15 March 2021 (Chania, Crete) – As I race to get two media projects through their final editing steps, I’ve stayed off-line to concentrate and so I’ve avoided the tsunami of interesting/half-interesting tech stories over the last 4-5 days. Well, until this afternoon when a long time media client called and asked “so, what do you make of this NFT stuff?”
Hoo, boy. I could write gigabytes. But herein just a few words. Well, more like “just read her”. And by “her” I mean Amy Castor, specifically this piece. Amy and I go back yonks. We met at a Decrypt event. She has been my guru to understanding cryptocurrencies and financial fraud. And through her I was introduced to Tim Schneider and Artnet which got me to really understand the money, fraud, psyche, manipulation and culture behind the art market.
Side note: and it has all had some € benefit besides the writing benefit. A Marc Chagall print I bought a number of years ago, thinking it was merely a copy of a print, turned out to be an original print. Chagall normally authorized a print run of only fifty for certain pieces. Not for sale. Part of the kids endowment.
I am assuming you are up to speed on this monster $69 million sale of a “nonfungible token” but if you are not the New York Times has a good recap here.
Amy’s piece which I linked to above gets to the nubs of this whole fairy dust episode and its outright questionable structure. It is not a long read but let me give you a few quotes to give you the gist:
MetaKovan [the buyer, who Castor believes is actually Vignesh Sundaresan and she’d be able to figure it out, trust me] is also behind Singapore-based Metapurse, a crypto-based investment firm. Metapurse’s mission, according to its website, is to “democratize access and ownership to artwork.” The firm also purchased Beeple’s “Everdays: 20 Collection” artworks for $2.2m in December.
Metapurse has taken these Beeple artworks, or NFTs, along with a few virtual museums, and combined everything into a “massive bundle.” Would you like to invest in this wonderful package? You can—by buying B20 tokens.
This blog post on the Metapurse substack lays out the grand plan:
“We believe we truly achieved this with B.20 – the name of a massive NFT bundle we are fractionalizing so that everyone can have ownership over the first large scale public art project within the metaverse. It is important to note that we’re fractionalizing ownership, not the assets themselves. These fractions will be available as 10 million B.20 tokens, and can be referred to as the “keys” to this digital vault.”
So at the end of the day, this is all about “getting the number up.” The B20 token is pumped up in value, so holders and Metapurse can benefit when they go to sell the token—get more ETH, buy more NFTs, rinse, repeat.
The distribution is something to pay attention to. Metakovan has 59% of all the B20 tokens. Why does he own the majority of tokens? As he explains it, that’s so that no one person can own 100% of all of the B20 tokens—and snatch up all this wonderful artwork for themselves. No, this is meant to be decentralized, if you can get your head past Metakovan controlling the token supply.
What’s interesting is that Beeple, the creator of the artwork, is actually a business partner of MetaKovan’s. He owns 2% of all the B20 tokens. I’m sure there is no conflict of interest here 🙂
But what, you might ask, about Christie’s? Surely the venerable auction house, which is being “paid” in this Monopoly money (having waived the standard requirement that its cut of the payment should be in good old folding fiat money) will be annoyed at being used in this way?
Well .. maybe not. Auction houses have seen business fall off a cliff, as you’d expect for places reliant on groups of people sitting close together inside rooms. Being involved in this and getting constantly namechecked means it can be “down wid da kidz”; and if this sort of thing happens again they can always demand payment in real money.
My first thought was “It’s going to be fun watching Christie’s trying to turn that into hard cash”. But then I thought “Ah, it will be pass-the-parcel, buying other digital things with the pretend-money.”
The maturation of blockchain technology, a pandemic that provided us with excess free time to explore the digital world, and a gamification mentality created the perfect storm for NFTs. Suddenly, there is a rabid interest in owning pieces of digital stuff. (Goods tracked by tokens are themselves often referred to as NFTs, but the NFT is, properly, just the means by which they are recorded and “tokenized.”)
I know you’ve heard it many times and you’ve even read it on my blog over the past year but there really is a tectonic shift happening in finance, digital and culture. Yes, over the last century, our world has been advancing exponentially in technology but remaining stagnant in wisdom. We know that. The voice of wisdom is there, but it’s being trampled over by political parties, religions, and nations too mired in blind conflict to lift their heads up and see the bigger picture. Our world is so, so stubborn about growing up.
But that’s “informational” stuff. I am talking about something more tectonic – the complex/interlocking dynamics at the heart of our global (Western) society. There is something larger afoot.
Alas, I must leave it there. Deadlines approach. More to come.