On the surface, “The Currency” by Damien Hirst is a non-fungible token (NFT) collection that checks a lot of boxes for the genre. It is a series of digital works that are limited in number, minted on a blockchain and ranked by scarcity using analytics that determine the rarity of each piece based on a list of possible attributes.
Hirst, the 1990s enfant terrible, claims he is “reimagining the way NFTs are used,” because each NFT in the series is tied to a physical version that is stored in a vault in the U.K. Collectors have until July 27, 2022 to decide whether they would like to keep their NFT or exchange it for the physical painting. Any unwanted physical paintings will be destroyed, leaving the collectors with only the NFT; similarly, any returned NFTs will be destroyed, leaving the collectors with only the painting.
The project, Hirst has declared, is an “experiment in belief.” Which version of the artwork will the collectors put their faith in, the digital or the physical? Exploration of NFTs and digital art seems a natural progression for Hirst, whose creative practice has frequently posed questions about the boundaries between artwork and market value.
It is my conjecture, however, that “The Currency” does not offer useful insights into the way NFTs have transformed the value of art. Instead, the project demonstrates how little Hirst has bothered to learn about NFTs and emerging Web 3.0 communities. Ultimately, Hirst’s project is a one-dimensional appropriation of a digital culture and community that he does not understand.
To begin, the structure of Hirst’s project is not particularly unique in the NFT and crypto space.
In June 2017, Larva Labs established the standard for NFT projects with the launch of CryptoPunks, a collection of 10,000 32x32 pixel semi-procedurally generated portraits. The portraits were auctioned on-chain through a smart contract designed to track which public key, thus which user, owned which portrait.
That project was so early in the emergence of NFTs that the token standard used today to build most NFT collections (including Hirst’s) had not been invented yet. The success of CryptoPunks in part inspired the development of the ERC-721 token protocol, which is now synonymous with NFTs.
It seems obvious that when Hirst decided to turn “The Currency” into an NFT collection, he took cues from CryptoPunks and other successful projects, and followed them like a blueprint. Hirst claims that his decision to make 10,000 dot paintings pre-dates the existence of NFTs, but the format of “The Currency” follows the template of traditional NFT collections to such a tee that I find that hard to believe.
I suspect that when Hirst decides that his NFT collection will have 10,000 pieces, he is doing it because that is what CryptoPunks did. When Hirst decides to dedicate an enormous chunk of his project to developing a rarity scale to create a hierarchy of value for his works, he is doing it because that is what CryptoPunks did. When Hirst decides to use the ERC-721 token standard, he is doing it because it is the standard established by CryptoPunks and other early projects.
“The Currency” is not only a derivative of CryptoPunks, it is entirely appropriative.
Despite copy and pasting the most common blueprint for NFT projects in existence, Hirst could have given “The Currency” a chance to make a meaningful contribution to the conversation about the value of digital art backed by blockchain technology if he did not completely misunderstand where the true value of NFTs lies.
The intent of the project is twofold: to force a choice between the NFT and the physical painting, but also to present each work in the 10,000-piece collection as the equivalent of a dollar bill in a “true currency” that Hirst invented. To do that, each of the physical paintings includes a watermark, hologram, signature and microdot, all elements that traditional government-backed currencies have.
It is evident that Hirst wanted each piece in the collection, NFT and physical, to function as money. But that is where his misunderstanding of NFTs begins – the ERC-721 standard does not simply convert a digital image into a form of currency. Rather, it turns the artwork into a token, and tokens represent far more than merely currency in the crypto space.
Acting as a currency is the most basic function possible for a crypto token. Most serious crypto tokens, including NFTs, are intended to represent complex systems such as governance votes, permission structures or online identities, and, yes, they also function as money. But the way they function as money is unique to each token and to each community that has been built up to support each token.
Thus, the first crucial locus of value Hirst is missing with “The Currency” is the composability of NFTs. Remember the rarity tool for CryptoPunks that was developed and subsequently increased the value of Punks exponentially? The tool was developed by CryptoPunk owners and enthusiasts with the explicit intent of changing the context in which CryptoPunks were discussed and valued.
The community was able to do that because of the open-source nature of blockchain technology. The smart contract that deployed the Punks collection and the back end of the project is all visible on-chain, and can be used to build new tools and projects on top of the existing CryptoPunk project.
That ability for the community to adapt, expand and add complexity to Larva Labs’ initial project is what I mean by composability. The best and most valuable projects in the NFT space offer their communities the ability to build upon the initial project. Thus, CryptoPunk owners and those with a good reputation in the Punk community can add value and vision to the project that the creators may never have even imagined.
That all points to the most essential source of value for crypto tokens, fungible or not, which are the communities of individuals who align their digital identities with their favorite tokens and NFTs. This is the real magic of Web 3.0 and the multiverse.
Crypto, and NFTs in particularly unique ways, provide digital infrastructures that groups of people can rally around and contribute to in creative ways. NFT communities, properly supported and empowered by solid smart contracts and artists who truly understand the space, will devote time and labor to improving and expanding their favorite NFT projects, which in turn increases both the social and monetary value of the tokens they hold. It’s a symbiotic culture of value exchange, where labor put into improving a project can yield tremendous returns for the individual.
NFTs are thus not merely a currency, but an entire economy; a digital society of individuals – the metaverse. I visited the HENI Discord server recently and unfortunately my thesis on Hirst’s NFT missteps were confirmed. No one in the Discord is building. The community has not been given any tools or empowerment to take ownership over the collection. The value of the work has been left solely in the artist’s hands and what remains is to determine how history will judge the contribution. The composability of the project, the decentralization of its ownership, the organic growth of the community to build something from Hirst’s start is just not there.
There is good news for Hirst, if he is prepared to broaden his understanding of the NFT space to absorb the many different types that are possible in a crypto art market. He has an audience, the tools will always be there on-chain, and it will never be too late to pivot the project toward a true exploration of the value of NFTs. He just needs to engage the community of people who have collected a piece from “The Currency” and empower them to give the project a second life in the metaverse.
The advice I would impart to Hirst is to take a more holistic, big-picture view of the role of an authentic NFT artist. Such an artist commits to a fractionalizing of the self; making oneself extremely vulnerable by allowing buyers to speculate on your future work, trade against your success or hold to see what you have in store. It’s about disintegrating your very self as an artist and your artworks into a community whose faith in you and your project must be cultivated and empowered.
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