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“Things have no value in themselves, it is opinion and fashion which brings them into use and gives them a value.”

- Nicholas Barbon, A Discourse Concerning Coining the New Money lighter (1696)

On the Contingent Love of NFT Art

Susan Sontag’s The Volcano Lover is a study in the pathology of high-stakes collecting.

Her classic novel opens in 1772 where the titular character, a prolific collector known as The Cavaliere, is crestfallen when his beloved Correggio painting, Venus Disarming Cupid, fails to sell at auction.

It was a prized possession, so The Cavaliere was most reluctant to put it up for sale in the first place.

But after its monetary fall from grace, he was even more reluctant to take it back:

“Since no one offered what I know it to be worth and it remains mine, [I] should love it as before, but won’t.”

The painting itself is of course unchanged, but his feelings for the painting are not — he can no longer love a piece of art that’s failed to sell.

He’s not the only one. 

Money and art are inextricably intertwined, so it’s impossible to separate one’s feelings for a work of art from its monetary value — even more so if the artwork in question is a non-fungible token.

Because NFTs are perpetually up for sale (with floor prices fluctuating 24/7, 365 days a year), a collector’s feelings about their prized possessions are constantly in danger of ascending into euphoria or descending into despair.

This applies to crypto in general, where everything is financialized right from the start.

But the issue is particularly acute with NFTs because they derive their value primarily from signaling and community. 

If you’re down 90% on your NFT, it’s no longer signaling anything you want to be associated with, and you’re probably not going to be motivated to participate in the community.

The market for NFTs, however, is a different kind of community doing a different kind of signaling.

The purpose of markets is to convey information to investors, so the current surge in prices for NFT collections like Pudgy Penguins, Mad Lads and NodeMonkes must be signaling something. 

The first time around, in the 2021 NFT mania, it was easy to believe that skyrocketing prices signaled nothing more than that people had lost their minds. (Fact check: They had.)

But the second time around? 

Financial bubbles don’t immediately re-inflate, so the current mania must be signaling something else.

Could it be signaling that NFTs have value as art?

Can buy me love

Sotheby’s is treating it as such: They expect an Ether Rock they currently have up for auction to fetch at least $500,000 when bidding ends on Friday.

Why do they think their valued customers should pay such a price for a JPEG of a gray rock?

Here’s their museum-blurb explainer:

“Ether Rocks stands as a contemporary expression inspired by the Pet Rock fad of the 1970s. Both projects reflect the timeless appeal of humor, simplicity, and uniqueness in capturing the imagination of the public. By bringing the iconic Pet Rock concept into the digital age through blockchain technology, Ether Rocks invites us to reconsider the boundaries of value, ownership, and cultural significance in the ever-evolving landscape of unconventional trends.”

I’m not convinced they believe that — I suspect they are mostly just trying to make a buck here. 

But non-profit museums (who are presumably not trying to just make a buck) are taking NFTs seriously, too.

The prestigious Whitney Museum of American Art, for example, acquired its first NFT in 2018 and now owns 30 of them (only two of which were donated).

I’m not sure I understand why.

I've been to a lot of museums and seen a lot of things that are at least as dumb as Ether Rocks, some of which even had dumber explainers.

(That’s me looking skeptical in the Red Wings jersey at the top.)

So maybe Ether Rocks will someday be commonly considered museum-worthy art. I’m not one to judge.

But here's where they lose me: Why would a museum ever buy an NFT? 

If they’re not in it to make money and they're not in it for the signaling, why bother owning it? 

My suspicion is that museums insist on paying for NFTs because the purpose of their acquisition committees is to acquire things, and if they don’t acquire things, the committees will have no purpose.

If so, I don’t think they’ve thought it all the way through.

We usually mock the boomers for not understanding why anyone would buy NFTs, but in this case, the boomers are making the opposite mistake: What they’re not understanding is that they don’t have to buy the NFT.

Just display it! For free!

This is perhaps the defining innovation of tradeable JPEGs: NFTs separate ownership and usage.

The only reason a museum would therefore need to acquire an NFT is if they intended to display their ownership of it. 

And maybe that’s what they want to do!

But, if so, they shouldn’t be putting images of their NFTs on the wall. 

They should be putting their public keys on the wall instead — along with the NFTs’ public keys, their Etherscan transaction IDs and the URLs that the NFTs point to. 

This would make for the worst museum ever.

But it would be an accurate representation of what NFTs are.

(And funny, too!)

Most importantly, though, museum curators wouldn’t be subject to the fluctuating feelings about their collection that come with ever-fluctuating floor prices — money and art would finally be disentangled.

Friday’s Sotheby’s auction will of course do the opposite — Ether Rocks are only expensive because they’re expensive.

The Cavaliere would not need a museum blurb to explain it to him.

― Byron Gilliam

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