The stickiness of (NFT) culture.

The early days of the Bitcoin movement were a special time and place. Optimism, curiousity, passion, and a committed sense of techno-futurism filled the air. Alas, like too many revolutions (and reactions), co-opting of the original mission by the established powers-that-be was only too possible and arguably even inevitable. Centralised exchanges, ETFs, and other custodians came to dominate the market and with it, the culture, being as it was that “the culture” was limited to text, or even worse, cells of a spreadsheet.

But must co-opting by the ancien regime always be the natural end-game of formerly avant-garde cultural movements?

For as long as crypto-markets were confined to the mere exchange of one nebulous token for another, perhaps so. When each highly divisible, fungible, and semi-autist-oriented coin is as emotionally uninvolving as the next, at least for the 99% of the population that aren’t huge nerds, there’s always another shiny thing around the corner, and more sophisticated and well-heeled market entrants will always have the leg up. But the innovation of NFTs now looks poised to reverse that seeming inevitability, and in doing so spread the values of crypto-native culture beyond the humble ken of white papers and node counts. How? With visual culture. With NFTs, a crypto-native visual culture and visual language can be, and has already been, developed. Recall, a picture is worth a thousand words. And more!

With NFTs as our foundation, no longer will the social currencyⁱ of the crypto-native community be limited to debates about orange coins vs. dog coins, where each is “valued” based on the merits of its developer community, the smartness of its contracts, the constraints of its supply, or even how regulated it is.

Now, visual culture, that which dominates the digital world (as well as the physical world!) is transmissible and valuable online. And not just “valuable” in the sense of having a very large sticker price, though that never hurts, but also in the sense of being able to socially determine a sticker price at all – its ability to be valued. This is what makes the whole NFT space so fucking sticky. Money flows in but it never seems to flow out. Why would it when profits reaped from one NFT project can simply flow into the next and the next and the next?ⁱⁱ What could be a better allocation of capital than a white space at the nexus of financial, cultural, and technological innovation, one undergoing a veritable Cambrian explosion of creativity? What could be more sticky-icky-icky, put it in the air, than NFTs?

But don’t take my word for it, take it from legendary NFT collector 6529,ⁱⁱⁱ another reformed Bitcoin Maxi from the good ol’ days:

First draft thoughts on what is different about NFTs from an “institutions are coming” perspective. CryptoTwitter front-run the institutions badly in BTC and in ETH, but in the end, +/- the institutions “won” to some degree. BTC and ETH remain an enormous achievement but… A huge amount of BTC and ETH is now locked up in centralized vehicles – CEXs, custodians, fund-like structures and this will only get “worse.” That has two ‘bad’ parts -> first, it hurts decentralization, second, bigger late adopters picked up more gains than early adopters. In other words, Anthony Scaramucci was quite late to BTC (2020 if I am not mistaken) but because he has institutional leverage, he was able to gather significant assets under management and effectively has a larger position in BTC that most people who got it 5-8 yrs earlier.

What is different with NFTs? One thing that is different is that some of us crypto-native are not broke like we were in, say, 2013. This allows to take more ambitious bets and some of has have more staying power. This is not specific to NFTs – also true in DeFi. The bigger difference is the non-fungibility. Any small holder of BTC could do nothing about the market selling to Scaramucci. It is a fungible anonymous global market that trades at the margin. So is UNI, but punks are NOT. NFTs are built different. There are 18 hoodie nerd glasses punks or 20 squiggles perfect spectrum that will eventually mostly end up in diamond hands over the next months/years as we play some musical chairs and shuffle things around

That means that when the Scaramucci of 2028 shows up with a $400M fund to buy hoodie nerd glass punks or squiggles or whatever, at least at the elite level, the sellers can just say “no.” Not “at a high price”, but simply “no, we are going to control these and their culture.” And because of the non-fungibility, there is no necessarily ‘weak hand’ at the table that will sell. I think this is a fundamentally different dynamic regarding how this market will trade. Mostly misunderstood so far.

But 6529, why does it matter, aren’t you creating a new elite? Maybe, to some degree you are, that is true. But it is a crypto-native elite, with different values, different goals, different objectives on the whole. We have a chance to make the decentralized dream true. […]

The fight with the institutions needs to be led by the 2nd and 3rd gen crypto folks. […] I think our goal should be to ultimately change society, not just sell our tokens to the institutions at a higher price.

tl;dr

Don’t let the institutions steal your JPGs

That’s all for this week. And remember, it’s not the size of your ape that counts, it’s how you use it.
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1. For all currency is social, even crypto. Gresham’s Law still favours utility, but utility is principally defined by the ability to construct increasingly novel and dynamic trading networks between individuals. ↩
2. As market analyst Zeneca_33 (archived) observes from the data (emphasis added):
   

   Daily floor + unique owners update. CAN’T STOP. WON’T STOP. The market surges forward, again, and again while ETH is ripping. Punks up another 10%, apes “accumulating” at 15 eth (54 new owners!!), and @veefriends price finally moves more than 1% for the first time in literal weeks. The biggest winner of the day however is @RumbleKongs, absolutely crushing it, and @pudgy_penguins continue to power forward. Honestly two weeks ago I legitimately thought the market was over-saturated, but I think we are clearly seeing a case of more money and people flowing into the space than we know what to do with. So everything is fucking pumping.

   Another reason for this, I think, is that when punks and apes are selling at such high prices the people that sold them all of a sudden have a tonne of ETH to play with. And those who were into punks and apes early are not the type of people to just convert that ETH to fiat and park it in a bank. They’re very likely to re-invest it back into the NFT community. A rising tide lifts all ships. Congrats to @VoxiesNFT for selling out (finally!), seems likely that their price will slowly rise now as more people find the project and as they reveal more of what they’ve been working on for all these months. New to the charts are @BarnOwlzNFT
   which sold out a week or two ago and has recently seen a bunch of positive price action, and @LazyLionsNFT which sold out a couple of hours ago and I aped into b/c everything seems to be mooning and I liked the art so why not. Could end up being a project I have to take off the charts in a few days b/c it fizzles out, but based on how everything else is going, they’re probably gonna do just fine (he says, hoping). Over on the unique owners side of things we see absurd numbers, again. It’s been green on the board all day every day ever since I started doing these charts ~6 weeks ago, and instead of slowing down, the unique owner numbers are just going up everywhere.

   Now instead of a project getting another ~100 owners the day after it sells out, we’re seeing them getting 200-300, and old projects are getting 50-100 new owners days or weeks after sell out. Another 54 apes though?? We JUST hit 5k unique owners and we’re already at 5130, and there aren’t many signs of things slowing down. Another 24 Punk owners is nothing to scoff at, and a whopping 342 new people picking up @pudgy_penguins is just insanity. We’re STILL early, we’re still so so so so so early

   Once you’ve lost your marbles enough and caught the “JPG bug,” the idea of taking your winnings and buying something physical seems insane. Unlike the physical world, where you might sell a car to buy a boat, or a watch to buy a painting, once you go JPG you never go back! ↩

3. Archived. ↩