store of value.
NFTs don't help more people enjoy art. They may help more people own art (good or bad depending on who you ask). They may help more artists sell art (mostly good I think). But they don't really provide value. They just provide a store of value made somewhere else.
So if NFTs serve no purpose other than as stores of value, they have nothing on boring old bitcoin except volatility. Who thrives on volatility? Speculators and the handful of early adopters that get out before it’s too late.
In this framework, then, NFTs simply—or at least largely—aid speculators to foist a synthetic, unnecessary scarcity upon art in a world becoming more democratized by the effortlessness of copying data.
For the vast majority of artists not named Damien Hirsch, their art is often not so much meant to be a store of value for the buyer, but rather an item of entertainment. I’ve bought a few fancy photos over the years because I like them. I have yet to see if the then up-and-coming photographers have become famous and my prints are now valuable. I hope so. But they are so beautiful. It’s not really what I’m thinking about. And I think that’s because I’m not rich. I’m not a speculator and can’t afford to be one. I really believe that us hoi polloi that the speculators argue can benefit the most from NFTs are the ones that already benefit from art as it is, in its pure form, by simply enjoying the work.
OK, so to be clear, I started this essay out a little dramatically. NFTs may serve as an easy way for us consumers of art to send a little support toward our favorite creators while getting a token something in return… sort of like Patreon. And the richest among us can buy and sell million dollar NFTs like they do shiny metallic ballon dogs now. But it just doesn’t seem that different than what we were doing five years ago. NFTs will “last,” of course, but they will just be another thing and not the next big thing.