The NFT Origin Story
BROOKE GLADSTONE From WNYC in New York, this is On the Media, I'm Brooke Gladstone. 21 months into the pandemic, the economy is recovering in a way that can only be called uneven.
NEWS REPORT The global supply chain crisis continues to slow the economic recovery from the pandemic and is threatening to continue into next year.
NEWS REPORT The Federal Bureau of Labor Statistics reported this week that 4.3 million U.S. workers quit their jobs in August. That's the highest number of out now job quits since the tracking started way back in 2001.
PRESIDENT BIDEN Today's economic report showing unemployment continued to fall, but consumer prices remained too high. Tell us the American people have missed this economic crisis. A recovery is showing strong results, but not to them. They're still looking out there? Everything from a gallon of gas to a loaf of bread cost more, and it's worse [END CLIP]
BROOKE GLADSTONE Amid it all, one sector is doing smashingly, exceedingly, gobsmackingly well.
NEWS REPORT Let's talk crypto. The market now was more than three trillion dollars. We understand.
NEWS REPORT Bitcoin, well, if you didn't think it could go any higher, think again. If you think you missed the boat, guess what? Might not be too late?
NEWS REPORT We got bitcoin and Ethereum at record highs. We even have the laggards. Litecoin up 22 percent.
NEWS REPORT Tim Cook says he's a crypto investor and Apple is looking into digital currency features. [END CLIP]
BROOKE GLADSTONE Yes, it's crypto season, again, and this time local politicians are staking their claim as leaders of this brand new future.
NEWS REPORT Miami's mayor is betting big on a growing tech community and especially crypto. Even announcing the city's own cryptocurrency a few weeks ago. Miami-coin.
NEWS REPORT Incoming New York City Mayor Eric Adams wants schools to start teaching students about cryptocurrency after vowing to take his first three paychecks in bitcoin. [END CLIP]
BROOKE GLADSTONE Even the animal kingdom is getting in on the game like Mr. Goxx, a hamster who some months ago was outperforming the S&P 500. Really?
NEWS REPORT We don't know who Mr. Goxx human handler is, but we do know where he makes his trades, "The Goxx Box." It's rigged to automatically trade crypto, then it can enter either of the tunnels. The decision tunnels: buy or sell. [END CLIP]
BROOKE GLADSTONE Amid this crypto feeding frenzy, one form of accumulation stands apart from the rest.
RONNIE CHIENG NFT's, their non-fungal toenails or naked flag tricks or nonfungible tokens. Whatever they are, everyone is talking about it.
[MUSICAL PARODY OF EMINEM "WITHOUT ME"]
SNL [SINGING} ]Now. What the Hell's an NFT? Apparently cryptocurrency. Everyone's making so much money. Can you please explain what's an NFT? I said, What the hell's an NFT? [END CLIP]
BROOKE GLADSTONE NFTs are unique units of data that can be linked to images and other types of media for purchase.
NEWS REPORT Right now, NFTs are very much focused on art. [END CLIP]
BROOKE GLADSTONE Last week, a buzzy conference all about NFTs came to New York, and the city's tech journalists poured in. At the times. Journalist Kevin Roose met a crypto enthusiast who likened the event called NFT NYC, to Woodstock. We sent our correspondent, Micah Loewinger and you'll hear from him later, but first, how did the non-fungible token ever come to be? He may feel ambivalent about his invention, but it all begins with Anil Dash, who today is the CEO of the tech company Glitch, and his collaborator, artist Kevin McCoy. Welcome back to the show and Anil.
ANIL DASH Thank you so much for having me.
BROOKE GLADSTONE Speak to me of how NFTs came to pass and your role as progenitor.
BROOKE GLADSTONE Started 2014, the event called Seven on Seven that annually connects artists and technologists to spark new ideas. You were paired with artist Kevin McCoy. What was the problem you aimed to solve?
ANIL DASH Both Kevin and I had been poking around the edges of this idea of digital ownership. Kevin's motivation he and his wife, Jennifer, are very accomplished artists, and the work's been exhibited everywhere, and they have collectors very interested in their work. And so they had a very visceral need for, when you make digital art, how do you transfer ownership to a collector and say this is the original that you have?
BROOKE GLADSTONE They were getting ripped off?
ANIL DASH Well, I think they were worried about it. They also want to make sure that collectors who bought their work felt like they got a real value wasn't just something that somebody is just going to reblog this on Tumblr and then the work isn't original anymore. And so it was a real concern. I've long been interested in equity and ownership, especially in digital space, especially for creators and artists. The big deal auction world was not something I knew really much about until the consultancy I worked with had started working with some of the big ones, and I learned how much they very earnestly cared about provenance and title and ownership and whether it was, you know, all the way traceable back to the original creator. They had been thinking about these problems for hundreds of years.
BROOKE GLADSTONE So you came up with your idea with McCoy in the wee small hours of the morning?
ANIL DASH Yeah, yeah. They have what's called a hackathon where you're supposed to stay up all night coding or something. And the truth of it is we're both middle aged dads. So at that point, we put a couple of hours in and we got something working and we're both like, OK, we're going to go home, go to bed and we'll pick this up in the morning. And it was pretty amazing because we realized that all the pieces had been laid out there and all the technology was available.
BROOKE GLADSTONE So what was it?
ANIL DASH Well, blockchain had already been hyped within tech circles at that point.
BROOKE GLADSTONE What I understand the blockchain to be is a kind of technology of record keeping for facilitating cryptocurrency transactions.
ANIL DASH Mm-Hmm. It could do some things that systems that came before couldn't and primary among them was conceivably it could certify that a certain digital work was unique was original.
BROOKE GLADSTONE The whole point with blockchain is you have a copy of the same verifiable record. You know that something is real and not forged. Right?
ANIL DASH Yeah. If everybody had a copy of the same spreadsheet and you could verify that any change was made was made in all of them, then one of the things you could do is you can keep track of art in there and say, This is this original artwork. This is who made it and this is who owns it. The idea was to use a blockchain called Name-Coin, which is similar to bitcoin, that everybody's heard of it. But the thing about name coin is it had a little bit more room to store information, including information like, Hey, here's the original location of this artwork and who owns it. And so they gave us just enough space to work with, and we made a system where you could take an image in. The first image was actually art that Kevin and Jennifer McCoy had created.
BROOKE GLADSTONE You bought it.
ANIL DASH Yeah, I did. So as I said the next day, after we'd gotten the code working, we did a demo. And during that demonstration, since Kevin made it, I was buying it and I actually gave him $4 in cash out of my wallet. That's all I had. And he said, Now you own this and we transfer the title on the blockchain. And that was what I've been told later. Very inspiring to a lot of folks.
BROOKE GLADSTONE You didn't call it a non-fungible token.
ANIL DASH No.
BROOKE GLADSTONE You called it a monetized graphic or a monograph.
ANIL DASH It was a bit of an ironic name, which hasn't probably aged as well as I'd hoped. Was this tongue in cheek thing of like, no artist would ever call selling their work, monetizing their graphics. It was deliberately absurd. Of course, as soon as the tech people started hearing about it, you know, the tech companies went to the next week. They're like, Sure, monetize your graphics.
BROOKE GLADSTONE Not funny.
ANIL DASH Yeah, exactly. Just very straight, faced-ly. And to his great credit, Kevin took the idea and ran with it and actually built a company and a product and a platform around that over the following years.
BROOKE GLADSTONE For most of us normal folks, the digital elephant in the room is the fact that you were trying to create a form of ownership for digital properties, digital art. But anybody who wants to can just save a picture identical to the one that you have claimed is the first one and the one that you own.
ANIL DASH Yeah. Well, I recently bought a photo print from an artist I love, and the original was actually a digital photo. But because it was the artist and I got the certificate of authenticity and got it framed at the gallery they sold it from. It was a lot more expensive than it would have been had I just printed that thing, you know, off of a website, right?
BROOKE GLADSTONE I've paid a pretty penny for digital photographs. They're beautifully printed,
ANIL DASH But conceivably you could have done that on your own. You could have taken the original photo file and print it yourself.
BROOKE GLADSTONE I didn't have it, but I take your point.
ANIL DASH This is the thing that today's NFT advocates talk about a lot, which is even if you made a pixel perfect copy of the Mona Lisa, it doesn't mean anything because the original has social, cultural, historical value. Now, I do not pretend that most of the art being created in NFT's, is the Mona Lisa. A lot of it is deliberately not supposed to be pushing the boundaries artistically. But we have consensus that art has value because of context and because of community, and because we sort of agree that it does. And I think a lot of the NFT advocates are advocating the same. They're sort of saying, we're not deluded, that you can't just go and make a digital copy of this file. But the fact that one of those that first original before it was copied can be verified as being owned through the system confers some kind of value. It gives some kind of uniqueness. The others are all copies that are the same. This one has been tied in this way to the blockchain, and as someone who collects art, that makes sense to me.
BROOKE GLADSTONE You had written off your project of making verifiably unique digital artworks as a footnote in internet history. You never even patented it, but in 2021, it's now called non-fungible tokens.
ANIL DASH Non-Fungible token as a name. It's not something I would ever come up with. It came out of a very technical discussion of people on a particular blockchain called Ethereum.
BROOKE GLADSTONE The word art is completely extirpated.
ANIL DASH That's right. The fact that it got applied is almost a brand name to the art trading on it is awful. It's bad for artists because it's hard to understand. I think it's been used to exoticize this for consumers, so they feel like it's a little more magical than it is. And I would rather they'd pick something mundane and functional as a name. But you know, that ship's already sailed. But I think if you give it an exotic technical name that makes people feel like I can't possibly understand this, that lets you sort of pull the wool over their eyes around some of the dynamics around it.
BROOKE GLADSTONE We saw that in the run up to the 2008 crash.
ANIL DASH Yeah, or the dot com bubble in the 2000s. The other thing is, as will always happen in a new technology, there are these opportunists who came in and have made copies of art that succeeded. That actually was connected to the people in the community where they sort of said, Well, it's really popular to do like pixel art of animals. And what they called generative art, which is a machine made art. And I love generative art. I have collected pixel art pieces. This is something I've cared about for many, many years and funded the work of. I don't think most of the people buying cloned generative art in the NFT world are in dialog with decades of pixel art that came before. I think they're seeing these as assets that they hope appreciate. It's a financial instrument.
BROOKE GLADSTONE The art market in general has long headed in that direction. Lots of people take art and put it in a warehouse. Yes. Temperature controlled, and they never even look at it.
ANIL DASH That's right. So I fear that we've really, really quickly replicated the worst of the physical gallery art collecting world.
BROOKE GLADSTONE Why is this suddenly the basis of a billion dollar market? Who are the buyers and why are they buying?
ANIL DASH There are a couple of cohorts. I think the one that's most visible is a group of people that is overwhelmingly pretty young, overwhelmingly pretty male. For them, a lot of this is actually about community. So they're going online, psyching each other up about, Hey, we're all going to make some money and get rich. But also they're very genuinely greeting each other and supporting each other and forming a home for each other that is not as antagonistic as the gaming world. And if all along the way they feel like they're supporting art and they feel like they're going to make some money? Those are even better. But I think a lot of ways it's sort of the community driver of it.
BROOKE GLADSTONE But I think you're leaving something out.
ANIL DASH Mm-Hmm.
BROOKE GLADSTONE It's not just guys supporting each other for fun. These people are generally buying this stuff with crypto money. Money that there aren't a lot of places yet to spend elsewhere.
ANIL DASH That's a huge factor. There's all these things you can't spend this money on.
BROOKE GLADSTONE You can pay the New York mayor for at least a little while.
ANIL DASH We'll see. This's a tangent, but if Eric Adams is able to get payroll processing systems in the city of New York to adapt to an entirely new currency in the span of a couple of weeks, I would be shocked and impressed. But putting that aside, I think there's this accumulation of presumed value that can't go anywhere. This actually mimics the income inequality structure in our whole society, where billionaires are so rich, they don't have anything to do except buy rocket ships and yachts. So if you are crypto rich, you can't buy real estate, you can't buy most other commodities. Art is an area that you can funnel it into. And so I think some of that is just this enormous amount of assets being put to work. There's also huge incentives from the power players in the tech industry, especially the investor class, who want to prove that crypto is a legitimate thing. So they've said, 'Oh, finally, we found a consumer use for this because we've been doing this for a dozen years and there hasn't been a single app that people want to use this for.' You could be somebody well-intentioned who just wants to be in community and support artists and be as much a part of this community as the most opportunistic grifter there. And I think that's a tough thing for us to sit with because it's not this bright line distinction.
BROOKE GLADSTONE There are a handful of really big NFT projects, right, that our listeners might have heard of Bored Ape Yacht Club, CryptoPunks. Describe a couple and why the crypto world is so enamored.
ANIL DASH I would add one more to the list, which is Beeple's collection of works, which was the largest sale of an NFT ever.
NEWS REPORT The buyer paid more than 69 million dollars. Beeple created and posted a drawing every day for the past 13 and a half years. And this digital collage of all five thousand of them is the piece [END CLIP]
NEWS REPORT The Christie's sale made him the third most valuable living artist after David Hockney... [END CLIP]
ANIL DASH One thing you'll find common across all of these NFT efforts is they're very much meme art selling again, mostly to young men who have grown up in the meme culture of Reddit and 4chan. And then there's a sort of inherent irreverence to it. There's there's no aspiration to in these works dialog with art movements that have come before or even what is sort of vaunted as the cutting edge of digital art, today. They're instead very structured and repetitive. CryptoPunks are very low resolution pixel art profile of a person's face, variations on a very simple theme, and they'll change their hair color or the eye color or the skin color or what have you. They're all very, very similar. From a creation standpoint, and this is the sort of thing people say about art all the time, anybody who is even minimally adept with a paint program on a computer could replicate a cryptopunk in probably a few minutes. The Bored Ape Yacht Club images are very similar to the CryptoPunks in terms of being this profile of a head, but it's not a person. It's a chimp, I think. They're all facing the exact same way, the same expression and primarily differentiate by the colors and you know which glasses they're wearing and what have you.
BROOKE GLADSTONE Anil Dash is CEO of the tech company Glitch. We'll pause our interview there because now that you can visualize the art, we're eager for you to visualize the people who buy it. But Anil will return at the end of the hour with some essential thoughts about the how and the why and the what it all means to global culture and human civilization. But right now, where the wild things were this week at NFT NYC. Come to see how the other half lives. This is On the Media.