“You know what’s really punk? One billion dollars.”
That line, from Wave Financial co-founder Les Borsai, a music manager-turned-NFT investor, stuck with me this week throughout NFT.LA, the latest in a series of non-fungible token events that have sprung up around the U.S., this one in the storytelling capital of the world.
The spirit of punk, of rebellion, of anti-establishment expression has always run deep in the crypto community, taking its strongest expression in the blockchain principle of “permissionless innovation.”
You’re reading Money Reimagined, a weekly look at the technological, economic and social events and trends that are redefining our relationship with money and transforming the global financial system. Subscribe to get the full newsletter here.
The “permissionlessness” concept stems from the technology’s open-source protocols and decentralized validation networks, which enable direct, peer-to-peer value exchange. Developers are free to build applications without having to ask the permission of say, a Web 2 internet platform, or a bank, or even a government. The degree to which different blockchains are truly “censorship resistant” is a matter of constant debate, but the idea is that decentralized architecture enables innovation.
My conversations this week with numerous Los Angeles-based digital artists opened up a different perspective. As they eagerly opened their iPhones to show me their latest NFT drop or other creative venture, it occurred to me there’s an even more powerful source of permissionlessness being unleashed in this space: money.
NFTs are generating a giant pool of dosh. And, proportionally, more of it is now flowing into the hands of creators than traditionally in LA, where the arts and entertainment economy’s terms have historically been set by music labels, film studios, talent agents and other interlopers.
A great deal of that money is staying inside the ether ecosystem in which it is generated, rather than being returned to dollars. It’s now being redeployed into new investments in the space, sometimes leveraged for maximum impact with decentralized finance (DeFi) bets or fed into decentralized autonomous organizations (DAO) that allow creators to pool resources and underwrite ever more new creative projects.
For now at least, this virtuous circle of money and creativity seems unstoppable. But, of course, the NFT boom and the energy it seeds at conferences like this one – including the NFT.NYC conference, which stirred similar thoughts last year – could all be just hot air, the output of an unsustainable bubble.
For one, the legal framework for intellectual property in NFTs remains highly uncertain. Also, there’s a fear that content-management power is being centralized with giant marketplaces like OpenSea or with creator projects like Yuga Labs’ Bored Ape Yacht Club – in other words, that new intermediaries are forming to replace the old ones.
Moreover, the underlying blockchain architecture is not yet able to scale in a sufficiently decentralized manner to accommodate all the NFT projects underway. As a Polygon developer once put it to me, “These guys are launching Formula One race cars before we’ve built the track.”
But perhaps such concerns are moot. Even if the legal and technological framework underpinning NFTs isn’t yet fully supportive of a truly decentralized, creator-centric content economy, many artists are creating direct-to-customer products that generate, in many cases, real “FU money.” They can tell the Hollywood intermediaries to take a hike.
The possibility of financial liberation is the most powerful force at work in the NFT economy. It’s why we’re seeing digital creativity and collaboration like we’ve never seen before – not only in these art and music projects, but in new models for derivative works, cross-creator collaboration, fan engagement and community building.
Take filmmaker Matteo Santoro. He shared with me this scene, part of a “100 Tombstones” NFT drop to fund a film set in a future world called SIFT. The quality of production might suggest the work of a big-budget team at Universal Studios or Pixar. But it’s mostly just Santoro. Using CGI, some scrappy set creation in his garage and a great deal of imagination, Santoro is the solo director, animator, actor and producer of the entire project.
This stuff must be terrifying for the big Hollywood studios – and I don’t mean the dystopian imagery.
Or consider David Bianchi, a Hollywood actor who has simultaneously created a new art form and a new business model: poetry-based short films funded with the spoken-word NFTs. His first project, “I Can’t Breathe,” a haunting meditation on the death of George Floyd, won an award and delivered 100% of the proceeds from its sale as an NFT to the George Floyd Foundation.
Bianchi is now doing live performances, videoing them and layering high-tech effects to create unique digital artifacts that attendees and outsiders can buy there and then.
It’s an approach that’s now challenging the old “starving poet” trope. Peace Uche, a medical doctor who performs under the stage name Doc Peace, has released spoken word NFTs aimed at inspiring female empowerment. “David Bianchi lit the fire and I'm here as a female spoken word artist to carry the torch,” she said.
This new model isn’t just for existing, established creators to find new avenues for their craft, either. Younger crypto natives are generating money that up-and-coming artists could rarely have imagined previously. Example: Diana Sinclair, a celebrated 18-year-old visual artist and curator, who will be appearing at CoinDesk’s Consensus Festival in June.
The instant success does not appear to have gone to Sinclair’s head. At an event at South by Southwest in Austin, Texas, earlier this month, she staged an art project in which people lined up to sit and talk before taking a selfie with her. All the participants I spoke to said they were blown away by the vision, empathy and sense of leadership exuded by this young woman.
It’s hard for progressive-minded people to avoid a negative knee-jerk reaction to the billions of dollars sloshing around the NFT economy, which seems to have created, in some quarters, an ethos of excess and exclusivity. I mean, how, exactly, is the world being changed for the better by a club of crypto bros touting their cartoon ape avatars? (I do have potential answers to that question, but that’s for a different column.)
What I’m getting at here is that it’s really hard to separate the excesses fostered by this river of money from the independent creativity it also enables. The world will be changed by punks with money.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.