First things first, this is not a criticism of NFTs that revolves around their supposed negative effects on the environment. Yes, the energy consumption involved in crypto-anything is reported high, but the issues with NFTs go much deeper than surface level environmental damage. Actually, suggesting the downside of NFTs being the environmental damage is the kind of massive misunderstanding that this article is really about. Of course NFTs are bad for the environment, Capitalism consumes everything from rivers to rainforests, to entire civilizations to power the war machine, what reality are we in?
If there were ever to be a perfect encapsulation of the vapidity and nihilism of capitalism, or of neoliberal illusions, it could be NFTs. NFTs are not a surprising innovation at all, but the responses to it have been surprising. While skepticism has grown, it was quite unnerving how many people hailed it as the next big thing for working artists to finally get what they are missing. What, above all, was surprising, was not the hype, but the “we have fallen for it again” feeling that accompanied the rise of NFTs from digital crypto nonsense from anarcho-capitalist backwaters, to global hype that needs responding to. The same hype came with Streaming, followed soon after by a realisation that the streaming model was better for consumer and corporation, but even worse for the artist. While it is certain that seasoned sociologists and musicologists saw the same depressing situation with Spotify 10 years ago, it is our generation’s turn to say “damn it all, we will never learn”.
It is impossible, period, for capitalism to provide what everyone desires with these innovations like Spotify and NFTs. It is hard to even call them innovations because, for the most part, there is absolutely nothing new about them. NFTs is just the same commodification rebranded, it is the same production model, rebranded, it is the same creator/worker exploitation, rebranded. Even the most territorialised subject laments the “fat cats”, or the hierarchy of classes exemplified by the universally known pyramid with a bag of money on top. Even if we are in a newer phase of an inconceivably plastic capitalism, the same model of exploitation exists: in order for “us few” to be in comfort, “those many” must be in relative misery. It is always the worker/creator who must be exploited, to properly pay the worker, the entire hierarchy of exploiters above the worker must collapse. This is centuries old, commonly accepted stuff, and most areas of the political compass accept this reality as true or necessary, rather disagreeing on who should be on the bottom. Why, still, do we all, who all unanimously agree that exploitation is fundamental to capitalism, believe that there will be some miraculous “innovation” that allows the exploited to no longer be exploited, without the dominion of the exploiter being affected. Every reiteration of this mode of creative production gets progressively worse, resulting in a situation today where we no longer understand how to interact with art without literally owning it, even if owning it is essentially meaningless.
Perhaps this needs some elaboration.
NFTs are essentially certified transaction reports. They are just verified receipts of payment with a digital seal of ownership. The file you own can exist multiple times all over the web, but the NFT proves that you somehow own it. NFTs are discussed in terms of being digital collectibles, and their value has nothing to do with the content of the file as the way these digital collectible file receipts are valued has more in common with contemporary art. Therein lies the problem entirely.
As some critics rightfully mention1, we can learn about this phenomenon by looking at formalism, where a new wave of art critics and artists and curators would judge a work’s success based entirely on the aesthetics. When Marx said that capitalism necessarily erodes all culture, it can be seen here, where bourgeois contemporary art entirely disconnects itself from any palpable reality. When the value or success of an artwork becomes purely a matter of aesthetics, it becomes much harder to make any concrete analyses or valuations of the work, and what is considered valuable becomes controlled by people or institutions of influence. The artworks become vehicles of capital, becoming high priced collectibles and investments, where all the pricing is determined by those who have the monopoly. It becomes something like money-laundering, where highly influential curators and critics can transform anything into a million dollar work simply by saying it is “hot”, or a “safe investment”. This is not within itself a reactionary criticism of the art world, the issue is not that meaning and value is fluid, but the way these artworks connect to the markets of capitalism is entirely toxic. Any serious critical discourse was lost in the noise of the marketplace. A common example given, is that the reason why so many of Warhol’s works sold for so high, was that the original owner of the first big-money-Warhol, wanted to safeguard their investment by creating the illusion of value in Warhol’s brand. In simpler terms, the art market runs on consensus marketing, where price and value are assigned basically at random based on near-algorithmic modes of organising investment portfolios.
Looking again at NFTs, the big news in that world regarded the $69million sale of Beeple’s everyday collage. That seemed to be the moment where artists around the world started celebrating a new era of well-paid art careers enabled by miraculous developments in digital capitalism. Yet, the illusion is so obvious as soon as any sociological enquiry is aimed towards it. Who is Beeple, and who paid for Beeple’s $69million artwork? The artwork was bought by two cryptocurrency investors who bought other works of Beeple in the months preceding the auction. Then, this collection of Beeple works were sold publicly in shares, of which he kept 59% of the tokens, while Beeple owns 2%. It is pretty clear that the price of Beeple’s $69million work, after being driven up by relentless marketing campaigns and the stress of the auction, was paid to, not only increase the value of the other works in the collection, but to increase the value of the very crypto-tokens used as shares in its divided ownership. It continues that an increased value of these tokens makes them a more attractive investment opportunity, so the ripple effect grows higher on behalf of the original investor.
Beyond this, these two cryptocurrency investors claimed outright that the purchase was intended to be a symbol of the equalizing power of cryptocurrencies. The specific reason could vary, but no one is hiding that the purchase of this artwork was merely a vehicle for ideology. NFTs do not provide a chance for artists to make a living, they are simply another reiteration of capitalist consolidation of wealth and power, the art is irrelevant, just a vehicle for capital.