Well it’s been a few days since I gave in and decided to check out the world of NFTs. It feels like a few months. Figured I’d just post some thoughts and observations.
What I thought
I think my biggest confusion when I started this whole thing was, why the hell are people buying NFTs.
Initially I thought there was some kind of confusion going on where buyers thought they were actually buying rights to the artwork in some way whereas in fact, buying an NFT by itself gives you no rights to the original work. But as I talked to people I discovered that while people generally understood this, nobody really cared. It’s not like people were buying NFTs in order to use them in their corporate marketing campaigns or something. They just wanted to “collect” the art.
This just caused more confusion for me. Surely there is no inherent value in buying them, I thought. They’re either buying them as investments or buying them to support artists they like.
While I assumed that people paying thousands of dollars (or even millions of dollars) for big name NFTs are doing it as investments of some sort, I did not believe that the average hic et nunc user wasn’t doing that.
So it had to be about supporting artists, which I thought was nice, but frustrating because I’ve had a donation link up for ages and I get $5 or $10 a couple of times a year. So why were people so happy to support artists via NFTs, but not directly?
I was wrong
Just about everything I thought was wrong.
- People do find (massive) inherent value in buying NFTs.
- People do use NFTs as short/mid-term investments.
- The whole supporting-the-artist thing exists, but it’s a pretty minor aspect.
Yeah, people are crazy about collecting NFTs. Especially from some known artist. Honestly it’s been a bit of an ego trip because people seem to know who I am in this community (getting a shout out from my old friend Mario Klingemann does not hurt either). Feeling a bit of a taste of the (very low level) rock star vibes I had in the 00’s and early ’10s on the Flash conference speaking tour. It’s nice.
Anyway, yeah, everything I’ve put up on hic et nunc has sold out in minutes. I’ve just been experimenting with prices and amounts and it doesn’t matter, it just goes like that. But it goes beyond that. People are DMing me on twitter begging me to let them know the next time I mint something. Or asking if they can buy something from me directly. When people manage to buy something before it sells out, they’re over the moon about it, like they just won the lottery. Get that – they gave me money and they feel like they won something huge. People are HUGELY passionate about collecting stuff.
I’m still trying to wrap my head around it because it seems really, really bizarre to me. It makes absolutely no sense in my brain. But I’m trying to roll with it. It’s just all very surreal.
This is a way bigger part of the system than I thought. For my first NFT I minted 10 editions at 1 tez each. No idea what to expect. Within a couple of hours of them selling out, one was re-sold at 150 tez! There’s one of those still for sale at 3000 tez!!!
Yeah, so IF that sells (I can’t imagine it will), the seller will have made a 3000% profit. Currently 1 tez is around $4 usd. You do the math.
Of course, once something gets into the realm of capitalism, all kinds of ugly stuff starts cropping up. I discovered there are bots people will set up to buy NFTs in bulk from popular artist at low cost and immediately resell them at a huge markup. This generates a bunch of anger in the community, from individual collectors who are mainly just into collecting work from artists they like. The bots make it hard for them to get the pieces they are trying to collect.
tldr; it’s a complex and complicated space.
Supporting the Artists
Like I said, this is there for sure, but it’s not a huge part of it, from what I can see. I think the music industry is a good example. Yeah, there are lesser known indie groups who have the support of loyal fans hoping they’ll eventually make it big. But you wouldn’t say that most people buy music because they want to support the artist. They buy it because they want the music.
I have no idea where this is all headed. On one hand I feel like this can’t last. It’s like a gold rush. Pokemon cards, Beanie Baby stuff. The bubble is gonna burst some day. On the other hand, this probably will pave the way for the future of how art is bought and sold… maybe. I have no clue. I guess I’m just going to surf this wave for a while. And not quit my day job just yet.