Written by Tal Shachar and Jonathan Glick
NFTs are fun. They are also revolutionary infrastructure to support and scale the creator economy. Yet it’s unlikely the current mania can last. It’s too much too fast, in many ways too blatantly cynical, and it’ll probably crash.
But the frenzy around NFTs right now is instructive. Because much of the hype is pure status-seeking. And that’s a healthy reminder that people will always find value in being early to the next thing, part of the innermost ingroup of something cool. And that’s a feature, not a bug for NFTs. It may in fact be the point. NFTs are evidence of your cultural bona fides. They are proof of passion (PoP).
In retrospect, this is an obvious extension of the social Internet. Social networks made social capital -- that is, popularity and influence -- scalable and quantifiable. We went from vaguely knowing who were the most admired kids in school to knowing who exactly are the most admired people in the world. In doing so, social media commercialized the explicit value of social capital, providing real revenue for influencers, which in turn made the pursuit of popularity more intense.
NFTs take this to the next level. They provide the infrastructure, tools and economic incentives to turn every art form, media consumption and cultural behavior into a more transparent and verifiable status game. It’s easy to focus on today’s eye-popping prices and overlook the feature that will be the most transformative: the record of ownership. Yes, the wallet that buys can be anonymous, but it cannot be hidden. Any purchase on the blockchain is recorded forever. Once that information becomes immutable, verifiable and public, we are in effect creating ledgers of coolness available for all to see. That band? Yeah, well, check my wallet, bro: that’s an NFT of their first hit. This amazing artist, I bought her NFT before she was in the Whitney and here’s the proof.
The beautiful thing about #blockchain is that it records everything. Who were early artists, Who collected, Bidding wars, Scammy/dodgy transactions, The history is right here, it can't be forged, manipulated or ignored. Everyone was part of it 🔥
The social returns to prescient taste and committed fandom just went up dramatically. This dynamic will upend how cultural trends are born, financed, grow and die, change marketing and community building, and turbocharge the value of influence. It will also create a backlash to the financialization of every aspect of creativity, and leave us to grapple with a transformed society.
As Rob says in High Fidelity, “What really matters is what you like, not what you are like.” We have always been able to own cool stuff and show off our ownership to our friends. What better evidence of our good taste? The Frank Miller Daredevil #158 was cool. You bought it the day it came out. Your ticket stubs to that ‘98 Interpol concert, very cool. They are trophies of your taste. Keith Richards and Mick Jagger connected on a train platform because one recognized the Chess Records the other one was carrying, proving him worthy of collaboration. Humans have always exhibited trophies of their accomplishments and credentials. Hunters display animal parts. Doctors frame diplomas. VCs put their exits in plastic in their lobbies. Hipsters show you their vinyl. But unless you’re lugging your trophies around like Mick Jagger, in a pre-digital world and pre-crypto world, this was largely private, unverifiable, and inaccessible.