I recently attended a session by Raghava KK (multi-disciplinary artist and storyteller) on why NFTs (non fungible tokens) are shaking up the art world. Key takeaways below.
Raghava KK is one of the most clued-in artists re: the fully realized digital world of metaverses and digital avatars that we are hurtling towards at near-light speed.
He recognises that in 2021 — there’s an entire palette of algorithms at play beside artists. He has also consistently pushed the boundaries with creative explorations that examine the relationship between artificial intelligence and human creativity.
The session entailed: a primer on the anatomy of NFT, why more artists are venturing into this crypto-fuelled world, why Metakovan and Twobadour spent close to $70 million worth of crypto on Beeple’s Everydays: The First 5000 Days (which has led to artists dividing timelines into two: B.B. as ‘Before Beeple’ and A.B. as ‘After Beeple’), the real reason why some NFT content prices are sky-high, how artists / content creators should strategise and be better prepared for unpredictable changes in this new space, and more.
Here are the key takeaways from that session.
1/ The new crypto world order
Since the invention of photography, the art world has never been disrupted as much.
From individual artists and content creators, to auction houses, to media houses — everybody is asking how they can participate in the new crypto world order.
For the first time in history, we have the business person listening to the artist, and vice versa.
2/ A market for virtual assets
The gaming world taught us that people are willing to buy virtual assets; like a virtual pair of sun glasses, real estate, night club, domestic pets, and what have you.
Much of the Virtual Economy lives on and and thrives off massive multi-participant platforms in gaming and beyond. Many of those were designed to have or subsequently developed internal markets and economies, with proprietary currencies that players use to buy and sell virtual goods and services.
In a distributed network where nobody controls anything, everything is peer to peer (torrent, gaming, bitcoin), and everybody interacts directly with each other without a governance intermediary like govt, banks, etc. — it is important to have smart contracts to transact in the new p2p world order.
NFTs too are powered by smart contracts that allow you to buy virtual assets, and unlock a range of smart use cases and possibilities (for application in the virtual world).
3/ Anatomy of an NFT
NFT is a way to prove that you own a digital asset (a way to prove ownership of a digital asset; it is not the digital asset itself; think of it as a contract to prove your own the digital artwork).
NFT is also bigger than making money; think of it as a ‘movement’.
All NFTs have two parts (at an exoskeleton level):
NF — digital asset address
T — a unique number on the blockchain that is connected to the digital asset
Fungible, the semantic mainstay of NFT, literally translates to ‘can exchange / replace one entity for another similar entity’.
For eg: A 10USD bill can be replaced by another 10USD bill
Non-fungible therefore quite simply means ‘cannot be replaced / exchanged’
You can NFT any digital asset (like NEFT, NFT is a transaction). Minting (that we hear referenced so much in crypto parlance) is the process of attaching NF to T (or digital address to blockchain)
Types of NFT / What can be NFT'd
- Digital art
- Physical art
- Hybrid art (eg: a projection on a wall)
Format of the NFT — can be text based, image, 3D, VR, something that exists in the metaverse, and practically anything that can be labeled as 'content' in today's day and age.
4/ How are NFTs valued
Behaviorally, the human mind is designed to collect things. And if we are willing to maintain physical history by collecting / curating objects (in public or private museums), the proven hypothesis is — we should also be willing to maintain digital history.
This is the behavioral premise on which NFT exists.
Nyan Cat sold for six figures worth of crypto currency because it was created as a one-of-a-kind remastered version to celebrate the viral GIF’s 10th anniversary.
One guy paid $208k for a video clip of LeBron James dunking because it was the very first NBA top shot video clip (in the history of mankind) that was sold as a digital asset.
Jack Dorsey’s first tweet was sold as an NFT because it was a historic moment in this movement; that's why the tweet sold for so much.
This is also the reason why CNN plans to start selling NFTs of memorable historic moments.
Or why WENEW partnered with Wimbledon to offer tennis fans the chance to acquire an important piece of the tournament's history. It was Andy Murray's victory over Serbia's Novak Djokovic in three sets 6-4, 7-5, 6-4 during the 2013 Wimbledon final. At the time, the Scot became the first Briton to win the tournament since Fred Perry won in 1936.
5/ How to create NFTs
Identify the subculture you want to communicate with: Very critical to do this. Important to over-index on subculture since the strongest bonds lie btw smaller cliques (for eg: within the meme world subculture, the Nyan cat was very valuable)
Make something you love: It could be books, origami, painting, sculpture, music, anything!
Upload / drop it on an NFT marketplace: like Opensea. You will also have to set up your crypto wallet (coinbase, metamask) if you want to upload / drop your artwork on an NFT marketplace.
Market & sell it: As easy as that!
P.S. Additionally, there is something called a gas fee (that you have to pay) to be able to transact on a blockchain protocol (like Ethereum). Gas fees are payments made by users to compensate for the computing energy required to process and validate transactions on a blockchain protocol.
Think of it as the highway toll fee / transaction fees that users pay to miners on a blockchain protocol to have their transaction included in the block. The system works on a standard supply and demand mechanism. If there is more demand for transactions, miners can choose to include the transactions that pay more, compelling users to pay more to have their transactions processed quickly and efficiently.
6/ Value and Subcultures
Like with most things in life, even with art, you have to bring value to be able to take money away.
Marketing your artwork will only be successful as the non-fungibility / uniqueness of your creation. If you want to be valuable, you have to find your unique voice.
What are people are not saying in this conversation; something that is true to you, but is not being said by the community — identifying that will help you build / communicate real value.
These crypto-native subcultures will not follow the familiar tropes of established art cultures at first; and will continue to be ignored / pilloried by those in mainstream culture.
Denis Nazarov points us in the direction of two popular subcultures that followed a similar trend:
:: Photography as an art form
:: Street wear as fashion
NFT also seems to be following a similar trajectory. Content creators would therefore do well to identify a subculture that values original voice and blaze their unique path.
This is a fascinating read on how Axies (digital pets) are bought, reared, and sold as NFTs. In what is arguably an emphatic reinforcement of Chris Dixon’s idea that “the next big thing will start out looking like a toy.”
What really blew my mind:
1/ Scores of people in the Philippines and Vietnam have quit their jobs and make a better living playing Axie for hours every day. They earn Smooth Love Potion (SLP), a token earned through Axie gameplay that can be exchanged for fiat, which in turn can be used to pay for food, shelter, medical bills, and all of the other things needed to survive. Some people who were previously making $5 per day now make $20.
2/ One of the main criticisms of crypto so far is that it has no real-world value or application, but Axie makes you reconsider what real-world value is. In Axie’s case, the value comes from providing meaning, income, and opportunity to the players directly. A typical game would spend millions of dollars on marketing and keep the majority of profits to itself; Axie spends nothing on marketing, but lets players keep most of the value created. That should lead to a stickier game and more opportunities for expansion.
From what I understood, looks like the Axie Infinity company doles out these SLPs to the unemployed gamers to incentivise them to play. These gamers then exchange them for Fiat money.
I also read this deep-dive into how Axis Infinity creates gainful employment in the metaverse for those on the lower-end of the economic bracket. Fascinating rozgar yojana playing out in the Philippines. Low-skilled Filipino workers in the services sector who used to be cleaners, nannies, drivers in other foreign countries, on return to native land, are taking to these metaverse careers in a big way.