Non-Fungible Tokens. The value of nothing?

Until now, the value of a thing for sale has always boiled down to the availability of that thing, which is determined by how rare it is, or by the difficulty of its manufacture. And then there’s the demand for that thing, whatever it is. Things that are difficult to find, or produce, and are very much in demand, command high prices. On the other hand, things that are abundant or easily mass-produced, but for which there is no demand, say because they’ve fallen out of fashion, or have become obsolete, aren’t worth anything.

These traditional laws of supply and demand have held true, until now. But now, the digital age has begun to render things that are very difficult to produce worthless, by virtue of the fact that technology enables them to be re-produced instantly, and infinitely. A practical example of this, is the chess set I’m modelling.

In olden times, my chess figures would have been hand carved, and each chess set would have been unique. In the right market, a maker of such ornate pieces could reasonably expect to make a living from it. I’m in the process of sculpting them, digitally, using a piece of software called Blender. Amongst other things, it simulates very well the process of modelling in clay. The end result is a three-dimensional digital model of whatever you care to imagine.

But what use is a digital chess set, you ask? Well, having defined their shapes digitally, as computer files, one of the things we can do is print the pieces out, using machines like this:

When they first appeared, in the late 1980s, 3D Printers were the stuff of science fiction. They cost more than a house, and only big engineering companies ran them. Now you can get one for the price of a washing machine.

There’s a lot of modelling work in each of these chess pieces, hours and hours of it, but a set made by digital methods is essentially worthless, because, once finished, the technology of 3D printing renders it easily, instantly and endlessly reproducible.

3D Printed Chess Pieces – Crealty Ender 3

I’m going to gift the set I’m making, so its value in monetary terms is irrelevant, but my little hobby here also illustrates how seriously our technology is upsetting economic norms. Capitalists are starting to worry about it too, and they’re coming up with ideas to artificially inflate the value of digital assets. To this end, we now have the Non Fungible Token, or NFT.

You may have heard about these as the latest get rich quick thing, with people trading NFTs for large sums of money. What NFTs are, in essence, is a way of offsetting the infinite reproducibility of a digital asset by registering ownership of the original file. Then, like any other artwork, you can make as many copies as you like, but there will still only be the one original. I could register myself as the original artist of my chess pieces, which would make the files I hold unique, and any copies you hold, not. You can copy and paste your files as much as you like, but the originals, in theory, retain their value – if they ever had any – because there’s a ledger out there in internet land that says they’re the original. What you buy when you trade the NFT is, if you like, the title deed that says those files once belonged to me, the artist, and now they belong to you.

But here’s the thing I don’t get about NFT’s, and perhaps someone can explain it to me. For the NFTs to be worth anything at all, be they the data for my little chess set, or the original word-files for my writings, or a doodle from a digital paint program, I’d have to be a name by other means, and much trumpeted by the machinery of name-making celebrity culture. In which case, we’re no longer trading purely on skill – say in a work of art, or a piece of music. We’re no longer manufacturing a product at all, we’re manufacturing value.

The skill is still required, a product must be produced – there’s no getting around that – but no matter how well executed, the digital product, as a thing in itself, is not worth anything. What grants it any value at all is how easily a potential consumer can be persuaded the original creator is a name whose name is worth more than other names, or is at any rate a star that is rising, so an NFT, perhaps traded modestly to begin with, might one day be worth a fortune. But this is a very strange business, that we have come to value no longer the thing in itself, but its digital seed, and in fact just one seed in particular, when, for all practical purposes, it is identical to all the others copied from it.

The owner of an original painting can take pleasure in that ownership, in its display, its history. It can be gazed upon, and appreciated as a work of art. But one does not display an NFT. It has no aesthetic value, no line, no shape at all to the naked eye. It says nothing, speaks nothing to the soul.

Capitalists have embraced all previous industrial revolutions, but it seems to me, they’re not so keen on this one, whose business it is to blur the boundaries between the physical world, and the virtual. The creative types were among its first victims, but now it’s coming for the capitalists themselves, since the basis of “capital” is becoming less tangible, infinitely reproducible, and therefore materially worthless. I may be thinking about this all wrong, but the NFT strikes me as a dubious last ditch fix, a way of holding on to a decaying system of values, and a value culture, that technology would otherwise have little trouble sweeping away. That said, what the world looks like, if we let the machines loose from the NFT noose, is anyone’s guess. It would require at the very least, a fundamental restructuring of society, how we earn, and live in an equitable fashion, but thus far, that seems not to be up for discussion.

I could create an NFT for my chess piece data, but unless I make a name for myself, or have someone else make it for me, no one’s ever going to speculate on its value, so it remains worthless. Meanwhile, more marketable NFTs change hands for tens, or hundreds of thousands of pounds. In this privileged version of the world, NFTs might mean something, but it is a world that seems designed only to give the wealthiest something to spend their money on. Meanwhile, the food charity queues grow longer, and our escalating energy prices mean people cannot heat their homes.

In the latter world, which is a big world, and getting bigger by the day, NFT’s don’t mean anything at all.

Here’s a humorous take: