It’s my 31st birthday today! Instead of meandering about the implications of being ‘in my thirties’, I decided to mint the world’s first Pancake Art NFT. In this post I want to talk about NFTs – Non-Fungible Tokens – and I want to explain what they are, how they work, why I minted one, and what I think it all means.
Oh, lord. Where do I begin?
Y’all remember, like…less than a month ago, when every major news story was about GameStop’s stock price? Here’s a video that does a great job recapping that saga so that I don’t have to.
Now, when this all went down, my brain lit up like a Christmas tree. I’ve been learning a lot about money, finance, and cryptocurrency over the last few years (at least since the price of bitcoin spiked to almost $20,000 in December 2017) and I think I’ve been subconsciously awaiting a cultural catalyst. When I learned what was going on with GameStop, it seemed like it had…catalytic potential. Like it might trigger a chain reaction of a sort.
“You mean to tell me a decentralized network of retail traders has figured out how to collectively use mimetics to transform their own ability to access capital, while simultaneously rebuffing the legacy elites who are largely responsible for our world being as twisted and unfair as it is?”
My logic: People – like, a not insignificant amount of people, shit was all over the news – found a glitch in the system that they can exploit to simultaneously punish bad actors and potentially earn a killing in the process. This on its own is enough to make people wake up and realize that money – the economic hard line that has determined who prospers and who suffers, seemingly arbitrarily, for our entire lives – is just a big video game. But beyond that, once the pieces started to fall into place that all these organizations, trading apps, and investment firms were on the same team (thrown in our faces when Robinhood suspended the buying of $GME to ‘mitigate volatility’), not only has the curtain been thrown back, but it’s revealed an unfair racket where the folks with all the power will change the rules mid-game if it seems like they might lose one time. You know, like assholes. They’re unfairly gambling billions upon billions of dollars of imaginary money, actively attempting to destroy businesses, all while that same money could be used to help people who desperately need the help, as a pandemic continues to ravage the population and wealth inequality drives the world to madness.
These themes have been present throughout my self-gathered cryptocurrency education. Cryptocurrencies – of which Bitcoin is the most prominent, though there are hundreds if not thousands of others – flip the incentive structures of traditional finance on their head. Rather than deriving their value from state-enforced violence, as all traditional monetary systems do (your money is worthless if the government that issues it isn’t good at killing people), cryptocurrency gathers value by cleverly exploiting human belief. These computer networks incentivize their own creation by rewarding early participants with tokens that can be verified thanks to the nature of the network. If people think the token will be worth something, then they have a reason to get in early, which causes the network that secures the value of those tokens to come into existence and fulfill its own prophecy. It’s a bit circular, but once you start the machinery it becomes very, very hard to stop it, evidenced by the fact that bitcoin is over a decade old, has yet to fail, and is now inching close to a value of $50,000 per unit.
If you want me to explain this cryptocurrency stuff in-depth, I’m working on a video essay which you’ll be able to watch by following Anthromancer. For now, all I really want to point out is that cryptocurrency – as a technology – offers regular people a non-violent weapon to wield against entrenched legacy systems of greed and domination. It’s a new game with new rules that the old money vampires don’t know how to co-opt. They might never figure it out – the game is fundamentally different, from the bottom up, and the opportunities for regular people without access to legacy capital are through the freaking roof.
Which brings me to NFTs.
NFT stands for ‘Non-Fungible Token’. The word ‘Fungible’ is used to describe any valuable asset which can be easily replaced with another identical asset. A dollar bill is fungible because you don’t particularly care about the dollar that you have. If I have a dollar, and you have a dollar, and we swap those dollars, it’s kind of like nothing happened. The tokens themselves have nothing unique about them. A house, on the other hand, would be considered ‘Non-Fungible’ because it isn’t a valuable asset that you can easily switch with another one. That house is unique, it has unique issues and charm, and besides they’re kind of hard to move around. A painting would also be ‘non-fungible’ – it is something unique, with a story, and it isn’t nearly as easy to simply ‘exchange it’ with another painting even if they have similar or identical monetary values. They’re different things. They make you feel different.
Cryptocurrencies are generally seen as fungible assets. People don’t really care which Bitcoin you have; they all have essentially the same value. There may be some odd ‘collectors’ who find value in getting a bitcoin from block 1 or something (don’t worry about it) but for the most part 1 BTC is 1 BTC and 1 satoshi (the smallest unit of bitcoin, approximately 0.00000001 BTC) is 1 satoshi. It’s fungible, see?
This changes when you bring art into the mix.
The fastest way to summarize NFTs is that they are digital media – such as a .png, a .gif, or even video or audio – with a hard-coded ownership certificate. An NFT is a picture with its owner encoded on a blockchain ledger, very similar to how the bitcoin network tracks who owns bitcoin and how much they have.
Now if you’re like me, you’ll read that last paragraph and think, ‘What? Who cares?’ My immediate reaction to learning about these NFTs was that they didn’t make any sense. The ownership certificate does nothing to prevent piracy; it’s still a digital image that just about anybody can look at, right-click, and save to their hard drive. It can still be infinitely reproduced if someone wants to steal your art and slap it on a t-shirt. And on top of all that, since these Ethereum smart contracts (I’ll tell you when you’re older) use the ‘proof-of-work’ hashing protocol – ‘minting’ an NFT literally gives a substantial carbon footprint to a piece of art that otherwise would’ve been lighter than air in the digital realm.
So like…What? This has to be a fad, right? Just some goofy, flashy new way to overcomplicate the process of creating and selling art, right?
Nevertheless, one of the first lessons I’ve learned in crypto is that this game rewards the fastest movers. “Fortune favors the bold.” So when my friend Cory messaged me about the idea of making pancake art NFTs, I decided to set my fear, uncertainty and doubt to the side for a bit, do some googling, and figure out what was really going on here. I’d just seen this cultural catalyst in the form of the $GME stock market madness, I’d been following the crypto markets and watching as Elon Musk caused Dogecoin to skyrocket in value overnight, and I was just…in this world enough to overcome my usual anxiety and actually learn something. Maybe I could pioneer some shit? Maybe I could accidentally stumble into a $100 investment that changes my life and helps me pull all my friends out of debt? Maybe I can just have some fun and learn, instead of letting my anxiety dictate my future all the time? I’m 31 now. I want to like who I’m becoming.
So I googled it.
I found a website called Rarible that enables users to mint NFTs. This process was not extremely easy for me to figure out. As a blockchain platform, the ‘username/password’ stuff is a bit unintuitive and requires new considerations that my brain isn’t used to thinking of. I had to own Ethereum (fortunately I’d bought some through Coinbase recently). I had to have a special cryptocurrency wallet that interfaced with the Rarible website and my own browser (my first attempt had some kind of a glitch and I accidentally vaporized $25 worth of ETH, and almost gave up). I had to have a file I’d like to turn into an NFT – fortunately I still had files from our pancake art sticker packs, and I decided to go with my Joker pancake (because of the class warfare I guess). The minting process was way more expensive than I expected, too! Maybe it was because traffic on the Ethereum network was spiking, but I ended up having to pay something like $70 worth of ETH to mint the damn thing, not including the $25 that was lost forever (never mind the fact that in 5 years the ETH I burned might be worth like $50k). The whole process took me all morning to figure out – posting to deviantART this was NOT.
But then, I refreshed my browser, and…there it was.
I set the price at 1 ETH – approximately $1800 at time of minting – because I guess I didn’t really care if it sold or not. Looking at it now I think that it might. Going through this process gave me somewhat of a different perspective. Sometimes understanding something is just a matter of immersing yourself in it, in the language and the communities around it, until things start to click. And last night, they did! It dawned on me: Someone is going to buy this NFT because in so doing they will become the first person on earth to have purchased the first pancake art NFT in existence, and that fact will be embedded onto the Ethereum blockchain for so long as that network maintains its integrity. Something about that calculus makes sense to me – because the value isn’t the ownership of the token, it’s the ownership of the story.
Who is your favorite artist, in the whole wide world? Who is an artist who you truly respect, whose work makes your heart sing, whose presence on earth now or in the past has given a sublime and incalculable value to your experience of living? Gustav Klimt? Vincent Van Gogh? Georgia O’Keefe? Frida Kahlo?
What if you could’ve bought an NFT from them? What if you could’ve been THE FIRST PERSON to ever patronize their work, and have that purchase – that story – hard-coded into an immutable historical document that proves exactly who made the purchase, when, and how much they paid?
The status doesn’t come from owning the thing – it comes from being bonded to the artist.
Beyond that, part of these NFT smart contracts makes it so that the original artist can be guaranteed a % royalty if and when the new owner decides to sell the piece again. If someone buys this Joker NFT from me, I’ll get 1 ETH. If, somehow, the piece becomes more valuable (as things like this tend to do) and someone sells it again, the smart contract will kick in and I’ll be guaranteed 10% of whatever the next sale goes for. Maybe I’ll get another 1 ETH! Who knows? And the chain of owners of this digital ‘un-thing’ extends, building out the story of this piece of media, and the story of the artist that created it. Giving more energy and power to me to create more beautiful art and explore more strange and revolutionary ideas in this strange and revolutionary space.
Like…it clicks for me now. I don’t feel like I’m flying blind without understanding what’s going to happen in this space.
NFTs are not a fad. They are here to stay. And I’m glad they’re so expensive to mint – hopefully, that’ll keep people from abusing them. I am not in a rush to mint a ton of these things – I’m incentivized by their very cost to make them meaningful; to come up with ways to make these stories (the thing people are actually buying when they buy NFTs) interesting. With this knowledge going forward, I feel pretty good that the next NFT I mint is going to be every bit as interesting as this one, if not more so.
I gotta tell ya: overcoming my lifetime of anxiety to figure out how this weird, new, complicated thing works, and having enough of an understanding to share it all here and feel like I’m able to make something weird and complicated make sense to other people?
I think 31 is gonna be my year.
Thanks for reading, everyone. I’m grateful to be here and looking forward to the future. I hope you’ll cultivate your curiosity with me.