360,000 ENCRYPTED MORONS

At the grand hall of an esteemed auction house, a palpable atmosphere of anticipation built up in the air. Hushed chatter and sips of champagne permeated among the crowds of fastidious collectors in tailored tuxedos and designer dresses. The bidding reached a fever pitch, “the bid now stands at seven hundred thousand pounds, to the gentleman in the tuxedo”, declared the auctioneer, “do I hear a seven fifty?” On the other side of the room, a lady in emerald gracefully raised her paddle. “Seven fifty to the lady in the emerald gown!” The man in the tux hesitated, then nodded courteously to his opponent, ultimately conceding to his defeat. “Going once, going twice”, intoned the auctioneer, “sold! To the lady in the emerald gown, for seven fifty thousand pounds. Congratulations, madam, on your acquisition of this exquisite masterpiece!” The crowd erupted into applause as the collectors gazed, for the very last time, at the sought-after lot – A superiorly textured linen canvas in a gilded frame; written at the center of it in all caps, “I can’t believe you morons actually buy this shit.”

This is, in my interpretation, the scene depicted in Banksy’s 2006 painting Morons. The anonymous British street artist created this satirical piece shortly after the sales of multiple of his works at Sotheby’s auction house in London, doubting the perceptive value of art in the organized art world. But it was far from over. In early 2021, the mocking was brought to a whole new level by the cryptocurrency group Injective Protocol, who purchased and brought Morons to a hidden location in Brooklyn, setting it on fire in front of a camera. According to Nick Reilly’s report of “Original Banksy artwork burned by cryptocurrency group and sold, under the account BurntBanksy, as NFT for $382,000”, the digital image of this once $95,000 piece was sold more than four times than did itself.

I can’t believe a moron actually bought this shit, and at such a premium price. Despite the absurdity, this is not an one of thing. Following disrupting crypto-art events like this, NFT, cryptocurrency, and digital art became buzzwords among millennials and Gen Zs. Today, we even coined the term Crypto-Art Movement for it. What even are NFTs and cryptos? Are they really worth as much as they do? And more importantly, what’s lurking within our perception of art’s monetary value, or value in general?

During the NFT gold rush in 2021, the vast majority’s understanding of NFT (Non-Fungible Tokens) was tied firmly with the medium of generative sequential pop comic figures, due to the influences of figure collections such as the Bored Apes Yacht Club and CryptoPunks. However, unlike how most people might have defined it, NFT isn’t an art category; a more precise term would be “Crypto Art”. In Brett Crawford and Lutie Rodriguez’s report NFT Art Marketplace: Trends and Considerations, Crypto art is defined as “a digital artwork published directly onto a blockchain in the form of a non-fungible token (NFT). All crypto art exists in the form of NFTs, but not all NFTs are crypto art”. Besides being apes in stylish jumpers, NFTs can also be game assets, virtual lands, or other forms of collectibles. And for those wondering, a blockchain is a digital list of transaction records called blocks. Each block is encrypted and verified by a network of computers so a system cannot jump in and fake a transaction. This is the foundation of cryptocurrencies and the decentralized-finance (DeFi) system like Bitcoin and Ethereum we see today, a secured network that ensures everyone can view and download an artwork, but only one individual is the verified owner. And it is all archived by the process of tokenization – making a recognizable digital presentation or certificate of a digital asset.

This may sound confusing. Perhaps, what may offer a more explicit example of non-fungible tokens as digital certificates is the first NFT in history – colored coins. According to Crypto Dukedom’s book The NFT Revolution 2022, colored coins were invented to enable the blockchain network to have reference to real world objects, making them indivisible and barely exchangeable, differentiating them from fungible tokens like Bitcoin or Ethereum. But what’s more intuitive is the analogy in its name “colored coins”. Picture this scenario you may have done as a kid: you take a one dollar bill and doodle a hat on George Washington’s portrait. Now, the dollar bill still has the same serial number as before, but it’s no longer interchanged like a regular dollar, and it is no longer worth just one dollar. This is how the concept of NFT can be narrowly understood – a doodle on actual money. Digital artists took virtual bank notes, sketched ape figures and digital real-estates on them, and sold them at exceptionally premium prices. But if so, what is the value of it in this sense? In a market of 360000 active NFT wallets (according to a February 2023 report by Rebekah Carter on BanklessTimes), what are we actually buying? As thousands of NFT transactions are being made on platforms like OpenSea and Blur, are we attracted to the bill itself that grows in value, or the artistic certificate’s associated with the bill?

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