This analysis of how status and scarcity evolves in a digital world was originally published on October 4, 2021 on RabbitHole’s Mirror account.
Last Wednesday, Twitter software engineer Mada Aflak posted a quick demo of the NFT authentication tool that Twitter is building. After downloading their NFTs from OpenSea, users can put their NFT in their avatar, and if properly authenticated, a customary checkmark will appear alongside the NFT to show that they are the “true owner” of the image.
Twitter’s addition of this NFT overlay is likely to bring a tremendous amount of exposure to the space. Some may feel like we’re already at the top, but web2’s implementation of incremental technologies like these could mark the beginning of another period of NFT acceleration.
And while the feature is still in development, a somewhat controversial response has already unfolded: The anti-crypto crowd is threatening to “block” anyone who uses the badge. And those within the community are torn between whether it’s just a visible representation of the elitism that already exists in crypto, or if the tool would hardwire division in a community built on the premise of decentralization.
Whether you love it, hate it, or think it’s absolutely not going to work, it’s important to keep in mind the implications of the technology that we are creating. Specifically, the movement of status and scarcity into the digital world.
NFTs as a status symbol
Flaunting a Bored Ape or CryptoPunk as your pfp has become akin to wearing a fancy watch or rare sneakers. Or, as one two-time Bored Ape owner puts it, “It’s like having a Harvard degree in the NFT space.”
Status symbols can be anything that connote a high social position, but to function effectively, W. David Marx describes them as needing three key properties: signaling costs, alibis, and cachet.
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Signaling costs: The act of acquisition must be difficult so that “possession serves as proof of exceptional assets or privilege.” In the case of NFTs, and to put it bluntly, this means that you were either early or you’re rich.
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Alibis: People need an excuse to own what the boomers refer to as “JPEGs.” Those who buy a $20M house for a three-person family blame it on “shelter.” NFT-collectors could justify their expenditures on the basis of a long-term investment, or better yet, utility as an investment (think ticketed access to a closed Discord channel).
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Cachet: Status symbols must identify a symbolic association with a high-status group. This goes back to the pfp as your Harvard degree comment. Both within and outside of web3, NFT pfps could signal a “deep knowledge in crypto, investment prowess, and familiarity with cutting-edge pop culture.”
Scarcity in the digital world
By virtue of being digital, NFTs can be replicated endlessly and costlessly. To the naked eye, there is no difference between an NFT-secured piece of digital art and the one that you might rip off of the Internet.
But then again, there have been scammers since the beginning of time. So, “what is the actual difference between an original piece of art and a perfectly executed replica?”
According to 20th-century philosopher Walter Benjamin, the answer could lie in the art’s “aura,” which he defines as “a strange tissue of space and time: the unique apparition of a distance, however near it may be.” While it’s technologically possible to create thousands of copies of the Mona Lisa, for example, none will replace the original. Standing in front of the real piece, knowing that it was touched by greatness and enveloped in history, is essential to its appeal – and market value.
What is so great about an NFT is that, unlike the Mona Lisa, it is not confined to the walls of the Louvre. While technological reproduction erodes a piece of art’s ‘aura,’ this is ultimately a good thing as it allows for art to be brought closer to the public, and thus, to be democratized.
Widespread visual access to and sharing of NFTs has become fundamental to this new-generation participatory culture of art.
An evolution of art’s “aura”
But this brings me back to my first point: NFTs as a status symbol.
The ability to transfer an NFT anywhere, and display an NFT anywhere – even in multiple locations at once – means that the status-flaunting aspects of owning a, say, CryptoPunk can be shared.
So, why the obsession over verification of ownership? I get it, people want their NFT Harvard degree, but I think a connection to a historical and emotional moment in time is more important than bragging rights. Better yet, NFTs as a utility will open up a whole new world of possibility.