It could be really difficult for one to understand why someone would pay $69 million for a digital image that can be easily copied and pasted for free. What one needs to understand is that the value of such an item is not in its utility but in its value itself.
What are Non-Fungible Tokens? The first part of the term is 'non-fungible' which means unique, and that such a token cannot be traded or replaced with another one of itself. Fungible items are non-unique and divisible items such as fiat currencies like the US Dollar, a lot of them exist and the one in your pocket is worth the same as the one in Donald Trump’s dollar. NFTs are on blockchains with most of them being on the Ethereum blockchain.
As most things do, status symbols have evolved over the centuries from Mayans pressing their children’s skulls into a variety of shapes to reflect their place in society to fancy watches and rare sneakers. As has been the case with most aspects of humankind, status symbols are getting digitised.
If, like many others including me, you have failed to understand the utility of NFTs, in most cases, there isn’t any. Just like the tulips in Amsterdam in the 1600's or the Beanie Babies of the 1980’s. If you own any expensive NFTs at the moment, the two aforementioned examples must be ringing alarm bells in your head, or if they aren’t, then they should. The Dutch Tulip Mania of the 1600’s saw prices of tulips (the flowers that are now very common in the Netherlands) shoot up to US$ 750,000 per piece in today’s money before crashing completely.
A similar narrative played out for Beanie Babies. These two stories illustrate the inevitable disaster that follows the brewing of a financial bubble of a relatively meaningless asset class. In other words, when people buy utterly useless stuff only with the motive of flipping it for profit, the buying spree ends eventually and dramatically. Gary Vaynerchuk’s NFT restaurant located in New York City perfectly demonstrates the desperation of stakeholders in the NFT market to add utility to them.
Although the signs are there, it would be hard to say with the utmost certainty that NFTs are going to go down the same path as the other assets mentioned above. NFTs are still quite new from a global perspective with only a very small group of people truly understanding them. Twitter’s verified NFT profile picture is a positive sign towards widespread acceptance but there’s still a long road ahead for it to compete with more conventional symbols like fast cars or designer clothes.
Since NFTs can be easily copied and pasted, it makes their apparent utility almost zero. Hence, it is easy for one to conclude that a person only possesses the NFT for either (1) flipping it for profit or (2) to flex. Unfortunately, both scenarios are problematic.
The former points to a classic financial bubble, overinflated rates for little-to-no utility assets being held just for the sake of flipping. While the latter fuels the bubble, it also has its own limitations.
Anybody that has enough money can buy an NFT, there are not many barriers to entry into the NFT game apart from possession of money. This makes NFTs a very limited status symbol as there is no exclusivity attached to them. Although money and status have a strong correlation, money does not guarantee status, hence the sheer ownership of NFTs only guarantees an abundance of money but does not guarantee status or honour.
Unlike overly expensive clothes whose purchase can be justified by vastly exaggerating their additional comfort and style quotient compared to regular clothes, NFTs do not have an alibi for purchase. They are very loud and clear status symbols that are bought in an attempt to motion status. However, purposefully motioning status is a low-status action itself. Successful status symbols require alibis, their consumption needs to be legitimised by their progressed utility. To this end, extravagant brands talk unendingly about extraordinary craftsmanship, splendid planning or designing ability - to sell a facade of functionalism that conceals crude positional stamping.
While indicative expenses and vindications are crucial, the most basic part of a status symbol is a cachet, a clear marker of a relationship with existing high-status gatherings. Both Ferraris and metropolitan waste vehicles are pricey, yet just Ferraris fill in as status symbols since rich individuals don't drive dump trucks.
NFTs clear the principal bar of status symbols: they are extremely expensive. Steph Curry just paid $180,000 for Bored Ape #7990. For the people who got in ahead of schedule, time turns into the flagging expense. It may seem that the expenses of faking an NFT are incredibly low - screenshotting a Bored Ape is free - however, with the assurance of provenance in Blockchain, fake use can be uncovered right away.
Then, do NFTs have any myth of utility? One cannot find anything more than the flimsiest common sense utility of "workmanship" (as Roose says, Pudgy Penguins are "in a general sense inconsequential"). In any case, there is a more essential issue: there is no real way to possess and show NFTs without aim. They aren't ‘normal’ portions of a high-status way of life. Each NFT recounts the narrative of a person taking the time and cash to get an NFT.
Be that as it may, this is the place where things get extremely confusing. The best vindication for NFTs is that they are a venture. Steph Curry didn't squander $180,000 on a jpeg - he got it to sell it for a profit later. Simultaneously, the whole superficial point of interest story itself fills in as a vindication for the presence of NFTs: Without them being used in individual self-articulation, they are just unstable and speculative monetary vehicles. There is a circle, where NFTs are acting like status symbols acting like speculations. In any event, the way that individuals with such ease wield their speculation properties to exhibit taste says a great deal regarding our age. Most likely nobody in the 70's conveyed receipts for corn fates as their vacation cards.
In regards to cachet, NFTs right now offer no unambiguous relationship with high-status networks. Gary Vaynerchuk, Steve Aoki, Mike Tyson, and numerous renowned crypto-evangelists use NFT symbols, however, so do mysterious nobodies. Any individual who peruses a couple of bulletin articles can sort out some way to get one. That being said, aggregate proprietorship makes a ‘symbol club’. For Kyle, they are a "weird blend of gated web-based local area, stock-shareholding gathering, and workmanship appreciation society."
NFTs hence fill in as section level status symbols to join these gatherings. Once inside the ‘swamp club for chimps’, Bored Ape proprietors can partake in the warm sparkle of acknowledgement from outsiders. Kevin Roose, after purchasing a Pudgy Penguin, noticed, "My notices were spilling over with bulbous and angled intruders, all praising me…" But NFT groups have people of both low- and high-status positions, making them generally not quite the same as national clubs or VIP lounges. Anybody can join, assuming they have the cash.
However, many NFTs fill in as brilliant passes to these clubs. Right now, NFTs are just compelling for the individuals who wish to join the envisioned networks around NFTs. In the best-case scenario, NFTs might motion toward ordinary individuals’ profound information in crypto, speculation ability, and experience with state of the art mainstream society. Be that as it may, in our pre-metaverse world, NFTs draw no worth from being important to a high-status way of life; they just point out the cash expected to purchase them. This conspicuousness checks their viability. To be better status symbols, they should turn out to be more casual, like fine Swiss watches, they must be something worth acquiring as part of an attempt to symbolise aspirations.
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