From the very beginning of the internet we’ve wanted to talk to our friends. Or to talk to people who might become our friends. At first this was easy because there weren’t many people online so you could know everyone who found their way into an IRC channel or MUD or various other chatroom but as more people got online staying in touch with your friends became harder and it wasn’t long before our online social networks evolved into and were enabled by social networking sites (SNS). In my memory this starts with SixDegrees, for others it might be Friendster, Xing, MySpace or any number of other sites where you could subdivide everyone into a smaller group of people you wanted to connect directly with long before most of the world found their way onto Facebook. And everyone who has every used one of these sites has faced the same dilemma – leaving.
Not that it’s hard to walk away from any particular site but it is hard to walk away from the friends you made there, and in a very real way this became one of the tools used by these sites to keep you there. If you leave the site you are leaving your friends and you wouldn’t want to do that right? They used guilt along with various technical lock ins to make it very hard for you to recreate your social network on some other site. You might think of these people as friends but these sites look at your friends as valuable proprietary data. Of course this isn’t a good thing, they actually are your friends after all, but business models as they are with these sites want you to think you only have friends because they allow you to. So almost since there were social networking sites people have been trying to find ways to export their list of friends (or their social graph if you want to get fancy) and bring it into another site.
But just getting the information isn’t enough, if your friends aren’t using a new site then trying to connect with them there is going to be hard even if you somehow were able to bring over your friend list from another site. This is a problem with centralization, you need people to go to the specific place. There’s other privacy invasive options like uploading your entire address book but maybe you don’t want to show this company everyone you know, or maybe you don’t want to leak your friends private info, or maybe just because someone is in your address book doesn’t mean you want to connect with them on every social media site. Are they actually your friends or work colleague or ex-roommate or a million other potential classifications that makes this problematic? Anyway, this isn’t a new problem and smart people have been trying to solve it for a long time.
I first remember Ryan King talking about it in 2005 though he even notes then that this was a frequent conversation at the time. We were in the beginning of Web 2.0 but already imagining what Web 3.0 might be, and calling it The Semantic Web. (This is not to be confused with Web3 – the distinction between Web3 and Web 3.0 is still lost on a lot of people, and sadly a lot of the people who dreamed about Web 3.0 are missing Web3 because if silly biases, but that’s a different story for another time). Projects and proposals like Microformats and IndieWeb imagined an internet where an individuals personal data was owned by and controlled by themselves rather than by for profit companies. Rather than a website allowing you to see who your friends are you could choose to allow a website to see your friends. It was a revolutionary idea at the time, as Ryan notes, and unfortunately it didn’t catch on in the scale that any of us hoped it would. And as a result of that lack of adoption my Twitter feed right now is full of friends worrying about how they will stay in touch with each other if Twitter suddenly disappears. It’s got people talking about Mastodon again, which while open source is really many of the same problems in a different uniform. And so the dreams of 2005 have gone largely unrealized in the last 17 years.
Until now…
If you have been paying attention to whats going on in Web3 then this description of “own your own stuff” probably sounds familiar. And this is where things start getting really, really exciting. (Well, I mean if you are a nerd about this stuff it’s exciting, and I clearly am, and if you are still reading I’ll assume you are as well.) There are two new blockchain based protocols I’ve been playing with, Farcaster & Lens, which are super promising and already delivering on some of these dreams and I wanted to share them here.
Farcaster is a “sufficiently decentralized social network” which combines on-chain (ethereum) with off-chain to create something where people own their own information, their usernames, social graphs and posts, and decentralized enough that anyone can build something on top of those profiles – and enables people to switch between services without needing permission from a company. A quick look at the growing ecosystem shows how people are already putting this to work. For example right now the primary Farcaster application (which is not yet publicly released) doesn’t show public profiles, but Discove.xyz is built on the protocol so you can see my profile here.
(Farcaster as seen in the desktop app)
Lens Protocol is a decentralized social graph built on Polygon which takes the interesting approach of making your username an NFT and then minting NFTs of your connections, which then allows any application using the Lens protocol to just look at your wallet and then immediately build out your profile. For example here is my profile on Lenster which is currently the primary SNS using the protocol, and when I signed into Orb (another currently mobile only option) it instantly populated my profile, posts, and followers/following with everything I’d set up on Lenster.
(my profile on Lenster)
(My profile on Orb)
I didn’t need to export anything from Lenster, I didn’t need to import anything to Orb. Didn’t need permission or anything. When I updated my header image on Orb, the change was immediately reflected on Lenster. I looked at a few other Lens based sites and it was the same everywhere. Possibly even more exciting is that not only the posts were mirrored, so were the reactions. Hearts, replies, shares, etc.. all the same everywhere. It was mind blowing. Of course there are ways to syndicate out a post from a Web 2.0 SNS to others, using IFTTT for example you can write a script to send your Tweets to your Tumblr, or you can connect Twitter to Instagram so that a photo you post on Instagram is announced on Twitter, but the result is that these are still separate sites with individual comment threads and ultimately disconnected. With Lens it’s all the same, because they are decentralized and I as the owner of the post and the profile let each site access it from the blockchain. However we haven’t moved entirely from Web 2.0 to Web3 yet, so luckily there’s a way to send things back as well. I tested it out and it worked brilliantly – this post originated on Orb, was cross posted to Twitter and reflected on Lenster. Obviously any replies on Twitter stay on Twitter, but a reply on Lenster is seen on Orb. It’s magic.
(as seen on Twitter)
(as seen on Lenster)
Looking through the ecosystem lists on both projects I don’t see any option to sync the two yet, however I can’t imagine that is going to be too far away. Similar problems being solved in both and a lot of overlapping ideas. I’m really so excited to see this and to realize we don’t need to have the “____ sucks now because [policy/management] change, I’m deleting this app, where is everyone going next so we can connect there?” conversations every few years any longer. Obviously this is early days, these are beta applications on beta protocols but I can see where it’s heading and it’s so much of what I’ve been dreaming about for almost 20 years. I’m sure it’ll take a little while for this to click with everyone, and a lot of people are going to need to get past their crypto biases, but this really is the empowered user world we’ve been hoping for. If we’re friends, if we’re connected on one of any number of current social networks, I do hope you’ll check this out sooner rather than later. I don’t think mass adoption is an if, it’s a when.
From the early days of screen names and /nick to usernames and avatars and anons and on and on we’ve continually struggled with (or perhaps played with, depending on who you ask) how best to represent ourselves online. Hell, how we represent ourselves offline is already difficult enough and forever falls back on who you know, who will vouch for you, and your reputation – all of which is easily manipulated. That’s 1000x more complicated online where in most cases you don’t actually have any idea who you are interacting with. The dismissive cliche leading up to the dot com boom was that anyone you spoke to online was really some overweight, socially inept dude still living in his parents basement, especially if they were representing themselves as an attractive woman. This stereotype was largely driven by people who weren’t online and saw no reason to get online and just wanted to poo-poo anyone else who did. But then “being online” got profitable and that made all these other people get interested and suddenly there was a rush and people who had been mocking anyone spending time on the internet needed a way to be on the internet but make it clear they weren’t like those other people on the internet. Proving who you are, while also allowing you to be who you want, has been a struggle ever since.
One of the things that I and others have been thinking and talking about is how Web3 has to some extent freed us from the constraints of the avatar and given us some further flexibility as to how we manage our online identities. Almost exactly a year ago I wrote a lot of words about avatars and identities, largely focusing on community membership and how the ability to own an NFT which becomes your access to and identity within a community, and being able to have wallets with multiple NFTs that you can switch between depending on context was both scary and exciting.
One thing I observed was that being able to prove you owned an NFT which you were using as your avatar allowed for some authenticity and reliability, and while of course anyone else could right-click-save that image and use it themselves (and we’ve seen a lot of scams emerge doing just that) the increasing ability to gate some interactions or prove ownership as verification was quite the revolution. I can use my CryptoPunk while interacting in the private CryptoPunk discord and my Bored Ape while interacting in the private Bored Ape discord and in both cases everyone knows it’s me, just kind of wearing a different outfit to fit the occasion. Of course, we’ve also seen that people gravitate to one of their avatars more than others and begin to use that across platforms and that avatar starts being associated with them. This is super interesting for lots of reasons, not the least of which is what happens when an NFT avatar is deeply associated with someone and then they very publicly get rid of it as we saw with Punk #4156, or it becomes so much of who they are they couldn’t part with it? Are these little images now subject to typecasting? So once again a solution presents new complications.
And this is where things get super fascinating, because what if the image that becomes so associated with you and your online identity, isn’t “the real” thing (whatever that means)? Consider for a moment the case of CryptoPunk #1060 vs CryptoPhunk #1060.
CryptoPunk #1060CryptoPhunk #1060
I’ve written about CryptoPhunks before and won’t repeat myself here as it’s a complex discussion, but will just note for anyone unfamiliar that the imagery of the CryptoPhunks collection (released in 2021) is a 1:1 mirror image derivative of the CryptoPunks collection (released in 2017). There’s a lot more to it than that, but in this context that’s the important detail. In the case of #1060, one of these is used regularly as an avatar and the other sits dormant in an unused wallet. As an experiment I recently posted CryptoPunk #1060 on Twitter and asked people who first came to mind:
Obviously this is not scientific and is biased by who follows me and what communities they spend time in but the point I was trying to make was pretty obvious. Chopper is a developer who is very active in web3 building open source software and helping to manage several overlapping communities. Chopper does not own CryptoPunk #1060. He does own CryptoPhunk #1060 and has used it as his avatar everywhere for more than a year to the point that this image, regardless of which way it’s facing, reminds people of him. For all intents and purposes, in the world of web3, it is him. This is aided by the fact that the “original” CryptoPunk is sitting unused in a wallet that hasn’t been active in over 3 years. Is it lost forever? Maybe. Could it suddenly be reactivated and sell tomorrow? Maybe. But what does that matter, because the association between the person and the imagery is already so strong. And this is far from the only example, I could easily do the same experiment with the photographer Ruff Draft. This leads to the question how much does authenticity matter, or does the entire notion of authenticity need to be revised in this context. What happens when the derivative becomes more recognizable than the original? What if someone with ill intent bought CryptoPunk #1060 and started using it as their avatar? What if somehow Chopper came into possession of CryptoPunk #1060, would he change his identity to face the other direction? I somehow doubt it. We know that the value of a CryptoPunk can be increased because of how it’s used, so could the value of one also be decreased because it’s not used, or because of how a derivative is being used?
I don’t think the answers to these questions are as cut and dry as many of us would like to believe, and that complicates the relationship between ownership and identity, as well as how much value (financial and social) words and concepts like “original” or “official” or “authentic” hold. If actions speak louder than words, does that apply to avatars as well? Is this a new example of “use it or lose it?” Earlier this week one of the most iconic and recognizable CrytpoPunks sold for $4.5 Million dollars to an anonymous buyer. The previous owner held it for almost 2 years but didn’t use it as his avatar – will the new owner embrace and put to use this newly acquired identity they just spent so much money on, or will they neglect it and let someone else usurp them?
I’ve been a fan of and have written about CryptoPunks for a long time now. Ever since V1s resurfaced in early 2022 there’s been a lot of confusion around the collection. If that first sentence lost you, perhaps read my earlier article explaining CryptoPunk versions before going any further. As I get questions regularly from people and I see the same errors pop up, I thought it would be helpful to address some of the most common misconceptions, with citations, to help everyone better understand both the history and current events. I recognize this is somewhat of a controversial topic but I think everyone is better served by understanding the actual facts, rather than having to make decisions based on rumor. Here are the 10 things I see mixed up most often:
1. “They were never intended to be released” or “They were just a beta release” This is probably the most widespread narrative and it’s incorrect. The V1 CryptoPunks contract was published on June 9th, 2017, and released to the public. Of course it wasn’t called “V1” at the time, it was just called “CryptoPunks” and for several weeks these were the only CryptoPunks that existed. This Mashable article, published on June 16, 2017, discusses the release and notes that they are still being claimed. It’s very clear from this article that this was a real release and not just a beta test or something accidentally published. The marketplace function on the CryptoPunks contract wasn’t enabled until they were all claimed which happened on June 17th, 2017 and it was at that point the marketplace bug was discovered. The V2 contract was published on June 23, 2017. Also telling, On March 4, 2018 Larva Labs filed a visual copyright registration for “CryptoPunks” citing a publication date of June 9th, 2017 – so in 2018 LarvaLabs is on legal record stating that CryptoPunks launched on June 9th, not June 23rd and that registration remains active today.
2. What exactly is “The Bug”? What “The Bug” is: In the marketplace, eth from a sale is withdrawable by the buyer, not the seller. What “The Bug” is not: A problem with the image, a broken token, a broken “picture frame”, an invalid NFT, a non-functional NFT, a backdoor to your wallet, etc etc etc… Two points which need clarification here are 1) if you are not using the marketplace function, there is no problem with the V1 contract and no risk in holding the token; and 2) the marketplace actually functions exactly as it was written. The problem is that they way LarvaLabs wrote it and how they intended to write it, are different. This seems like nit picking but it’s an important detail LarvaLabs have expressed themselves repeatedly – this was the first solidity contract they ever wrote and they simply misunderstood how the code worked. It’s not a “ooops, we put the comma in the wrong place and broke it” kind of bug, it’s the “Well that works, it just works differently than we hoped it would work” kind of bug. If you would like to see exactly what was changed between the V1 & V2 CryptoPunks contracts this difference checker link makes it very easy to understand and see just how much additional code was added in the V2 contract.
Important Note: The marketplace in the V2 contract fixed the bug of the V1 marketplace so Ether from a sale properly goes to the seller now, and it added bidding which is massive new feature that didn’t exist in V1. That said, it also has its own “bug” in that bids can be frontrun and this happens regularly. What this means is Anne has a CryptoPunk but it’s not listed for sale. Billy makes a bid for it. Anne accepts the bid that Billy placed, but Chip was watching and using a script, instantly places a bid on Anne’s CryptoPunk that is a fraction of an eth higher than the bid Billy placed, and so Chip buys the CryptoPunk even though Anne accepted the bid placed by Billy. The marketplace can “accept bid” but it doesn’t specify which bid. This is a real problem that has caused a lot of heartbreak over the years, so it’s not like the V2 marketplace contract is somehow perfect either. This, as well as the lack of ability to place wETH bids on multiple CryptoPunks simultaneously (as is the norm on modern marketplaces) is a frequently discussed pain point.
3. Without a wrapper, V1 CryptoPunks have no image. This one is slightly less straight forward only because most of our expectations are built on how modern NFTs (ERC-721 & ERC-1155 tokens) function. CryptoPunks predate these standards and are actually a modified ERC-20 token (more closely related to wETH, $APE, Matic, etc than to BAYC or CloneX) and unlike modern NFTs that each have their own image, both the V1 & V2 CryptoPunks contracts point to one single image that contains all 10k CryptoPunks. The token references a coordinate on that image and a web front end can then visualize which CryptoPunk in that one image the token is referencing. I must stress that this is the situation with V1 & V2 CryptoPunks. They are identical in this respect. Modern marketplaces like OpenSea or Rarible can display CryptoPunks because they’ve written custom code to handle the requirements of that specific contract function – something they’ve done because of the popularity of CryptoPunks. But this is also why you can’t buy or sell CryptoPunks on OpenSea or Rarible unless you first wrap them into an ERC-721 token. So again to be clear, when it comes to the image both the V1 & the V2 CryptoPunks function exactly the same, and in fact point to the exact same image.
4. What the V1 wrapper actually is/does, or “Wrapping it makes it no longer real” As I mentioned in point 3, CryptoPunks are not ERC-721 tokens so they don’t work natively in environments designed for ERC-721 tokens. If you want them to, then you need to “wrap them” inside an ERC-721. Think of it like a box you might use for shipping something to a friend in another city. The wrapper holds the original CryptoPunk token and gives the holder an ERC-721 token which works natively in those environments. At any point the holder of the ERC-721 token can “unwrap” it and receive their original CryptoPunk token back. Since “the bug” is only in the marketplace function, wrapping it resolves this and allows the CryptoPunk to be traded safely on modern marketplaces. In fact this exact thing has been done for years with V2 CryptoPunks as well to allow them to be traded on other marketplaces. Both V1 & V2 CryptoPunks need to be wrapped in order to trade them on marketplaces like OpenSea, the only technical difference is that V2 CryptoPunks can also be traded on their own built in marketplace as well. A quick search on the CryptoPunks Discord shows that selling CryptoPunks on other marketplaces has been a recurring community ask going back many years.
5. “There was community consensus to migrate away from the V1 contract” At the R.A.R.E. Digital Arts Festival in 2018 Matt Hall from LarvaLabs explicitly states on video that it was a controversial decision to make a V2 contract. Matt states that many people in the community felt that the thing they owned was in the V1 contract and the creation of a new contract would cause problems and complicate things (which it did, as evidence by the fact that I’m even writing this now in 2022), but he says they chose to ignore those concerns and “just hope for the best.” When they published the V2 contract they changed the official Marketplace to interact with the new contract rather than the old one, so the community had no actual choice but to move on with the new contract, for better or worse. A tweet by John during this time suggested they understood this forcing mechanism. This was not the last time Larva Labs would butt heads with their community and in their own statement regarding the recent sale of the CryptoPunks IP to Yuga Labs, they state “as this category of “Profile Picture Projects” (PFP) grew into an industry in itself, we found ourselves less and less suited to the operation of these projects. Our personalities and skill sets aren’t well suited to community management, public relations, and the day-to-day management” suggesting that “community consensus” was never something they were too deeply invested in.
6. Larva Labs (the artist) has disavowed V1s, and the artists intention matters most. Matt & John at Larva Labs are brilliant artists who clearly have visionary foresight and have helped shape the world of digital collectables we know today, arguably more than any other artists. You can argue, as I have, that the entire current genre of 10k pfp collections are directly inspired by CryptoPunks. Another LarvaLabs project, Autoglyphs, is unquestionably the inspiration for a whole other genre of on-chain generative art now most commonly associated with Artblocks. What Matt & John are not is consistent with their statements. For example between 2017 and 2022 they made a number of conflicting and contradictory statements about what rights CryptoPunk owners had to their individual CryptoPunks, eventually resulting in some high profile community members walking away. In the 2018 video I mentioned previously, during the Q&A session at the end someone in the audience informs Matt that his claim that CryptoPunks were the first NFT on Ethereum is inaccurate as CurioCards launched several months earlier. Matt responds saying “Argh! We didn’t know so we just said it and figured if we were wrong someone would tell us, guess I have to change the slides now – so we were the second NFT.” Thanks to blockchain historians we now know that there were at least 8 NFT projects launched on Ethereum prior to CryptoPunks, but LarvaLabs never actually changed those slides, and continued making the claim that they were the first for several years. In fact the claim is still live on the welcome page of the CryptoPunks Discord server today. My point here is that just because an artist says something about their work doesn’t necessarily make that true, nor does that always match what they said about their work before or what they might say about it later. I don’t think anyone would say “Well LarvaLabs intended CryptoPunks to be the first NFT on Ethereum, and they are the artist and intentions matter most, so they are the first even though others did it before them.” We are still bound by the laws of time and intentions don’t supersede that. It is unquestionably clear that statements by LarvaLabs about the V1 CryptoPunks in 2022 do not align with their own statements in 2017. To be perfectly honest, their statements in 2022 don’t even match their other statements in 2022. Early in the year they were found to be selling V1 CryptoPunks from their personal accounts while concurrently stating that they were “not official” from their brand account, and then filed a DMCA against the NFTs they’d just sold penalizing the people they sold them to. They apologized for this and recognized that selling something privately while also disavowing it publicly was problematic to say the least. There are two ways to read this, either they were intentionally committing fraud or they were just artists embarrassed about early work and misstepped while using “artistic license” to massage history a little bit. I tend to believe the later. And that’s fine, an artist can not decide they don’t like early work and that they don’t want to draw attention to it, but they can’t say early work that has already been sold to the public is no longer their work because they decide they don’t like it. Imagine if Damien Hirst said he no longer liked his Spots paintings and didn’t consider them to be official anymore? Would they suddenly no longer be Hirst paintings? No, they would simply be Hirst paintings that he doesn’t like.
7. “Hemba stole 1000 CryptoPunks” or “So many V1s were stolen that LarvaLabs had to start over to rescue them” At this point we are venturing into lore and what is firmly classifiable as “scene drama” but let me try to cut through some of that with facts rather than emotional reactions. LarvaLabs themselves have stated that they don’t consider anything that happened with “the bug” to be theft, the contract worked exactly as they wrote it to work. No one hacked it or found a backdoor, it was not exploited or anything like that, it’s just that what the contract was written to do and what they had hoped it would do were different things. Hemba was the largest single claimer of CryptoPunks, legitimately claiming over 1000 CryptoPunks the same way the every other claimer did between June 9th and June 17th. He was also one of several people who discovered “the bug” on June 17th and used the contract function to “buy” a number of CryptoPunks and then withdraw the ETH they’d just used to buy them. There were approximately 89 transactions where this happened and Hemba was responsible for 63 of them, so he has quite the reputation. However these transactions were reverted with the release of the V2 contract, and since then Hemba has made attempts to return the V1 CryptoPunks that he received without paying for them to the people who were selling them. To date he’s returned 40-something CryptoPunks and continues to actively try to contact people to return the rest.
8. “V1s are just a Hemba grift taking advantage of suckers” or “V1 Punks are just Phunks who…” You may be starting to see a theme here, I don’t think that’s accidental. Controversial characters attract attention, and that leads to gossip but again let’s try to separate that from the facts. Hemba did not make nor commission the wrapper currently being used to trade V1s, it was made in early 2022 by a developer called FrankNFT. Nor is it the first wrapper for V1 CryptoPunks, as there was an earlier wrapper in use in 2021 made by 0xfoobar. Importantly, Hemba has not been selling pieces from his V1 CryptoPunk collection, even when the floor briefly reached 20 eth in early 2022. The majority of V1 holders are either original CryptoPunk claimers, collectors of historical NFTs or fans of CryptoPunks. People who are passionate about a subject often talk about it (as I do here) and this has wrongly been painted as shilling by detractors and sadly that narrative persists. Another related narrative is that somehow the team behind CryptoPhunks or Not Larva Labs is also leading the V1 CryptoPunk community – this is easily debunked but for some reason persists. This assumption likely comes from the fact that V1 CryptoPunks are available to trade on the Phunks’ marketplace Not Larva Labs. This was not a collaboration rather it was a dig by NLL at LarvaLabs that simply took advantage of the blockchain functionality – anyone can make a marketplace and chose to sell any NFTs they want. Some of the people involved with NLL were also behind “ApeMarket” (now part of the Yuga trademark lawsuit) but the fact that BAYC NFTs were planned to be for sale on ApeMarket doesn’t mean BAYC/Yuga was a collaborator. Correlation does not imply causation, it’s just how decentralization works.
9. “V1 Owners can’t use them as their PFP, that violates copyright” This is one many people feel very passionately about though there’s little legal support for this position. While the new license terms provided for CryptoPunks by YugaLabs is much more detailed it does discuss rights which potentially do not exist. It would seem the authors of these terms know that as there are numerous caveats throughout with statements about rights with “if they exist” or “may exist” qualifiers. The hard evidence is that there is only one copyright registration on file for CryptoPunks and it’s for the entire image of all 10k CryptoPunks. Copyright lawyer Brian L. Frye has written a paper which questions if individual CryptoPunks meet the standards to be copyrighted, and a 2012 legal paper by Tyler Ochoa asserts that it’s unlikely that existing copyright law is applicable to avatars anyway. For most of the last 20 years people have used anything they want as an avatar on any number of services only occasionally bumping into an individual platform’s Terms of Use. My read is that if someone could file a copyright violation against someone else for an avatar we would have seen that plenty of times by now, so I think this claim is more wishful thinking than reality. But Twitter is full of people using CryptoPunks that they don’t own as avatars so if someone wants to file a lawsuit I’d be interested to see how it plays out.
10. “V1s aren’t real!” This is easily the most subjective argument on the list, as it ultimately depends on what any individual defines as “real” for themselves. Even LarvaLabs in the height of their criticism and backpedaling stopped short of that claim, instead stating that they were not “official.” I think that the classification of V1 as the original and V2 as the official makes a lot of sense. I also think it’s important to recognize that “official” is a title bestowed by someone else, in theory Yuga Labs could make a wrapper for V2s so that they function natively in ERC-721 ecosystems and then declare that the wrapped version is now the official collection. Not that they would, but the point there is no decisions by companies or investors can change the “original” status, but “official” is a bit more flexible.
So what is “real”? For me, the V1 “CryptoPunks” contract was written by LarvaLabs, published to the Ethereum Blockchain, the tokens were distributed to the public, and they spoke to the press about it. That’s about as real as it possibly gets. One might even argue that’s more “real” than an NFT minted on a platform’s shared smart contract, or something like XCOPY’s Grifters which were minted through Async for example. As a collector who understands the importance of provenance, I always prefer that an artist mints their work from their own wallet (or one they control). In the art world there are two relevant examples that come to mind: The Warhol Foundation and Banksy’s Pest Control. Both organizations are tasked with validating works by the artists. Warhol and Banksy are both incredibly prolific and have a lot of fraudulent copies floating around so having an authoritative body which can say “yes this is real, no that is fake” is really helpful. With Warhol, there is work that was made in The Factory with Warhol’s screens by Warhol’s assistants and The Warhol Foundation needs to definitively say “yes that piece is technically identical to this other piece but it’s not ‘real’.” This gets tricky because in some cases Warhol had his assistants do the work for pieces that are considered “real.” Similarly Pest Control has made it clear that Banksy will not validate any of his street work that has been removed from the street. So Banksy could put a piece up, everyone knows it’s a Banksy, but then someone cuts that part of the wall out and tries to sell it and the official line from Pest Control is that it’s no longer a real Banksy. How will that policy hold up in 100 years? I think it’s hard to believe that will be honored in the long term. If we found a painting by van Gogh in an attic with a note from him saying “this sucks, I never should have painted it, I don’t consider it my work” would the art world collectively say “throw this crap in the trash!” or would they celebrate a “lost” van Gogh that had just been discovered, regardless of what the artist personally thought about it?
Those are extreme cases to illustrate some pretty fantastic grey area, however I think the beauty of the blockchain is that these issues are negated. If Warhol minted all his work there would be no question of something was his or not. If Banksy minted all his work similarly all questions of authenticity would disappear. Luckily with LarvaLabs they did mint their work, and the blockchain evidence is there to document it.
Conclusion and my prediction… At the risk of sounding dismissive I think the argument over what is “THE CRYPTOPUNKS” kind of loses the plot. This is history and culture and all of these things play into the big picture, regardless of what value any individual places on any single element. V1, V2, Larva, Yuga – these are all fascinating chapters in a much more interesting and larger story. I’ve stated publicly long before I ever owned V1 or V2 CryptoPunks that I think these are incredibly important cultural artifacts which have had immense impact on both how we think of digital identity and the concept of collectable art online. I now own both, and I imagine an increasing number of collectors will begin to seek out “pairs” as I have. Having the original and the official feels like a complete set. There’s something like 120-ish wallets right now with the V1 & V2 of the same CryptoPunk and I suspect that number is only going to keep growing. And what about Yuga? In a recent interview on the subject a Yuga representative stated that they have “no current plans” for V1s, but they also own over 1000 of them. They know there’s a vibrant and active V1 community, which has a quietly growing overlap to the V2 community. If nothing else I believe Yuga is interested in building community, not fighting against it the way Larva did and that interest will inform their future steps. My prediction is that this is something they will eventually capitalize on, possibly by creating their own wrapper for V1s and treating them like the Mutants to the BAYC, or maybe they will make their own wrapper for V2s to address the marketplace issues. I think most people still don’t understand what V1s even are, and as more people learn the history and context I can’t see how their popularity won’t continue to grow.
The only one thing I’m 100% sure of however is that no matter what I say about any of this, someone will criticize me for it. Oh well. I hope this you found this article to be helpful and I made this handy chart to help you navigate your own explorations of the NFT space:
After talking about it and thinking about it for months, weekend our family sat down and finished up a 3,333 piece generative NFT project, with my son doing the lion’s share of the art. He’s 12 now and has spent massive chunks of his life building amazing structures in Minecraft and we all really enjoy pixel art so it was natural for him to take the visual lead. Of course Tara and I contributed some art as well. While we love PFPs, we also wanted to do something a little different and based this project on bookshelves and the stories and inspiration they can hold. There’s a lot of fun stuff hidden in this collection as well as some 1/1s that we can’t wait to see who finds.
View the collection directly on OpenSea or check the verified contract on Etherscan or follow the project twitter account for news & updates. We used Bueno (a tool built by the Robotos team) to do the generative build and smart contract work and it was super smooth. We’re so excited to roll this out and see what stories this leads to next!
Recently Boris asked me if I had any updates to my Personal Uniform. Longtime readers will know that for more than a decade now I’ve endorsed a kind of “find one thing you like a buy a bunch of them so you don’t need to think about what to wear” policy which I call a personal uniform and I’ve written about it over the years updating and refining as needed. I told him a didn’t as I’ve basically not left the house in 2 years. But it got me thinking and that’s not exactly true. I last updated in 2019 and looking back at that now I do have some revisions.
Pants & socks haven’t changed except for the addition of some Stance socks. I got a pair in a gift bag a few years back and they were pretty good and recently picked up several more in a simple design during a sale and am liking them quite a bit. They don’t have the “lifetime guarantee” like Darn Tough does but they are also a little more causal. Underwear has consolidated 100% into the David Archy bamboo boxerbriefs. I can’t really recommend merino underwear or T-shirts anymore, I like them in theory but in practice they just fall apart – especially the lighter weight stuff – and the environmental trade off isn’t worth it. Never say I don’t challenge and test my own positions from time to time. Shirts/tops where the most revision has happened and I’ll explain how that happened.
In Tokyo I would often go by the Adidas store in Shibuya on the everlasting hunt for vegan Superstars, but also to check out their small run collabs and test products. A few years ago I picked up Japanese made loopwheel hoodie that was a joint venture between Adidas and Reigning Champ. I remember reading into it at the time but it didn’t really stick with me beyond knowing that RC was a small boutique brand attempting to make the perfect example of classic athletic wear, overspec’d in everyway. As Gibson fans know this is the quintessential Japanese fashion brand thing to do, but to my surprise RC wasn’t a Japanese brand, they were Canadian. I really liked the hoodie and still wear it regularly, through Amazon Japan I ordered a crewneck sweatshirt for Bujinkan classes and was equally impressed with the production and quality – though the price kind of hurt. I think with conversions and such at the time it worked out to be around $300.
After moving from Tokyo to Vancouver I was pleasantly surprised to learn there was a RC store a few blocks from my house and decided to revisit the brand. I learned that it was started by the same person who’d created Wings+Horns, a brand I’d learned about many years previous from an excellently made collab they’d done with the Ace Hotel. If you think this is starting to feel like reading liner notes on vinyl records to find mentions of other musicians to check out that’s exactly how it felt to me as well. I was also delighted to find that buying locally in Canada was much more reasonable in the pricetag department than as imports in Japan.
Last year I picked up a couple of “lightweight” t-shirts from them and have been wearing them pretty regularly. The build is A+ however the material was a bit too lightweight for my taste and the collar a bit too wide. I like a tighter neck. So I stopped into the shop recently to see if they had a more mid-weight option that would work better for my own personal quirks. The guy at the shop gave me two really solid options – their new “copper jersey” which is kind of exactly what I wanted, with the bonus of having copper infused in the cotton which fights off odor and bacteria – I got a few of these in my standard Large size. He also told me about their mid-weight standard t-shirt which is cut a bit larger, so given my preference he recommended a Medium. This worked incredibly well, I only bought one but I like it so much I’m probably going to swing back and pick up 2 or 3 more. I think the copper jerseys are probably a summer specific piece, while the mid-weight Ts could be a year round thing. They will be a nice contrast for the insane super heavy duty Iron Heart Ts I picked up in Japan just before moving which classifies somewhere between a short sleeve sweatshirt and body armor.
Anyone who has seen me recently knows that I’ve grown partial to classic track jackets. Don’t get me wrong my normal black crewneck sweatshirt is still the goto, but switching to a simple Fred Perry or Puma track jacket works well for most social occasions and temperatures.
Amusingly perhaps only to me, my “style” hasn’t really changed all that much in the 12-ish years I’ve been blogging about this, or the 10 years before that when I was talking about it – brands have shifted a bit, perhaps jointly because I can afford more than what happens to be on sale this week at Wal-Mart and because craftsmanship and simplicity of classic designs has found a market allowing higher end production of these basics.
The TL;DR that you need to know before I get into this is that CryptoPunks is a “digital collectable experiment” from 2017 which predates but is also credited with kicking off the whole NFT craze, in fact helping define the standard. I wrote about the different versions of them earlier this year. One could argue, and I do, that most of the biggest and most popular NFTs are derivatives in one way or another of CryptoPunks. Randomly generated from a collection of traits, there are 10K individual CryptoPunks which people often use as avatars. Separately, CryptoPhunks is a 2021 derivative project which literally copied the entire CryptoPunks collection and flipped it horizontally (in either a cash grab or protest, depending on who you talk to and at what point in the story you are referring to – I plan to write more about this in the future), creating a mirror image and kicking off a huge debate about appropriation, fair use and IP rights in this wild west of digital art.
The CryptoPunks collection is incredibly influential, having spawned hundreds/thousands of derivative projects as well as millions of nasty replies from haters on Twitter with accusations of being a “crypto bro” for anyone who dares use one as their avatar. They get referenced all the time in clickbait articles proclaiming shock and awe about how much one of them sold for recently. Point being, people know about them. As a connoisseur of culture with impeccable taste I’ve really enjoyed seeing the creativity they inspire and I’ve collected some of my favorite derivative works in this little virtual gallery if you want to look around. I’ll be expanding that in the near future but it’s still pretty interesting at the moment if you want to follow the thread of inspiration a bit.
Recently I discovered an artist called PIV who has been doing studies of CryptoPunks in relation to fine art, namely Abstract Modernism and work in that orbit. I picked up a piece called “Pablo Picasso” which references the famous 1953 photo of Picasso by André Villers.
l: Villers 1953 / r: PIV 2022
For the less visual and more musically inclined this is like Johnny Cash covering Nine Inch Nails “Hurt” or Guns N Roses covering Wings “Live And Let Die” or Redman referencing Cypress Hill with “Sawed Off Shotgun, Hand On The Pump.” It’s one artist giving a nod to another artist. If you know the reference it’s an immediate reward, if you don’t and you are curious it’s an invitation to discover work you might have missed. I love this kind of thing so fucking hard. So in this “Punkism” series PIV is very intentional with their work, limiting their palette to colors and pieces of CryptoPunks.
Putting CryptoPunks in this context of Pop Art is kind of brilliant especially when you consider the influence that Pop Art has on contemporary culture it’s hard to argue that CryptoPunks don’t have that same influence on digital art and culture right now. So it’s a fitting comparison. Obvious as it may be, you can’t talk about Pop Art without acknowledging Andy Warhol and indeed PIV did that directly but also almost in passing with an earlier work entitled “Six Marilyns.” This piece inspired a larger collaboration with Tom Lehman (former CEO of Genius.com which itself was previously Rap Genius and focused on annotating song lyrics to help people understand the references artists were making – just to bring that around even further). The pair teamed up to create a collection of “Marilyn Diptychs” which, using code most often used to create generative art like the CryptoPunks themselves, they made endless variations on a single CryptoPunk which itself looks a lot like Warhol’s Marilyn drawing a direct reference to Warhol’s diptych.
“Foundation Supports Him” PIV & Lehman, Generative 2022A collection of “OC Marilyn Diptychs” by PIV & Lehman, 2022Marilyn Diptych, Warhol, 1962
Let’s talk about Warhol’s Marilyn Diptych for a second – did you know this was not initially intended to be a diptych? Art collectors Burton and Emily Tremaine were visiting and saw the two pieces displayed next to each other and suggested that they should be paired, which immediately seemed like the obvious choice. But Warhol’s Marilyn image itself is worth spending some time with. I really like Tina Rivers Ryan’s description of the work, she writes:
“Warhol’s use of the silkscreen technique further “flattens” the star’s face. By screening broad planes of unmodulated color, the artist removes the gradual shading that creates a sense of three-dimensional volume, and suspends the actress in an abstract void. Through these choices, Warhol transforms the literal flatness of the paper-thin publicity photo into an emotional “flatness,” and the actress into a kind of automaton. In this way, the painting suggests that “Marilyn Monroe,” a manufactured star with a made-up name, is merely a one-dimensional (sex) symbol—perhaps not the most appropriate object of our almost religious devotion.”
“Shot Sage Blue Marilyn” Warhol, 1962
Like most of Warhol’s portraits he didn’t ask permission which occasionally caused legal issues, but also directly relates to the issues of appropriation and fair use that surround the CryptoPunks and many of their derivative works, and in fact one might say much of the entire NFT market. Warhol’s intentional repetition of his images, which would degrade over time as screens were used slightly changing each one, were meant to both desensitize people to the image, but also reclassify the icons already present in his audience’s cultural awareness. In many ways, a 10k avatar collection does much of the same things, though I’d argue that wasn’t the initial intent.
Coming back to these new Marilyn Diptychs and to play with the tech even further, if you own one of the diptych NFTs you can extract any of the individual Marilyns from the piece into its own profile picture/avatar which is now not only a derivative of Warhol but of the CryptoPunks as well. Again, I love this.
But as I said before, this is conscious. It’s intentional. It’s humans seeing one thing and taking something else and bending it to look similar to the other thing. Which is the art of it all, but it also got me thinking about the generative aspect more.
As many of you know last year I collaborated with my longtime friend, artist Shepard Fairey, on a generative NFT project called DEGENERATE/REGENERATE where we used scans and elements and details from his previous work as well as some of his better known iconography and using this kind of generative tech came up with 7400 individual pieces that are randomly generated but true to his aesthetic. They looked great, which we expected, but what we didn’t expect was that they would combine some of his work in ways he hadn’t previously considered sparking new inspiration which he’s taking back to his physical work. So you have this cycle of inspiration – human inspiring the computer, the computer then inspiring the human. The ever evolving body of work now has DNA from both going forward. It’s pretty exciting and I expect you’ll hear more directly from him about that in the future. But I’m getting off the point, which is about the ghost in the machine, so to speak.
PIV’s work is intentional. They consciously decided to make art that references other art. But CryptoPunks are not intentionally referencing other art. They are just a collection of individual traits – hair color, style, eyes, mouth, glasses, etc thrown into a generator which was told to spit out a 100×100 grid with 10,000 individual combinations (This is a little known fun fact, unlike most avatar NFT collections today which generate 10,000 individual images, CryptoPunks is just one single image with a grid of the individual punks). It was an art experiment – no one knew how it would work out or where it would lead.
CryptoPunks, LarvaLabs, 2017
This got me curious, without the human hand and intention – could I find a similar but unintentional reference? I narrowed down the traits to sort through and began hunting, eventually landing on CryptoPunk #3725 which is, to my eye, damn close to Warhol’s Marilyn. The only real discrepancy being the green eye shadow. Blue would have been better and there is a blue eye shadow trait but it doesn’t appear with the rest of these traits – the mole, the blond hair, pale skin, etc anywhere in the original 10k CryptoPunks collection. But there was something about it that still wasn’t right. It was facing the wrong way. I immediately thought of CryptoPhunk #3725.
I get so excited thinking about the randomness that led to its creation. A script blindly and emotionlessly assembles a hodgepodge of traits – essentially a realization of the infinite monkey theorem – and makes an almost perfect match. Years later a reactionary protest act puts on the finishing touch. Neither of these two actions intend on this result, but we end up here nonetheless.
I knew it was a crazy long shot but I reached out to the owner of Phunk 3725 and made an offer. To my surprise and delight, they accepted and I am now the owner of Phunk 3725. This piece draws a direct, yet accidental, connection between these two eras of art. It’s incredibly important, and I’m psyched to be its caretaker.
Since it’s been a topic I’ve been yapping about recently a few people asked me for a quick explainer on all the Cryptopunks V1/V2 stuff so the other night I did just that in a Twitter thread but I thought I’d turn it into a blog post as well for easier future reference.
If you’ve spent 4 seconds in the NFT space or 4 seconds near the NFT space or just know some people have some crypto art or something you’ve seen Cryptopunks so I’m going to assume you know what I’m talking about when I say “punk” in this context. There’s no questioning the influence and significance of cryptopunks, there are a bazillion derivatives and they have made headlines for selling for bazillions of dollars. Hours ago in fact Punk #5822 sold for 8000Ξ which today converts to just shy of $23 Million USD. So yeah, they are pretty famous, and it’s important to understand that fame happened almost exclusively in 2021. Cryptopunks were actually released in 2017 and for most of that time very few people cared about them. Towards the end of 2020 people really started going after them and in 2021 they went nuts. But the cryptopunks everyone thinks of are actually the second version (V2).
Going back to 2017, a company called Larva Labs put Cryptopunks online as free to claim and promised the ability to trade/buy/sell them after they were all claimed. It took a few days/weeks for that to happen and once they were all claimed people started trying to trade them. But there was a problem. A bug in the code meant that if you tried to sell a punk the buyer got the punk AND the eth from the sale, leaving the seller with nothing. This is obviously a problem and as soon as it was found Larva Labs said “wait! Don’t trade them yet” and started working on a fix. Because things on the blockchain are immutable they couldn’t really “fix” the punk that were already out in the world, so they made new ones. They airdropped the new (V2) punks to everyone who had claimed the original (V1) punks and figured that was that. Potentially important detail: Larva Labs didn’t send the new punks to the the current punk holders – they sent them to the claimers. So if you claimed a V1 punk and gave it to a friend, you got the V2 punk, they didn’t.
Because the V1 punks were not really sellable everyone kind of forgot about them, and all focus was put on the V2 ones that people could easily trade. It’s worth noting that punks predate the ERC-721 NFT standard we know and love today. Cryptopunks are in fact ERC-20 tokens. In order for Cryptopunks (or any other pre-ERC-721 NFT like Mooncat Rescue) tokens to be traded on NFT marketplaces like OpenSea they need to be wrapped inside of an ERC-721 token. Wrapping is confusing but also really straight forward. It’s just putting one token inside of another. You’ve probably seen WETH which is just Wrapped ETH. Here are a bunch of V2 Cryptopunks that have been wrapped for example, and here’s LarvaLabs recognizing them. That’s apparently an important detail as some have suggested that wrapping changes or somehow negates the NFT that is being wrapped, which obviously isn’t the case. The socks your mother bought you for your birthday don’t cease to be socks when she wraps them in wrapping paper – same idea here. Anyway, for years people were happily buying and selling V2 cryptopunks both wrapped and unwrapped. But they just called them “Cryptopunks” and not “V2 Cryptopunks” because they were the only ones being traded so it was obvious what you meant. But in 2021 some people started working on a wrapper for the V1 Cryptopunks so they could be traded as well. This is where things get interesting. If you look at the incredible timeline Leonidas has assembled you’ll note that Cryptopunks is the very first 10k Avatar project on the Ethereum blockchain.
Despite claims made by lots of people, notably Larva Labs themselves, Cryptopunks are not the first NFT, but they are the first 10k avatar project. But now suddenly you have 2 Cryptopunk collections in motion. Both made by the same company, both pointing to the same art. Released within weeks of each other. Fun fact, the V1 contract calls them “cryptopunks” but the “fixed” V2 contract calls them “cryptopunksmarket” – anyway, with V1s being safely wrapped inside an ERC-721 wrapper they can now be traded, and people started trading them. Anyone who has spent any time around collectors knows that an error or a misprint or a fuckup is always super desirable – and that’s how people started to think of the V1s. They are this mostly forgotten mistake, which is appealing to some people.
And especially if you have cryptopunks because they are historically important as a lot of people claim to, then this original version of the cryptopunks released a few weeks earlier is SUPER INTERESTING! (all caps for emphasis). This is where things which are seemingly clear get really messy quickly. LarvaLabs has an unclear relationship with the IP of the Cryptopunks. I wrote a bit about this last year in relation to their reactions to some derivative projects.
From their end, LarvaLabs didn’t have a license in place before they distributed them and have taken different and conflicting positions on the matter over the years, so there’s just nothing clear to fall back on which is why it’s such a grey area. 19/ Anyway, jumping back to now – V1 and V2 Cryptopunks are now on the market. Anyone with a V1 cryptopunk who couldn’t trade it before can now safely wrap it and then sell it. Guess who had a lot of V1 Cryptopunks? LarvaLabs. In what is now largely seen as a “bad move” LarvaLabs secretly wrapped a bunch of V1 cryptopunks and sold them for a couple hundred ETH. Then went on the attack saying that V1 punks were not legitimate.
As an aside, last year I wrote about how Blockchains have the potential to become social archives, and the documented provenance for each NFT might end up telling interesting stories about the history of specific NFTs and that’s exactly what just happened here. The 39 V1 Cryptopunks that were wrapped and sold by LarvaLabs are already being referred to as the “rainforrest punks” and have become especially desirable among some collectors in what is basically the Streisand Effect for Web3.
So LarvaLabs then sent a DMCA to OpenSea as they have been known to do, and OpenSea complied by taking down the listing for the V1 punks. Now if you’ve been following along this far you know that V1 punks were made by LarvaLabs. So they kind of just DMCA’d themselves. This is akin to Nike making shoes with a white swoosh, selling them and then deciding they want the swoosh to be red and then claiming infringement against someone who bought the white swoosh Nikes trying to resell them on ebay. In other words it makes no sense. V1 punks were made and sold by LarvaLabs. They can’t decide after they are already sold that they don’t like them and then claim they aren’t real, or that the secondary market is infringement. So of course the DMCA notice was appealed.
That happened yesterday, so now LarvaLabs has 10 days to respond (or not) until we get to the next chapter in however this plays out. At the moment V1 punks are not being sold on OpenSea but are being sold on their own marketplace and on LooksRare. I don’t know if those sites received DMCAs and just ignored them or if they didn’t receive anything, doesn’t really matter though. What happens next however is going to have very serious implications no matter which way it goes. If the DMCA is upheld the secondary market for almost all NFTs is suddenly in legal question. If the DMCA is dropped LarvaLabs will have to accept that their flagship IP isn’t as locked down as they thought, and that there are now 2x as many cryptopunks out there.
Interestingly enough, V2 punk owners have been complaining about how LarvaLabs has been handling IP for quite a while now leading a number of high profile punk owners to sell theirs in protest. So in some ways V1 & V2 owners have a common foe. Though maybe foe is too strong a word. LarvaLabs did make these cool avatars which everyone loves, even if their community relations/communication has been a bit lacking since then. And a lot of V2 owners actually own V1s as well, so it’s not really 2 different audiences.
March Update: In an unexpected surprise turn of events LarvaLabs announced that they sold the IP for CryptoPunks to Yuga Labs, producers of the Bored Ape Yacht Club, who immediately announced that they would not be pursuing any of the DMCAs filed by LarvaLabs and also that they would be granting commercial rights to CryptoPunk owners. As part of the deal LarvaLabs transferred their CryptoPunks to Yuga, including some 1000 V1 punks. Almost immediately the V1 collection was reinstated on OpenSea.
But what about V3? V3 Punks is a totally unrelated project created by unrelated fans. It’s just a fun nod to the whole project distinguishing itself as different but also promoting unity and joy, which is kind of nice. Personally I’ve really enjoyed the very rich derivative world that Cryptopunks has spawned and I think the project is incredibly significant. I’ve bought pieces from a lot of the so called “shitpunk” derivative projects over the last year. I also really nerd out about the IP stuff which is obvious from last years article. I bought some V3s because I think it’s fun and I recently traded an NFT I received for free for a V1 because I think it’s a cool piece of history. I have no idea where this will go, or how that will impact values of anything. None of what I’m talking about should be seen as endorsements or speculation, but I find it super fascinating and look at it kind of like collector memorabilia. Anyway, that’s my quick catch up. We’ll see what happens next!
Let’s talk about NFT projects and “the floor.” As you likely know “the floor” is the absolute lowest price at which you can buy a piece from an artist or from a collection right this very second. This comes from the “price floor” idea in the Law of Supply and Demand where there is a minimum viable price that something must be sold for in order to cover the costs of supplying it. With digital artwork you have different production concerns so “price floor” became “floor price” and is now just called “the floor.” Let’s unpack this a bit more.
First and foremost it’s important to understand that the value of anything is decided by two people. The buyer, and the seller. Other people might have an opinion about it but that doesn’t matter. If I want to sell you something and you agree to the price, it irrelevant if your neighbor thinks that’s a good price. With retail prices of various products a significant amount of work is done to decide what the public will accept as a reasonable price. With used, secondary, etc sales it is more hands on. Craigslists, eBay, your local farmers market, a yard sale, whatever – all of this commerce depends on just two people agreeing on a price and it’s understood that sale stands alone and it’s indicative of an entire market. This is why people walk away from a yard sale saying “I got such a good deal on this lamp!” rather than “I can’t believe the floor price on hammers is crashing.”
I should take a moment to give some context as to why I think I’m qualified to run my mouth about shit like this. Between 1999 and 2007 I co-owned and operated an art gallery called sixspace, originally in Chicago and then later in Los Angeles. We produced monthly exhibitions by many artists including some that we directly managed as well. In addition to our in-house exhibitions we also collaborated with other galleries on events and participated in global art fairs. After the gallery closed I maintained relationships with both artists and collectors which have turned into multi-decade friendships. An art collector myself, I began buying work from artists and galleries in the mid 90’s and nearing 30 years later almost every inch of my living space (and probably too much storage space) is filled with art. So while I agree that the NFT space is too new to have experts about any of it, I have a lifetime of experience buying and selling art.
Like all art, most NFTs are illiquid. This means just because someone wants to buy something doesn’t mean there is anything available at a price they are willing to pay. Similarly just because someone wants to sell something doesn’t mean there is anyone willing to pay the price they are asking. I own pieces by world famous artists and if I wanted to sell them It would take weeks/months of working with dealers and/or other collectors to find someone who wanted to buy them at a price I’d be comfortable taking. That’s illiquidity. If it was liquid I would just snap and they would be sold but that’s not how most art works.
With stocks or other investments it’s less of an issue as all shares are equal, with artwork there are more details to consider. Not the least of which is aesthetics, that is what does this piece of art actually look like? Not everyone buys or sells art for the same reason. Not every single piece created by an artist is the same. In the physical art world there are artists I love with pieces I’ve chosen not to buy because they just didn’t work for me personally. Maybe the color or the theme or something was just not to my taste, but another piece by the same artist was a direct hit. With NFTs, especially with larger collections how it looks plays into what someone is planning to do with it, as does various functions or rarities – so trying to project the demand for any one piece onto an entire body of work is a mistake.
Additionally, “the floor” lacks any context. It is ignorant of what other sales might be happening in an artists body of work (or in this case an NFT collection), it is ignorant of what personal, medical or business issues might be going on in the sellers life. The assertion that “the floor” says anything about anything other than what one person is willing to sell a piece for is absolute ignorance. And because these works are largely illiquid, if someone needs to get liquid fast – perhaps they have another opportunity they’d rather pursue or an emergency medical expense or any number of millions of reasons they might want to sell, this often means they are going to have to sell something below it’s potential value. Because again, lack of context. If a work is offered for sale for $1000 and someone buys it for $1000, all anyone knows is that it sold for $1000. Maybe the buyer would have paid $1500. Maybe the seller was willing to go down to $500. Who knows? Conversely, the very fact that a piece is available to be purchased at a “floor” price means currently, at this moment, no one is willing to pay that price being asked. If they were, it wouldn’t be for sale, it would be sold. So at any given moment “the floor” can be above or below the actual value of the work. Sometimes both at the same time.
Much more useful metrics for gauging current demand for a project are average sale price over some period of time (24h, 7d, 30d, etc which takes into account all the mid and higher end sales missed in “floor” discussions), what % of the collection is for sale and how that is changing over time (a decreasing % shows increasing demand), and how distributed the collection is. Do a few people own all of them (bad) or do lots of people own a few of them (good)? There are tools like Nansen, Icy and others which are helpful for a more comprehensive understanding.
Traders, flippers and speculators would have you believe otherwise. In any given project community would-be investors try to convince everyone listening that the “floor” is the end all be all metric for determining success or failure. The same people obsessing about “the floor” are the ones demanding roadmaps and asking about utility. Could you imagine anything more absurd than walking into an art gallery, walking up to an artist and demanding they tell you about their roadmap? Or saying “This is a lovely painting, I know exactly the place I want to hang it in my living room – but first can you tell me what the utility of this is?” Or, more egregious of all, contacting an artist and saying “I bought a piece from your gallery exhibition last year, what are you doing today to increase the value of it?”
If someone came into my gallery asking something like that I’d throw them out on the street.
An artist’s job is to make art. Making more art is the only roadmap they need. End of story. The work they made yesterday benefits and is complimented by the work they make tomorrow. Demand for work they made yesterday is increased by the work they make tomorrow. If you are worried about or trying increase the value of art work you own, hounding the artist is a waste of your time. You are distracting them from doing the one thing they are best suited to do, making art. What you can and should be doing is finding a way to increase demand for that artists work. Tell your friends, talk about why you love it, what attracted you to the work in the first place, why did you decide to buy it? As a collector, I love hearing these things from other collectors, and I’ve bought a lot of work because another collector tipped me off to something incredible. This is good for the artist, the collectors, the market and valuations.
You know what isn’t good for the artist, the collectors, the market or valuations? Crying about “the floor.” When I’m looking into a project if I see people throwing a fit about “the floor” I know that a lot of the owners bought in for the wrong reason and will be dumping soon so I would be stupid to buy in at whatever prices are offered today, rest assured they will be lower tomorrow. On the other hand when I discover something see collectors talking about how much they love the work, love the artist, love the project, I kick myself for not learning about it earlier. And because I know this, when I do see someone having a panic attack about “the floor” I know only one of two things can be true – either they are purposely trying to sabotage the valuations to drive prices down (potentially so they can buy in at a lower price) or they are an idiot. In either case, I know right away to ignore anything they say.
This all holds true in the regular art world where sales take days, weeks, sometimes months to complete. In the Digital/NFT space where sales happen in minutes, sometimes in seconds it’s even more true. Manipulation is real, and so are idiots. It’s best to avoid both. Buy art you love, by artists you respect. Do that, and you’ll never be disappointed.
In the past decade I've lived in Tokyo and Los Angeles, and now in Vancouver. I've run hackerspaces and blog networks, an art gallery, a design firm and a record label. I'm one of the co-founders of the environmental non-profit Safecast, a Shuttleworth Fellow and have been an Associate Professor at Keio University and a Researcher at the MIT Media Lab. I take photos and make noisy ambient music under the name Delay 5000 (D5K). For most of the last 2 years I've been working around NFTs and Web3. Read more about me here. I don't use Facebook.
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