atomicpoet on Nostr: People dislike NFTs because they reveal an uncomfortable truth: they’re the digital ...
People dislike NFTs because they reveal an uncomfortable truth: they’re the digital equivalent of something that already exists in the physical world.
The value of a painting, for example, lies in its nature as a non-fungible asset. Wealthy individuals purchase paintings not necessarily for the art itself but as a way to store and transfer money.
In the best-case scenario, they donate the painting—say, a $30 million piece—to a museum, claiming they’ve done a public good by allowing everyone to enjoy it. In return, they receive a substantial tax break.
In the worst-case scenario, they buy a painting, hide it in their luggage, fly to another country, sell it, and walk away with a large pile of money, often tax-free.
That, in essence, is the art world. Its existence revolves around the fact that paintings are non-fungible assets.
The uncomfortable reality is that society has largely allowed this to happen because we don’t want to admit that the true value of art isn’t in the work itself but in its non-fungible nature. As long as it remains non-fungible, it holds value.
This is where NFTs come in. Some people attempted to apply this concept to digital tokens, and it’s hard to blame them for trying. Digital tokens are far easier to transport than physical paintings, and NFTs are less prone to damage. For a brief moment, there was immense demand for NFTs because they offered the same benefits as physical art, but in a more convenient form.
However, NFTs faced a fundamental problem common to much of the internet: the lack of gatekeepers. Anyone with Ethereum can mint an NFT. There are no barriers, no gatekeepers deciding which digital tokens hold value.
Contrast this with the art world, where everything of significance happens because gatekeepers—curators, critics, and institutions like the Louvre—deem it valuable. Without these gatekeepers, much of it feels meaningless.
The art world relies not only on non-fungibility but also on social status. Value is bestowed when someone with authority at an influential institution declares something important. Only then can these works gain value, at least to those willing to invest in them.
So, while NFTs attempted to replicate the art world’s dynamics, they lacked the structure of status and authority that gives traditional art its perceived value. That, in my view, is the state of both the art world and NFTs today.
The value of a painting, for example, lies in its nature as a non-fungible asset. Wealthy individuals purchase paintings not necessarily for the art itself but as a way to store and transfer money.
In the best-case scenario, they donate the painting—say, a $30 million piece—to a museum, claiming they’ve done a public good by allowing everyone to enjoy it. In return, they receive a substantial tax break.
In the worst-case scenario, they buy a painting, hide it in their luggage, fly to another country, sell it, and walk away with a large pile of money, often tax-free.
That, in essence, is the art world. Its existence revolves around the fact that paintings are non-fungible assets.
The uncomfortable reality is that society has largely allowed this to happen because we don’t want to admit that the true value of art isn’t in the work itself but in its non-fungible nature. As long as it remains non-fungible, it holds value.
This is where NFTs come in. Some people attempted to apply this concept to digital tokens, and it’s hard to blame them for trying. Digital tokens are far easier to transport than physical paintings, and NFTs are less prone to damage. For a brief moment, there was immense demand for NFTs because they offered the same benefits as physical art, but in a more convenient form.
However, NFTs faced a fundamental problem common to much of the internet: the lack of gatekeepers. Anyone with Ethereum can mint an NFT. There are no barriers, no gatekeepers deciding which digital tokens hold value.
Contrast this with the art world, where everything of significance happens because gatekeepers—curators, critics, and institutions like the Louvre—deem it valuable. Without these gatekeepers, much of it feels meaningless.
The art world relies not only on non-fungibility but also on social status. Value is bestowed when someone with authority at an influential institution declares something important. Only then can these works gain value, at least to those willing to invest in them.
So, while NFTs attempted to replicate the art world’s dynamics, they lacked the structure of status and authority that gives traditional art its perceived value. That, in my view, is the state of both the art world and NFTs today.