NFT’s – A Sure Sign of Economic Delusion | Ilija Dokmanovic
We’re living in an economic black hole in 2021 – many are out of work or are underemployed due to the effects of the pandemic lockdowns and vaccination mandate lockouts, businesses have gone under or been overtaken in strides by the gargantuan industry giants such as Amazon or Wal-Mart in the United States, local manufacturers are struggling to get necessary materials in the face of a developing supply-chain crisis, and the housing market is dominated by hedge-funds like BlackRock hiking up prices and absorbing much of the viable real-estate that would otherwise be going to emerging families.
It would be an understatement to say that the economic golden-age of the late 20th Century that saw a boom of the ‘middle’ class, comfortable living, ample opportunities and social mobility are looking to be well in the hindsight, whether intentionally or by accident.
But what is strange is that despite these times of economic depression, gigantic wealth transfers, and a world turned upside down by the effects of the last 18 months, we’re still seeing multi-million dollar trades – and from the strangest of all places: internet gifs, and pixel art.
For anyone who has been paying attention to social media over the past 6-months or so, a certain acronym has been gaining more and more popularity, seemingly out of nowhere.
NFTs” or Non-Fungible Tokens are a type of digital asset, in the same spirit of cryptocurrencies such as Bitcoin or Ethereum, but instead of being a viable currency or platform of decentralized money-trading, NFT’s are more akin to a digital art-auction.
In the simplest terms possible, an NFT is an original piece of data; such as a gif, a tweet, a particular mp3 file or song, or any other ‘asset’ that can be valued and traded online. Confused? Perhaps I need to put it in another example…
Imagine, for example, you wanted a picture of Edward Hopper’s “Nighthawks” hanging in your hallway. You could order a print or poster from the internet, get it delivered to you, frame it up and bam – you now have a piece of art you appreciate in your house. You could even commission someone to recreate the painting, nearly stroke for stroke, making a nearly indistinguishable piece – but it wouldn’t be the original, would it?
NFTs, in this same sense, are the original painting; with the original metadata stored in the file upon transfer, and ownership of that data belonging to the purchaser of said NFT – whether that’s an illustrated picture of a smoking monkey in a sailors outfit for upwards of $150,000 USD, Nyan Cat, or any number of digital items that can be bought and sold on the market.
The phenomenon of NFTs have been around since 2014, but only in the last eighteen or so months has it been quick to gain popularity and traction, growing from a market of tens of millions, to the billions of dollars being traded for a variety of digital assets. Jack Dorsey, founder of Twitter, “sold” his first tweet for around $2.9 million USD. A digital artist, Mike Winklemann, sold a collection of daily drawings for $69.3 million through the world-renowned auction house, Christie’s. Every day, hundreds, if not thousands of transactions are occurring daily online for digital bragging-rights. It would be more funny, if it wasn’t also completely insane.
Much like the art-trading market, it seems that the NFT market is rife with a variety of problems that those involved with it would rather not point out; not only delusion for the actual value of certain assets, but the fact that these markets are absolutely being exploited by money-launderers – and the reinforcing effect one has on the other, again much the same as the ‘fine’ art trade has done for decades.
We have all seen how literal shit-in-a-can will find its way to the consideration of an artistic masterpiece valued around $300,000 at auction, or a banana duct-taped to a wall will somehow fetch $120,000 despite it being essentially valueless objectively – or how we must all be expected to gawk at the “cultural innovation” that Jackson Pollock created with his silly-string inspired ‘Blue Poles’. Does the Western World really need to go through a digital degradation of the notion of objective value in order to satisfy those with far too much money and very little sense or sensibility?
Because the popularity of NFTs is such a new phenomenon, there is no real medium for regulation or oversight of these trades, other than the regular capital gains tax that is given to luxury commodities that are bought and sold on the market; in the grand scheme of things this is a small cost compared to what one might lose if they are caught with their illegal gains.
Google Trends has also shown that the popularity of interest in NFTs has been emerging particularly from mainland China, probably by no coincidence at all given the growing emphasis China has garnered on conducting and growing their business and trade roles online – with that comes ample opportunities to exploit backdoors in the markets that Western nations have not necessarily paid much attention to yet.
Speaking of China, I find it increasingly more interesting that when comparing their GDP with ours, the Chinese economy at least is based on tangible assets, manufacturing goods, and developing their technology and arms industries – whereas we in the West have scraped the bottom of the barrel, and instead of returning to some competitive tangibility, we’ve decided to exploit virtually nothing (quite literally) in order to keep our own inflated economies and egos afloat. It’s shameful, but as long as it keeps those numbers pumped-up on the GDP line along with the insurance and real-estate industries it’s likely most economists won’t care, even if it means lying to ourselves about our own productivity or functionality for another decade.
When we resort to virtual horse-racing, trading hundreds of thousands of dollars for breeds that are programmed – not bred – we are truly insulating ourselves from reality, further boxing ourselves in to this make-believe virtual world that is just a slice of the Ted Kaczynski fever dream we currently find ourselves in.
Will having the fastest ZED RUN “racehorse” really improve anyone’s status compared to the actual, real, living and breathing animal? Where’s the skill in binary code that’s any more meaningful than dedicating one’s whole life and career to caring and maintaining thoroughbreds and stallions?
Will owning the digital rights to Nyan Cat or a personalized “CryptoPunk” matter when hypersonic missiles knock out power-grids and you can’t access these electronically-based metadata?
Does anyone really understand why this is happening? Does anyone really care as long as the money-machine keeps printing? Does any of this really matter? No.
No matter how people may try and convince themselves that these tokens are somehow worth something, their value will never truly be tangible. Not in the same way a physical object could be, or a piece of live music enjoyed, or an actual event experienced or interacted with.
The rise of the NFT market and the millions of dollars that circulate through it is simply another sign of the level of delusion we allow the elites of our society to exploit in order to not face the truth: we have already lost the economic race to our competitors across the world, we’re just playing pretending to still feel like we’re somehow in the game.