The hype surrounding non-fungible tokens (NFTs) is reaching a fever pitch. A recent article describes NFTs as data added to a file that creates a unique signature. It can be an image file, a song, a tweet, a text posted on a website, a physical item, and various other digital formats. Another article explores NFTs from the perspective of value.
In 1962, Daniel Boorstin crystallized a notion that had been around since at least the 1890s, writing of the new kind of celebrities: “Their chief claim to fame is their fame itself. They are notorious for their notoriety.” The same might be said of cryptocurrencies, NFTs, and meme stocks: They are valuable for being valuable.Tim O’Reilly – Andy Warhol, Clay Christensen, and Vitalik Buterin walk into a bar
The notion of value is explored in great detail in Mariana Mazzucato’s book The Value of Everything, which I added to my book library back in 2020. The book shines a light on modern economies and how they reward activities that extract value versus creating it. An historical distinction is made between activities that created value (agriculture, land, manufacturing) versus those that moved value around (trade and finance). Said differently, what we recognize as value is skewed:
Over time, trade, finance, and entertainment have been brought inside what Mazzucato calls “the value boundary.” Meanwhile, household labor—child rearing, caring for aging parents, cooking, cleaning, and the like done by members of a household rather than purchased as a service—is clearly intrinsically valuable, even essential, but still remains so far outside the value boundary that it remains unpaid and isn’t even counted as part of GDP.Tim O’Reilly – Andy Warhol, Clay Christensen, and Vitalik Buterin walk into a bar
The key message from the article is captured in a fictional exchange between Andy Warhol, Clayton Christensen, and Etherum creator Vitalik Buterin: “In a world where more and more has become a commodity, things become valuable again because we mix in ideas that persuade people to value them differently.” This article is long – but a must read. It brings aspects of our societal challenges together very nicely. As stated in the article, we can build new mechanisms for people to coordinate around socially valuable goals. Prepare for the NFT hype cycle while recognizing that beyond the hype lies the potential to drive that coordination. This video describes NFTs.