Prosperity Gospel

NFTs are more something to believe than something to invest in

Full-text audio version of this essay.

Toward the end of last year, Brooklyn art collective MSCHF programmed a robotic arm to make 999 copies of an original Andy Warhol print called Fairies. They mixed in the real one (valued around $20,000) with the forgeries, “obliterat[ing] the trail of provenance,” and sold each print for $250. “In some way,” Kevin Wiesner, the collective’s “co-chief creative officer,” told CNN, “we’re democratizing it by letting everyone have what could be a Warhol.” One buyer really did walk off with the original Fairies, but any value or meaning that might be ascribed to its genuineness has been buried. What has been “democratized” is not ownership of an actual, auratic object, but the fantasy of possibly owning one. One might similarly say that Powerball lotteries democratize wealth.

This stunt was widely read as a commentary on the non-fungible token (NFT) market, which insists on the blockchain-certified distinction of an “original” amid a sea of perfect fakes. While NFTs are often pitched as tools for imposing scarcity on replicable digital content, the act of referencing a digital artifact in a blockchain entry does virtually nothing to enforce a seal of authenticity. Unless gatekeepers decide to confer significance to this validation, NFTs are little more than semi-standardized entries on public spreadsheets that happen to waste enormous amounts of energy — not to mention the time of those who try to explain their operations in precise detail. As with documentation of artistic provenance, the value of an NFT is entirely contingent on the social-psychological enforcement of communities of shared belief.

Web3 provides an optimistic future to believe in, a financialized vision of salvation

Evangelists claim that NFTs will change the world, heralding everything from blockchain-validated girlfriends and edible NFTs to tokenized identity and metaverse “citizenship.” But thus far, the “functionality” delivered by NFTs is a new way to pay for old features. Today’s NFT market is largely dominated by character collections: Bored Ape Yacht Club and CryptoPunks are the best known, but there are also Lazy Lions, Magic Mushrooms, Cool Kangaroos, and on and on. These and other collectible NFT series are little more than virtual streetwear lines, minting capped batches of thematic avatars for holders to project their crypto affiliations across social platforms. In January, Twitter became the first such service to embrace the practice, offering a unique hexagonal frame for those with blockchain-validated profile pictures. Facebook is allegedly soon to follow.

The NFT hype is obviously not about present-day utility or novelty. It thrives on something more mystical: an experience of collective faith in an age of taxing isolation. Web3 provides an optimistic story about a future to believe in, a financialized vision of salvation, and designates a cast of naysaying cynics to blame if (when) the plan falls through. NFTs act as perceptible frames for these emotions, serving as sacred spaces that draw the dynamics of this community of believers into sharp relief. Behind the technical veneer, the NFT market operates as a kind of doomsday cult, peddling fear and translating prosperity-gospel logics into a utopian narrative of the coming metaverse.

NFTs are so widely misunderstood that obfuscation can feel like the point. Confusion abounds regarding what, exactly, is conferred in the blockchain-authenticated ownership of such a token. They have been widely analyzed, condemned, or embraced on the basis of their being promoted as “unique digital artworks,” despite the fact that their associated contents — usually but not always images — are typically perfunctory, formulaic, and instantly replicable by right-click. NFTs could theoretically be used to verify ownership of cross-platform virtual assets such as video game skins, but such features could only be implemented at the discretion of centralized gatekeepers, who can similarly employ any number of means for validation.

It may make more sense to consider NFTs in terms of access and permissions. Many NFT projects — perhaps to shore up shaky claims of digital exclusivity — promise exclusive access to clubs, media, or product drops in the unspecified future. Sneaky Vampire Syndicate, for example, dangles eventual meetups, vampire NFT “breeding,” and a hazily envisioned video game. Other projects have cautiously approached NFTs as mechanisms to support decentralized autonomous organizations (DAOs), which ostensibly aim to operate like shareholder corporations without executive boards.

Even if these deliverables eventually come to fruition — never certain in a market that contains “mountains” of fraud, per one IRS agent — most NFT investors are less interested in personally acquiring them than in imagining a future buyer who may want to do so once they become available. The speculative potential of hazy promises of exclusive access ironically depends on perpetuating a sense of inclusion, in the form of finding new investors to inflate the price of an unproductive asset whose value depends on popularity alone.

NFT holders skew young, and the communities that form around specific tokens largely eschew public platforms in favor of restricted Discord servers and Telegram channels. Behind these walls, personal-finance chatter meets the desire to belong, a common grindset supplants prerequisite shared aesthetic interests. Anecdotally, typical congregants are socially isolated, easily flattered, and pessimistic about their chances in the outside world. Many are struggling. In n+1, Sarah Resnick relayed a series of bleak pronouncements from anonymous people who had poured their hopes into crypto. “I have only $100 to put in,” wrote one. “My wife stays home with our baby and I work full time and do delivery apps on weekends to make extra.” NFT community spaces subsume the structurally enforced necessity of acquiring wealth to survive into a more personal quest for belonging, with promises of formal confirmation of progress at every step.

Hazy promises of exclusive access ironically depend on perpetuating a sense of inclusion

NFT boosters often invoke the concept of “democratization,” as if purchasing digital tokens were akin to exercising some new form of citizenship. But any fantasy of an equal redistribution of power is subordinate to the hope of getting rich quick, which appears as a commendable matter of shared belief. In 2014, Peter Thiel argued that entrepreneurs should run startups as cults, asserting that “no company has a culture; every company is a culture.” NFTs follow the footsteps of this logic,  positing that every culture could be a company, and thus a cult. Community members celebrate new recruits, chastise expressions of “FUD” (fear, uncertainty, doubt), and remind one another to “hodl” with “diamond hands” until prices go “to the moon.” Another popular saying in crypto world, “WAGMI,” or “we’re all gonna make it,” serves as a sweaty reassurance in face of the plain fact that someone will ultimately be left holding the bag. All of this anxious optimism is held together by devoted faith in the face of despair. From outside, it is easy to infer that the “we” in WAGMI refers exclusively to those who have bought into the racket. It is also easy to imagine a bitter addendum: and everyone else is fucked.

On the surface, NFTs rest on a dubious value proposal. Beneath it, however, are fears of bleak prospects in a decaying, uncertain world outside. Where 1990s Wired techno-utopianism looked outward, framing the present as a site for benevolent conquest, NFT communities turn inward, enforcing internal dogma and promising meager lifeboats from a rotten world worthy only of escape. Beneath the surface optimism, NFT cults are flush with extinction fetishism. Bored Ape Yacht Club’s Red Ape Family animated sitcom, for example, follows a family of NFT apes who abandon a polluted Earth for a fledgling Mars colony, funding the journey with a stolen golden flash drive containing “the most valuable NFT ever created.” Another collection, Moon Boyz, mythologizes its cute robotic subjects as the inheritors of human consciousness in the wake of a 22nd century extinction event.

Eschatology forms the bedrock of most formal religions, many of which prophesize that negative circumstances will build to a climax followed by release or transcendence. Doomsday cults accelerate the timeline, organizing shared faith around a belief that end times are immanent — if not already upon us — and are clearly discernible through a particular ideological lens. These dynamics certainly appear among NFT enthusiasts. It is hard to focus on the health of today’s environment or the global economic system without falling into malaise, but NFT communities ultimately take collective demise for granted, positing that personal salvation, understood as enrichment, is the only feasible kind. Given the environmental toll of blockchain technologies, acting on this assumption of inevitability could play a role in producing it.

Last year, anthropologists Sandra Fausto, Inês Faria, and Rafael Marques argued in an article for the Journal of Cultural Economy that “blockchain technologies have had a symbolic impact in re-invigorating enchantment and material romanticism toward finance and technology,” observing that crypto zeal is sustained through secular rituals guided by charismatic technocrats. The authors described the formation of secular myths around events like “Bitcoin Halving” — the reward given to Bitcoin miners gets cut by half every 210,000 blocks, or roughly once every four years — and “Bitcoin Pizza Day,” the anniversary of the first Bitcoin transaction, in which 10,000 Bitcoins ($440 million at today’s exchange rate) were exchanged for two pizzas.

NFTs too have become pivotal to these rituals. Successful lines often hinge on one or a few central personalities with the disposition of a proselytizing father figure. VeeFriends, for example, is headed by Belorussian entrepreneur Gary Vaynerchuk, who claims to have predicted the rise of social media. The project is entwined with his self-help book, Twelve and a Half, and he operates a mentor-ish Discord channel that emphasizes the possibilities for raking in with NFTs. “I experienced the launch of Vee Friends as my personal IPO,” said Vaynerchuk, who has sold tokenized doodles for more than $50,000, “where I allowed people who trusted me to continue to support me and at the same time generate income for themselves.” Damien Hirst reflected on his $20 million NFT project more directly: “It’s like being in a cult, and I’m the cult leader.”

If NFTs provide a means for aspiring cult leaders to IPO their personal identity in a kind of apotheosis, they also can be read as icons giving a mystical rationalization for the forces at work on their followers. The past few decades have seen the aggressive commodification of communication and identity-confirmation processes that were once deeply personal. Anything from announcing a wedding to privately searching for an abortion clinic can now be converted in metadata and reflected back at you, in the form of targeted advertisements and automatic content recommendations.

An inherent uncertainty serves as a prerequisite for setting up the significance of the revelation that follows

Such mechanisms structurally impose a neoliberal vision of the “self” as a stable, logical, knowable unit operating within an external structure. NFTs are appealing in part because they act as vessels to stage that form of selfhood. Social media profiles perform a similar role, but NFTs do it better: They are simultaneously agnostic to content and always capable of being verified and resold in a theoretically endless auction process. The cultish communities of shared belief that form around NFTs maintain and reinstate the idea that an identity can have a value in and of itself, because of its uniqueness as well as its stability across time — i.e. “I am unique person, and I have the NFTs to prove it.”

It is easy to understand the appeal of trying to reclaim their financialized forms from today’s internet oligarchs (Why should Facebook own my profile?), but NFTs merely look to replace those empires with autocratic pocket fiefdoms on flimsy foundations. If you want to profit from a share of someone else’s ego, you first need to inflate it.

NFT communities tend to be hierarchical, with levels to advance through and growth imagined in linear, progressive stages. Getting whitelisted for a new collection often requires proselytizing in the form of recruiting new members to the project’s Discord server; giveaway contests invite enthusiasts to promote token lines and reinforce their perceived valuations. Participation is broadly gamified to suggest progress through commitment to the plan: You can level up on the path to success regardless of whether you understand or control the underlying technology; all you need to do is perpetually deepen your commitment. “NFTs are the most powerful mechanism that we’ve discovered to date that can interlink people with true steadfast loyalty,” said Doge Fight Club founder Elliot Ngai in a sponsored Decrypt interview in November. This loyalty, however, is no less bound by pre-existing power and wealth on one end and despairing fear of failure at the other.

In the video essay “Line Goes Up — The Problem With NFTs,” Dan Olson argues that the NFT market is governed by a climate of “toxic positivity,” the belief that all situations demand reassurance and optimism. The shared belief that undergirds the NFT market is always contingent on mutual trust, which is maintained through positive affirmation in the face of otherwise obvious setbacks. In binding communities together, a central task of NFTs’ religious aura is affirming that the blockchain’s visible artifacts — the histories and interlinkages of tokens and wallets — constitute significant units of meaning, foundational atoms of a virtual ontology. NFTs organize sacred space around a vacuum, promising collective transcendence while sucking power and wealth upwards.

NFTs ostensibly operate on radical transparency — public ledgers; basic supply and demand — but blockchains conceal much of what goes on behind the curtain. Crypto wallets hide anonymous owners; virtual tokens belie carbon footprints. Consensus protocols ensure that certain rules are executed according to precise written logics, but they cannot police, protect, nor even perceive the real humans acting through them. As with most foundations of religious belief, this inherent uncertainty serves as a prerequisite for setting up the significance of the revelation that follows. People want to believe in the blockchain, if not a charismatic entrepreneur acting as its preacher, as a rational arbiter of truth and justice. Sooner or later, however, the bubble is sure to burst.

NFTs enframe voids filled with imagined objects of desire that never satisfy. This, and not the aura of uniqueness, is what makes them appear sacred

In The Fragile Absolute, Slavoj Žižek argues that “every element that claims the right to occupy the sacred place of the Thing” — the Lacanian word for the unimaginable vessel of an inarticulable desire — is “by definition an excremental object, a piece of trash that can never be ‘up to its task.’” NFTs are just such pieces of trash, enframing voids filled with imagined objects of desire that never seem to satisfy. This, and not the aura of uniqueness, is what makes them appear “sacred.”

That is to say, their significance derives not from technological innovation in blockchain tokens but in communities defined by the need to continually enchant that process, to mystify the void, to project their own fear of recognizing it onto outsiders, and forbid critical evaluation of its implications. In Žižek’s view, excremental artwork — he vaguely appeals to postmodern works depicting or literally consisting of feces or rotting corpses — can work in precisely the opposite fashion, calling into question the sanctity of its context. It seems obvious that NFTs, despite the claims about their revolutionary potential, are not oriented toward that kind of radical project. They are doomed to fall far short of the wild aspirations articulated by their most rabid promoters. In the long run, their vacuous contents are sure to shatter the aura.

Pseudonymous “crypto-dadaist” Shl0ms recently conceived a project that builds on the ideas that propelled MSCHF’s Warhol stunt. In February, he blew up a six-figure Lamborghini with the intent of auctioning 999 NFTs of “exquisitely filmed” images of the destroyed luxury vehicle. Where MSCHF produced 999 near perfect replicas to destroy the value embedded in provenance, Shl0ms’ self-described “criticism of greed and short-termism in crypto” obliterated a more primary object of desire for crypto bros — “When Lambo” is common shorthand in crypto world for “When is it my turn to get rich?” This attitude, Shl0ms’s stunt suggests, always already destroys the thing it wants. Treating NFTs as a sacred space is no different: Faith and desperation always cancel each other out.

Evan Malmgren is a writer who covers power and infrastructure for outlets including the BafflerDissentLogic, and the Nation. He is currently working on a book about people trying to live “off the grid” in modern America.