The art of NFTs

April 12, 2021
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Does your NFT exist if you mint or buy it but nobody sees it? It’s easy to focus on the technical aspects of something and forget where the real value is.

If you can do something it does not mean that you should or it’s worth the effort. When PCs first came out with the productivity tools they did not convert everyone into artists, writers or other creators even though they had access to word processors or photo-editing suites.

After the initial success of Beeple, 3Lau and other crypto early-movers there’s no shortage of others following the success. If the original Cryptopunks are too expensive, how about PicassoPunks or procedurally generated art or even just a picture of melon?

It’s trivial to mint NFTs after the initial learning curve of getting up-to-date with the crypto basics with wallets and the ecosystem players.

The bigger issues are conceptual mind shifts. What is value? How do you value something? Is physical better than something digital?

NFT as a term is a rather misnomer. A non-fungible token does not tell anything about the underlying functionality or value. It’s a descriptive term for something that is unique. Every purchase receipt is unique, too.

They can be as credible or fake as their digital counterparts. A public list of ownership of something is a powerful concept but in itself, it lacks context. Often, it also lacks content and purely just refers to the actual item (or not).

When everything unique is also an NFT what has changed? A lot, actually. But, the fundamental shifts happen in business models and enabling capabilities, not in the content itself.

When everything is a token value is where value has always been: in people’s minds and perceptions. Something has value only because we perceive it to be valuable. This can be a social function (e.g. fame, emotional like a shared moment or fandom) or with utility such as a store of value or means of exchange. Most of all, scarcity is at the root of the value concept.

Making something scarce more fungible can be called shared or fractional ownership. This is another aspect of tokenisation that is very interesting and have wide-ranging applicability from financial products to enabling larger reach and depth of inherently unique items such as the Mona Lisa painting.

Most of the people have seen either a picture of the painting or visited to see it in Louvre. Yet, there’s only one physical item but its social value is enormous because of its wide reach. The more it is shared the more valuable it has become.

This is an interesting aspect of the NFT phenomena. It’s no coincidence that the successful NFT sales have been done either by people who already have a large reach or by concepts that are widely known even if it’s a meme, famous essay or tweet.

The abstraction of value has just started. B.20 token is a good example of a new social currency that is not backed by a central bank but a digital art collection.

The experiments of value creation and derivation are running wild and now it’s not only the privileged and well connected that can practise it but everyone. Enabling creators to connect directly with the buyers is a huge shift that allows value creation, transfer and wealth to be more evenly distributed.

It’s possible to earn a living by following your creative path if you find your fans that are willing to support you on your journey. Thousand fans concept has been taken into another level where there are more revenue streams available in addition to the traditional subscription, donation, crowdfunding and publishing models.

Putting something out there does not mean that anybody pays any attention ­– a fact anyone with a social media account or blog knows. Most of the content is ignored. Only the highly valuable, desirable or something with a compelling context gets attention.

It’s all about storytelling and emotional connection. You need to move people. Authenticity takes guts. Often, it’s hard work and lots of labour of love for years. Ali Spagnola painted for 14 years and has produced over 2800 paintings. And she gave them away for free. Does it pay off now, finally? She has not done it for the money but she has a following and certainly, the 2800 painting holders have a vested interest to see her succeed (here’s mine).

Overnight successes happen at times but often it seems to take many years of traversing the path less travelled. That’s what makes these concepts and people unique, different, authentic, and at times successful.

Wrapping something in an NFT is not the important thing. It’s all about the conceptual context it represents. What’s the value of it?