YESTERDAY MY NINE-YEAR-OLD son asked me for $9.60. Actually, he wanted 1,500 V-Bucks, which is the Fortnite currency used to purchase skins. For those who are not parents to the nine-year-olds of today’s world, skins are the visual identities for one’s avatar in the game. My son was tired of looking like Harley Quinn or Travis Scott. He wanted — needed — to be Sklaxis, a neon lizard-reaper who can wield Bone Fangs and Neon Venom (for an additional 1,100 V-Bucks). My daughter, aged six, tried to spend $2.99 on a cat carrier in her Barbie iPad app until I vetoed it; her digital Barbie doesn’t even have a cat.
The only way some traditional art buyers currently see value in ownership of NFT artwork is to bridge the metaverse with the tangible here and now — for example, displaying their Beeple NFT proudly on their Samsung Frame TV.
It’s not as if my kids are the first people to want to pop their piggy banks on items they can’t technically hold in their hands. I’ve been questioning digital swag purchases for a long time. When my kid sister and her friends were breaking their banks on expensive sofas and fancy flooring for their Sims homes in the early 2000s, I remember thinking: these kids need a real life.
Today, I received an email newsletter that argued convincingly that I would soon be purchasing my own luxury items, from footwear to handbags — as NFTs. In a time that is now, in a galaxy that is basically here, all high-end fashion will be accompanied by an authenticating digital asset. Further still, according to this source, I will soon covet new Gucci NFT sneakers that will never actually touch the cold, hard ground because they won’t be real, exactly. (But who’s to say anymore what will define real?). These NFT shoes will be worn proudly as an overlay to my feet on FaceTime and other places I venture online — a high-fashion, exclusive version of a Zoom filter. Only instead of making me the cat lawyer, I will get to be Gucci fabulous whenever I pull my sneakers out of my digital closet. Real life be damned!
A refresher: NFTs (non-fungible tokens) are unique digital assets that exist on the blockchain. They are encoded with metadata that allows for a permanent public record of origin. They can’t be copied; they’re tethered to their owner; and they’re really hard to explain to my 83-year-old Tita Luchie. The first NFT was minted in 2014 as a piece of digital artwork, but in 2021 NFTs graduated from being a niche interest of basement-dwelling tech nerds to front-page news.
In March of this year, the traditional gallery art world was thrown into turmoil by the Christie’s sale of a Beeple artwork for 69.3 million dollars. To many in the art world, Beeple is more of an illustrator than a fine artist of significance. It was likely his robust Instagram following, critics argue, that made him the first NFT artist to be selected by a major auction house. And like my dad said, “that’s an awful lot of money for a jpeg.”
Like many other meteoric rises, the NFT art market took a nosedive soon after its rapid ascent, losing 90% of its value in the first week of June 2021. But like meme stocks, or stocks whose rapid popularity is driven by social media rather than tested market performance, the true value of NFTs likely just requires more time to level out. We’re talking a marathon, not a sprint.
While much of the NFT news of late has been centered on the art market, really anything can be made into an NFT — a song, a tattoo, a viral video. For collectors, there are the more parallel digital entities to, say, Pokémon cards or Garbage Pail Kids — Cryptokitties and Cryptopunks being among the most popular.
But more conceptual possibilities of NFTs are only just beginning. A New York Times columnist reported on NFTs, minted that column into an NFT, then turned around and sold it for $560,000 (donating the proceeds to charity). Edward Snowden sold an NFT comprising a portrait of his face laid over text of his court documents. And the CGI influencer Lil Miquela (a computer generated, highly influential “person”) has released an NFT of her wearing a fringe dress made entirely of Instagram comments from her community. The feedback loop can make a girl dizzy.
But who’s to say anymore what will define real?
Due to their inherent authentication properties, NFTs bring with them the benefit of artificial scarcity. Unlike the scarcity of an original painting or, say, your own child, artificial scarcity applies when an item could be mass produced but isn’t — a purely financial decision. Like a limited-edition sneaker run or a signed edition of photographic artist prints, the value of NFTs is implicitly linked to the exclusivity of ownership. Scarcity in the digital space is universally synthetic; the difference in energetic output between creating thousands of copies of a jpeg, or just one, is negligible. (Interestingly, the environmental footprint required to mint an NFT is not insignificant at all at its current estimate of 35 kWh, the amount to power a refrigerator for a month.)
The current wait time to authenticate your Pokémon cards is about a year, and “Antiques Roadshow” reminds us that the business of verification and establishing provenance for tangible objects is historically clumsy and time consuming. With NFTs, all those barriers are eliminated.
However, not everyone is buying. I spoke to a range of fine art collectors who find the NFT phenomenon too untested to guarantee wealth accumulation. They predict NFTs are likely to be no more than a passing fad popularized by a weird year trapped indoors. Further, the value of digital assets that can be licensed — such as ownership of digital music catalogs — carries a far greater appeal to those looking to invest in digital properties. And sure enough, the first digital catalog NFT was launched in early June.
To me, the idea of buying an NFT initially felt akin to purchasing a star in the galaxy — slightly gimmicky and romantic but not actually real. So why are NFTs seemingly everywhere right now? There’s one obvious answer: the pandemic created a leap forward for many folks in embracing and existing within a fully digital reality. With nothing else to look at, our Zoom screens became, quite literally overnight, the primary way we interfaced with the world. We went from “this is my body in the world” (in person, at the office) on Tuesday, to “here is my digital projection” (for the next very long year, on Zoom) by Friday. The metaverse (a term used to describe the reality beyond the physical, or the sum of all virtual worlds, augmented reality, and the internet combined) very quickly came to feel tangible to many of us, so a dematerialized value system seemed easier to wrap our heads around. It’s the “touch up my appearance” button, just pushed a few ticks further.
To me, the idea of buying an NFT initially felt akin to purchasing a star in the galaxy — slightly gimmicky and romantic but not actually real.
But we’re clearly only halfway into the matrix. The only way some traditional art buyers currently see value in ownership of NFT artwork is to bridge the metaverse with the tangible here and now — for example, displaying their Beeple NFT proudly on their Samsung Frame TV. This convergence of the physical and digital realms has been coined “phygital,” which sounds like something you might need to treat with an ointment. But in actuality, phygital reality is the current overlap of digital and material, and is already in use everywhere from magazine ads with embedded QR codes to the phenomenon of “click-and-mortar”: online pre-shopping, but closing the deal in-store. The phygital is Pokémon Go.
Tech bros still dominate in the NFT space: they’re called whales, and they are Ethereum-rich crypto-slingers, gulping up as many NFTs as they can get their digital mouths around.
However, there are those from the traditional art establishment leaping head-first into the metaverse too. Koenig Gallery has staked a claim in this future space, where they created a virtual gallery companion to their IRL identity, allowing viewers to enter their space in Decentraland (a prominent Ethereum-based virtual world) and view NFT artworks for sale in the metaverse.
The reticence to fully dive into the mindset of valuing digital property conjures thoughts of me as a grandmother, romanticizing reading the print version of the New York Times in bed — something my kids will likely never adopt nor even see the value in. And the reversal holds as well: I already anticipate the sounds of my children begging for not only an actual car, but also their digital wheels.
Judges hand out different levels of leniency depending on time of day — same with doctors prescribing narcotics. Did COVID-19 allow us to jump the shark, just enough, into a digitized value system?
If crypto is in fact the future of currency, the utilization of NFTs as a tool in all purchasing will become inevitable. Perhaps by the time the metaverse is projected onto the backs of our eyelids, we’ll all be running around in our NFT sneakers. The question is likely not just if, but when.
Ivy Elrod Writer
Ivy Elrod is a multidisciplinary creative living in Nashville, Tennessee. Her writing has most recently been published in the new Playgirl Magazine. She is also an actress and a playwright, and was once the youngest Rockette at Radio City. She is now principal designer and founder of Wilder, an experiential showroom and contemporary design firm.
Gigi Rose Gray Illustrator
Gigi Rose Gray is an illustrator and fine artist born and raised in New York City, now living in Los Angeles. She received a BFA in illustration at Parsons The New School for Design.