Right-Click, Save Crypto Culture | Transition into The Age of Value
NFTs and the Forging of Future Societies in the Guise of Art — Part I
From CryptoPunks, Beeple’s record breaking NFT to BoredApeYatchClub and the dramatic merging of the Punks and Apes under the stewardship of Yuga Labs in 2022, this essay is a 5 part series exploring how NFTs are not merely a value creating tool, but a vehicle for building future societies in the guise of art.
Part I: I begin by laying out the origins of crypto culture within which NFTs emerged and how this fits into the larger macro narrative of our current world order.
I
Transition from The Age of Information to The Age of Value — Origins of Crypto Culture
In a world of NFTs, a picture is not just worth a 1000 words, but a 1000 lines of code. Art has shifted from the object of value, an end state in itself, to becoming a means to an end. Whoever is in control of art, controls our future.
We are now living in a fundamentally different world prior to the use of blockchain technology, in the same way our world was different before the birth of the modern internet in 1983; or before the invention of double-entry bookkeeping system around 1340 AD in northern Italy, a technology that some scholars believe laid the foundations for the western world’s transformation into the current form of capitalism. As a society, we slowly moved away from acquiring wealth in relation to real goods to numbers on electronic databases [1]. What is interesting to consider is that 668 years later, the evolution of this financial system reaches a tipping point and it is in the wake of the collapse of Lehman Brothers in September 2008 that the pseudonymous Satoshi Nakamoto publishes the now historic Bitcoin Whitepaper on October 31st 2008.
The reason I mention these specific points in history is that each of these technologies altered the very core of human societies and it seems we are on the cusp of yet another paradigm shift. If electricity brought us out of the dark ages, then blockchain is poised to be the light that thrusts us into a truly digital era. Some call this integrated future Web 3.0, others the Metaverse or as the founding editor of Wired Magazine, Kevin Kelly calls it — MirrorWorld. Irrespective of its name, the trajectory we are on is bound to be even more disruptive than anything we may have experienced before. In this world, our digital lives will no longer be seen as an add-on to the real, instead it may be more like standing in front of a mirror, where you and your reflection exist simultaneously. Equally.
Like with any new environment formed by new technologies, things appear distorted at first only to get clearer through the rear view mirror as its effects filter through our society. 12 years ago on May 22 2010, Laszlo Hanyecz agreed to pay a fellow crypto enthusiast, Jeremy Sturdivant 10,000 Bitcoins for two Papa John’s pizzas to be delivered to his home. This marked the first ever use of Bitcoin as a mode of payment and the start of the blockchain journey. At the time, one Bitcoin was worth less than a penny ($0,006) and the two pizzas he received cost a mere $25, while he paid 10,000 Bitcoins or roughly $41 for them. As of May 2022, those two pizzas are now worth an unreal and still growing valuation of $300 million at a price of roughly $30,000/BTC.
Yes, I’ll let this sink in for a bit.
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Stepping back again to 2008, the crash was as clear an indication as ever that the global financial system was too centralized and a single point of failure affected millions of people around the world. While there have been many attempts in the past to create cryptographically secure systems to transfer value across a network, the problem thus far has always been about how multiple, independently run computers can reliably agree on a set of common data without double spending or other human faults that may arise[2]. In other words, how do you inject trust into a system, which traditionally is held by legacy gatekeepers? The genius behind Bitcoin, was that it solved this problem through the Nakamoto Consensus (proof of work) in combination with cryptography and other existing computing concepts, proving that digital value can indeed be created, stored and transferred independent of central authority. Fast-forward to 2022 and blockchain has now become the fastest adopted technology in human history, even greater than that of the Internet.
The way I see it, the crypto movement is as a natural (r)evolution to the way our increasingly centralised world has been taking shape since the mid 20th century. At the core of it all lies the question of trust. Who do we trust to guide us into the future — large singular entities or a dispersed collective; humans or a piece of code?
What emerged post World War II was an era of trust placed on centralized institutions, nations, currencies and systems to bring stability and unity in the world. The birth of computer technology and the internet helped accelerate this globalised vision but it also resulted in our everyday lives becoming perpetual information streams, reducing humanity itself into a form of raw material. The information age transformed data into the new oil and the purveyors of data the new kings, further enhancing the concentration of power and wealth that existed in the real world and there was nothing that could be done about it. The result — a rising tide of distrust in the same globalised system, especially in the wake of uncertainty and crisis, that fuelled the search for an alternative decentralised structure.
The quest for trust became a desire for a trust-less system and this is where the promise of blockchain steps in.
In its most utopian counter-cultural form, it seeks the reversal of power and distribution of wealth from the hands of a few with technology acting as the trusted third party in place of the middleman. This enabled key traits that the information age failed to implement to be added on to the digital experience by crypto, but if we think we are on the same continuum as the innovations that preceded it, we are highly mistaken.
The ideas that drove the first digital wave was about a shared vision of connecting the world and spreading knowledge across societies by using the digital interface as a scanner to dematerialize information (Google), experiences (Apple, Spotify, Amazon), and human behaviour (Facebook, Twitter) from the real world rather than trying to replace it. This difference in philosophy is important to keep in mind as we move forward because what the pioneers in the crypto space are offering is a completely different vision of society — one where digital value is created independent of the real world and exists in parallel to it. Bitcoin being the first example of a piece of code that is now regarded as an equally “pristine collateral” compared to real solid gold [3].
In a broader sense, since blockchains are nothing but immutable digital ledgers, what gets recorded on it depends on the problem you are tying to solve. Some focus on storing wealth like Bitcoin, while others like Ethereum use the blockchain to record additional layers of smart contracts to enable entire ecosystems of decentralized applications to flourish [4]. Developed in complete independence, was one such use case that started as a simple question — could a few lines of code be written into smart contracts to prove ownership and add scarcity to a digital image? Unknown to them at the time, what they would end up creating was the archetype of an entirely new form of digital art and the blueprint for Non Fungible Tokens (NFTs). If you still haven’t guessed, they are the creators of CryptoPunks, but more on them a little later. The key message here is that once digital trust is established, it paves way to a whole new world of possibilities unlocking value across previously unquantifiable digital assets and actions, fundamentally changing the architecture in which we interact digitally.
We have now officially begun our transition into the age of value.
As we move further into the 21st century, it seems fair to assume that the end goal of all technological innovation is the total digitization of human experiences. This means that those in control of technology will increasingly determine the nature of our digital lives and therefore our everyday lives in general. What makes this proposition different from the past is that blockchain is designed to cut and paste the very core of human qualities such as trust, money, ownership, and how societies form around these beliefs from the real world to the digital. Where in the past new technologies empowered centralised control, the tools emerging out of the blockchain space are designed to rebalance power, in this case away form the state, legacy institutions and private enterprises towards decentralised ecosystems and communities. This is exactly what we see happening within the larger spectrum of Decentralized Finance (DeFi), Decentralized Autonomous Organizations (DAO), Central Bank Digital Currencies (CBDC), Stable Coins and other crypto innovations — all vying to redesign the existing cultural, financial, geographical, governance and digital structures of the world.
However, if history is anything to go by, only time will tell if the very environment blockchain is trying to escape consumes the vision that gave birth to this technology in the first place. For example, if Facebook’s recent rebranding to shift focus to building their Metaverse ends up being successful, or if States like China take control of this technology, it would represent, the biggest antithesis to everything that crypto as an ideology stands for.
What’s brewing is not just a new technological environment, but an ideological tug-of-war to (re)establish power to determine who sets the premise for future of human societies. In this global shuffle, blockchain technology and more specially for the purposes of this essay, NFTs, could prove to be a powerful tool in the hands of those who decide to wield its true potential. What CryptoPunks spawned was not only a digital art market of a million NFTs, but also clusters of borderless communities with their own set of beliefs, ideals and vision of the future.
How these communities will continue to evolve in relation to our existing structures is up for debate, but here is something to ponder — human beings once belonged to tribes, then kingdoms and colonies, and now we are a society of nation-states. We are bound to, at some point, morph into a new form of human organisation. Considering how fragile trust is in our current system coupled with how there is now a digital alternative, and that the generations to come would soon not know a world without blockchain, perhaps this is how our migration into the digital realm begins.
It is within this macro context and underlying ideology driving crypto culture that we need to keep in mind when confronted with NFTs. To look at them purely as an evolution in digital file formats, as many people do by comparing them to JPEGs, is missing the point entirely. NFTs have opened the door to a new era of artistic practice, shattering an invisible veil that has long separated art and society.
In order to understand why they are a different breed altogether, in the next part I take a few steps back to the genesis of the digital revolution that gave birth to digital art as we know it today.
Read On:
Part II — Right-Click, Save CryptoPunks | Why NFTs Are Not the Same as JPEGs
References:
[1] ‘A Brief History of Ledgers’ LLFOURN, Medium, February 15, 2018
[3] Introduction to the Exponential Age, Raul Pal, Real Vision Finance, 2021
[4] ‘Blockchain Technology Overview’ (PDF) National Institute of Standards and Technology, January 2018
Harsha Biswajit is a new media visual artist and writer currently living and working in Berlin. With a background in economics and digital fine art, his work primarily explores the emergent effects of new technologies on culture. His works have been exhibited in USA, India, France, Spain and Hong Kong, amongst others.
