NFTs are the future.
If you want to get another tease, you're guaranteed to make
some money because it's new, it's fresh.
NFTs are one of the latest and greatest things.
It's really the work you already do, but you can make more money from it.
It hasn't been determined
what their highest value is going to be yet and what their highest level of creativity is.
Over the last year the letters NFT have truly hit the cultural zeitgeist.
Crude pixelated faces, cartoon apes and thousands of other variations have been selling for huge sums online
bolstered by major art institutions.
... and selling at $10m ...
And celebrity endorsements.
I'm so proud. I love being part of this community and being a voice and sharing
my platform and just getting the word out there because I think it's just such an incredible thing
to be a part of.
Believers in NFTs say they are revolutionising an art world that has remained an
elite space for decades.
This is a much, much more accessible place for a whole heap of potential customers.
We get to hide behind an avatar which allows us to express who we really are.
But as the hype continues to build, many are asking whether this is really all about the joy of the art or a
speculative bubble set to burst.
You can't deny that this is at bottom, a get-rich-quick scheme.
Edward Zipko is the co-founder of Super Chief which bills itself is the world's first in-person
NFT art gallery.
He's hoping to take advantage of an industry now worth $17b.
We've been a gallery for about 10 years, we've started showing digital art back in 2016 and the reason
we got super into NFTs is their artist royalties.
This is the first time that artists who create anything
that can be represented digitally.
It's the first time they can get royalties on their artwork.
This is like a really, really big deal.
How would you buy something then? Can you show me how it would work?
Absolutely.
So I would take my smartphone and I would put it right to there.
Pop that. If we wanted to buy that,
we would go right there and if I press that I would buy it and it's done.
The payment hits the parties involved directly.
There's no accountant that needs to send out an invoice,
it just happens.
One of the things that critics say, and there's quite a few,
is that some of the projects are driven by hype by celebrities, who are trying to pump up the value of
their own thing anyway I mean, do you think this is potentially a bubble? Is there a risk with all this?
I think it's important for people when they're buying into all of the NFT projects that are
available, doing actual research before you buy because you can treat this like
a casino, you know, and just throw money around and then cry yourself into a grave or you can
pick something that you actually love and you know that there's like an artist and a career behind it.
NFTs have made digital art more prestigious but most people are drawn less to one-off
works by individual artists.
Instead 80% of images sold as NFTs are collectables
like the sets of cartoon faces that celebrities have variously been showing off and hawking online.
These collectables have algorithmically defined variations in their colour and features and the
artist is often unknown.
It's more like collecting baseball cards than fine art.
One of the earliest of these collections was CryptoPunks, a collection of 10,000 unique pixelated faces.
In 2021, Christie's
sold nine CryptoPunks for $16.9m.
It was a moment that thrust NFTs into the mainstream
art world but it's not just the uber rich and the celebrities who have benefited.
I've come to a convention called NFTLA to meet those who are putting everything into this industry.
For many here, this isn't just about owning digital art but something much more fundamental – our very identity.
Our digital lives are becoming increasingly important with relation to our physical lives.
We're spending, you know, on average eight to ten hours looking at our cell phones each day.
Jason, who online goes by the name Jason the Ape, got in early on the most valuable of these NFT
collections, the board ape yacht club.
So you basically bought yours for $250
and what are we talking now ballpark figure?
Like, $400,000 floor price.
It's amazing. – Yeah.
Half a million off the back of this. – Yeah.
For Jason the picture he owns
isn't just a piece of art it's an avatar that he uses to define himself online and something which
gives him entry into a community of other board ape owners.
My ape is an inner reflection of myself.
He loves to talk, he loves the party, he loves to approach strangers, he loves smoking pot,
that's part of his character.
It's like, the kind of purest form of yourself, almost.
You don't have to put up any pretenses that we have to sometimes in society.
Exactly.
That is exactly it.
So all of a suddenIi have this freedom to be the truest version of myself.
At 38 years old I dyed my hair pink and I felt freedom for the first time, like,
all because of this experience.
I didn't have to pretend to be something I wasn't, I could be who I was.
Who I always have been and use this picture to express that fully now.
I would love to give it to my kids someday and have him continue the legacy of Jason the Ape.
You know, NFT art, it's not all just about the image, it's the impression I'm getting and
learning here, it's about community that comes around that and also like value you've added.
Is that right? – Absolutely, I mean, I just walked into the conference
ten minutes ago and I bumped into an ape who I met a year ago and immediately I'm like, hey I have
something for you, that's community is that you're always looking out for someone, you bump into them
you know, you're going to take care of them just because we're in the same spirit,
we have the same universal energy that we're trying to bring something positive into the world.
The convention hall was full of creators almost all of whom were men, looking to mimic the success
of the bored ape yacht club.
The promise here is that owning one of these NFT profile pictures
will signify to the world how you really see yourself.
So people are dissociating themselves
from their real world identities because they want to be known more about what they stand for
than who they are as individuals.
A lot of people have felt estranged from from the real
communities and right in real life communities and this has been a space that allows them to go
online and feel like they are part of a, I guess, like a digital tribe.
Otto Hans and Tyler Gary
are involved in an art project called SupDucks, a series of ten thousand cartoon ducks that has
gained significant popularity.
There's 13 people working behind the scenes at SupDucks and it's already netted them more than $9.4m.
SupDucks. We're pretty much just a creative outlet,
we're making a cartoon, we have a music label, we got a game in the works.
Who is buying these?
A lot of people, they're all over, they're walking all over the place but
we sold out in like, I think, three hours, four hours when we dropped.
Gary Vee has a duck, there's a lot of celebrities with ducks ... Reese Witherspoon, Snoop Dogg ...
This is my duck.
And he's a rapper, he's got a flower duck. – What does he rap about?
Pretty much like, NFTs
and party stuff he's just your average LA rapper but he knows about NFTs.
Otto and Tyler have created an entire world around their SupDucks, a chat show, an animated cartoon,
a lifestyle but it's not just about entertainment, it's all carefully engineered to create hype and
word of mouth around their project.
And as the prestige of that club increases, so does the value of your NFT.
Sunil Singhvi works at Rarible, one of the main platforms people use to buy and sell NFTs.
Maybe he could help me understand why some of these images demand such high price tags.
When we think about the value it might be kind of crazy that you go in and go, oh gosh,
like, there's all these items but they've all got completely different price points why is that?
I would probably say to you it's quite similar to going to any mall, any Westfield anywhere in the world
and being like, well, they're all t-shirts, why is one 299 in Hennes and one like 80 pounds here?
The value is in the sort of ownership of what people perceive the value and quality to be.
To me it's not bizarre or fluke that the profile pictures blew up because it's a chance to show
off identity and it might be that process of, I got it really early it might be that process of,
I did well in life and I bought something expensive and I would like to show you.
But I think those are really common human traits and I think that you know there's an element of
like, oh we shouldn't show off but ...
I suppose going back, you know, you might buy a piece of art because
it connected to you, like it might be a boat on the seaside and you think oh that's lovely,
I want to look at that.
Has that changed with sort of NFTs and the kind of art that's
available now where it is a bit more, this is what it says about me?
I don't think we've lost meaning,
I don't think we've lost artistic talent but I do think there is a proliferation of NFTs that
are sold about community and utility where the actual art is perhaps not as subjectively good.
The flip side of that is, I think, we've got a really, really nostalgic view of art and the
art sector which has of course been unbelievably white unbelievably gate kept for many, many years.
This is a much, much more accessible place for a whole heap of potential customers who maybe
won't ever find their favorite artist at a big auction house or displaying in a fancy gallery.
I think NFTs will take people into the gallery far quicker than old established businesses.
Many of the people I met were different from the traditional art hoarders that Sunil described.
But there's a flip side to this, the industry is rife with fraud and money laundering.
Many NFTs are plagiarised, fake collections or spam.
Some projects get rug pulled
where an NFT creator disappears with the money that's been invested.
And when the valuation of the art is based so much on hype and speculation, it makes the whole thing vulnerable to a crash.
Journalist Jacob Silverman is one of the most prominent critics of NFT and cryptocurrency.
Well, what troubles me about what we're seeing with NFT world is that it seems rather commercialised,
rather superficial and rather like you matter as much as what you own the value of what you own
and your status and sort of in this kind of new social web three world and to me that is not
a form of economic freedom, that's not really a culture that I find enriching or animating,
and it's not really the principles that I would want to promote, I think, or that
you know, some perhaps a more idealistic earlier generation of internet innovators had in mind.
How much of this is actually about the art?
You know, if Ii put a random percentage on it maybe say 10% to 20%
because I think you can't deny that this is at bottom a get-rich-quick scheme just like a lot the crypto is.
The underlying economic principle here is the greater full theory which is that
one of these things whether it's an NFT or a crypto token is only worth as much as the next
person decides it's worth.
The person I sell it to, obviously that lends itself to sort of MLM
like mechanics and to ponzi schemes and things like that, but that's what you're dealing with at
the end of the day when this stuff doesn't really have much fundamental economic value underlying it.
Back in LA it was easy to get swept up in the excitement and enthusiasm around NFTs.
Otto and Tyler were putting on a lavish party for SupDuck owners.
There was a real sense of community here although what that community actually stood for, outside of owning a SupDuck,
was unclear.
We're like family, you know, community is the foundation of everything that we're doing.
So only 9% of the world knows what an NFT is which is insane and like when I
heard that I was like, sounds like money bags to me you know like, sounds like a check.
Is it about more than just making money?
I'd say it's a 50/50 on that.
It's fun to make money but it's about like what you do with that money,
you know like, I get to buy my mom cool shit,
I get to go on vacation with my friends and I was never able to do that.
The biggest thing for me it's going to give power to the people, it's going to give artists, musicians, people that are just like
by themselves in their room, opportunities that they never would have thought of.
Otto and Tyler like many other NFT artists had managed to make life-changing money outside
the traditional art world and you can't blame them for wanting to take advantage of a burgeoning industry.
But to me it all felt a little empty.
The talk of community and technological revolution
is all well and good but what does it say about a community when you have to buy access to it.
And when the hype dies down what will these images actually be worth?
NFT enthusiasts may believe that they are creating a different world but ultimately it's a world driven by
forces that have been around for a long time.
The human desire for status and ultimately profit.