Gonna fly now
When NFTs were first being hyped, I misunderstood them as being mainly about intellectual property: There wasn't enough scarcity to go around to satisfy the demand for positional goods, so blockchains would be employed to create the lucrative contradiction of infinite rarity.
This is the "NFTs are nothing but a Name-a-Star registry" critique, which is dismissive in a way that tends to play into NFT advocates' hands. It makes it seem as though only avaricious predators, craven status seekers, and simple-minded morons would be interested in NFTs, but all that does it help foment the in-group, us-vs.-them solidarity necessary to NFT boosters — and to the crypto world more generally.
As Stephen Diehl pointed out here, crypto is incoherent as an asset class and better understood as a thinly veiled religion. With crypto's assumption of ever more fools to grow the pyramid,
these financial instruments leave the realm of reason and enter the cult-like world of MLMs and quasi-religious movements. Arguments for the non-zero valuation of crypto assets are all predicated on belief in infinities, circular logic, or faith in invisible hand of future forces yet unknown.
It's useful to have scornful infidels to point to in order to reinvigorate the wavering faith of your fellow acolytes, and the very vehemence of the critics becomes a proselytization tool too, proof that there is something to the whole crypto thing that threatens people.
The crypto world styles itself as an insurgent, upstart alternative to the "system" and seeks to recruit those who have been exploited or excluded by that system. It presents itself as a capitalistic alternative to "evil bankers" and the corrupt, cronyistic capitalism that has failed them. It represents the fantasy of a total break with the past, an opportunity to "get in on the ground floor" and become one of the cronies yourself. That is to say, crypto makes the same sort of pitch that fascism made in the 1930s.
In Hal Foster's book about surrealism, he mentions theorist Ernst Bloch and his claim that "not all people exist in the same Now." According to Foster, "The nonsynchronism that most concerns Bloch is the 'uncompleted past which has not yet been "sublated" by capitalism' but which is presently exploited by fascism."
Capitalism, through its bourgeois agents, as Marx and Engels put it,
has pitilessly torn asunder the motley feudal ties that bound man to his “natural superiors”, and has left remaining no other nexus between man and man than naked self-interest, than callous “cash payment.” It has drowned the most heavenly ecstasies of religious fervor, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom — Free Trade. In one word, for exploitation veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation.
The redemption in unveiling the "brutal exploitation" underlying everything — what was expected to justify it — was that everyone could get in on it. Capitalism never actually delivers on this; instead it generates vast and dynamic inequalities and cadres of broken, used up, and disposable people. But it must continually renew the expectation that one day you will be the exploiter and not the exploited.
This is one way of understanding Bloch's "uncompleted past": the idea that eventually everyone will be included amid the ranks of the ownership class and magically enjoy its zero-sum privileges. "For Bloch, fascism preys on class fractions displaced by capitalism and/or threatened by communism (e.g., déclassé youth, peasants, the petite bourgeoisie), fractions seduced by its 'primitive-atavistic "participation mystique,"'" Foster writes.
It seems like something similar is going on with crypto, and for similar people. This Mother Jones piece by Ali Breland makes that link explicit, asking, "Who goes crypto?" — an update of the famous question asked by Dorothy Thompson in a jingoistic 1941 Harper's article: "Who goes Nazi?" She concluded that "those who haven’t anything in them to tell them what they like and what they don’t" are the ones that go Nazi — i.e. people who need the market or a crowd or an algorithm to tell them what to do next — but along the way she also points specifically to those whose ambitions have been thwarted by the existence of an establishment.
That group is the one that Breland believes goes crypto, people who have been trained by neoliberalism to worship the cash nexus even as it has failed them. "The moral question upon seeing the gap between owners and buyers, between the poor and ultra-rich, between capitalist owners and workers," Breland writes, "is how do we end it? Yet in an economy where most people work long hours, are struggling to get by, and have deeply internalized the status quo, that question becomes: How do I get in? That’s how a million-dollar jpeg of a digital rock turns out to make sense."
So that is another way of understanding NFTs: as pure vehicles of speculation for outsiders, as a giant gambling racket or Ponzi scheme. The art attached to them is an alibi, a readily discarded pretense, no more significant than the illustration of the pip on an ace of spades. The real point is that it is a lottery you can enter to try to escape precarity, one can you can rig by recruiting more people into it.
Built into NFTs is the necessity to shill for them, which leads to disclosures like the one tacked to this Harvard Business Review article by Steve Kaczynski and Scott Duke Kominers. People who write enthusiastically about NFTs also typically own NFTs and seek to profit from their own enthusiasm. At its logical endpoint, it's the magical tautological circle exemplified by the idea of "manifesting": If you say something enough times, it becomes true. "I will be a dogecoin millionaire."
But Kaczynski and Kominers's article points to what for now, at least, seems to be the right way to view NFTs: not as property in their own right but as a mechanism for instrumentalizing surveillance. Here is how they put it:
NFTs don’t just provide a kind of digital “deed.” Because blockchains are programmable, it’s possible to endow NFTs with features that enable them to expand their purpose over time, or even to provide direct utility to their holders. In other words, NFTs can do things — or let their owners do things — in both digital spaces and the physical world.
If you stand that on its head, it explains how NFTs function as a kind of digital-rights management or a tracking beacon system — the Ethereum blockchain is not a star-naming registry but a would-be universal registry of ID badges.
When Kaczynski and Kominers say NFTs will "let their owners do things," it should be understood in the sense that they have the capacity to impose a permissioning system and terms of service on a far broader range of not just objects but experiences. That people can resell them serves a disciplinary function: You have to be complicit in the system on its terms to potentially recoup anything on your outlays for access.
Currently, this largely takes the form of "buy this NFT and you can join the cool-kids club!" But it is easy to imagine it playing out in the same way that software sales have gone: Once you bought software; now you pay monthly subscription fees to access software, conditional on the terms of service of its issuer. Owning a particular token can be made a prerequisite for permission to do things or use things: No reading an ebook without its token, for instance. No giving anything away without sending its original creator a royalty. No selling of anything to "the wrong sorts of people." No watching a pay-per-view stream unless every wallet in the room has the necessary tokens. And so on. As with "smart" functionality — which does much the same thing — it will be implemented in situations where it doesn't benefit the participants at all but serves outside interests. They will "communities" that people will be coerced into joining because they want to go to a concert or a basketball game and won't be able to get tickets otherwise.
NFTs are a way to record all of the "motley ties" that bind people to one another on the blockchain and make them usable by others, freely tradable. In a maximal vision of their potential, every obligation we might ever feel toward other people could be thereby codifed and traded, alienated and priced, rendered into "smart contracts" and made explicitly contingent on profit considerations. Perhaps the only thing more dehumanizing than the cash nexus is a programmable cash nexus.