First Rule of Clubhouse: Never Stop Talking About NFTs

The first unspoken rule of talking about art on Clubhouse is that all conversations eventually lead to obsessing over NFTs. On Thursday night, Sotheby’s CEO Charles Stewart was part of 90-minute conversation where other CEOs and founders of considerable companies waxed excitedly about the possibilities of NFTs or non-fungible tokens—a blockchain-based cryptographic smart contract that can also contain code for digital images and a unique digital signature—might liberate art from the art world.

One of the participants was playing four-dimensional mental chess when he presented an imagined scenario in the form of a question. He assumed Sotheby’s was planning on playing a financial role sponsoring NFTs. Without pausing he then concocted the conjecture that Stewart might be thinking about merging those funds into a tradable financial product indexed to the value of a group of NFTs.

To be fair, the title of Stewart’s Clubhouse room did include NFTs; however, anywhere else you go on the novel audio-based social network these days you’re likely to hear an art conversation shift rapidly to the question of NFTs. The art people wonder whether they can be considered art, which is a fair question; however, it quickly leads to the kind of late-night philosophical conversations that end in, “Like what is even art, dude? And who gets to decide?”

The undertone of the NFT conversation is a latent hostility toward the art world, that seemingly arbitrary system of high culture that builds value out of a system of galleries, curators, cultural institutions — and critics too. The imagined “crypto art market” ditches all of that. Maybe that’s why it feels “democratic.” But as, Kyle Chayka points out, digital art actually removes the core source of value (or at least the agreement upon value) of the actual art object. That agreement upon value is what is being contested in so many of these conversations. In our culture, unfortunately, money is proxy for agreed upon value. With NFTs everybody is marveling at the amount of money being generated by recent sales.

There’s been plenty to marvel at. Nyan Cat’s creator minted an NFT of the 10-year-old meme and made 300 Ether on Foundation last week. The price of crypto fluctuates in dollar terms. It was reported as a $590,000 sale; a week later that same 300 eth was worth $444,462. This week, Nifty Gateway sold a work by Beeple for $6.6 million. Meanwhile, Beeple’s The First 5000 Days reached a comparatively cheap $2.4 million in the first day of bidding with 13 days left before the online auction closes. That $2.4 million might seem more impressive because it’s in hard currency. But Christie’s will accept Ether for the work of art too. Beeple has agreed to take whichever currency, fiat or crypto, the buyer presents.

One important issue surrounding the explosion of interest in NFTs: it isn’t clear how much of the spending on crypto art is coming from guys who are sitting on a ton of now-insanely valuable bitcoin or other crypto-currency. To get a better sense of that, I scheduled a video chat with Jason Bailey. I had remembered that Bailey, a digital marketing consultant for start-ups and a dabbler in art data who had also been an early enthusiast of NFTs.

In 2018, Bailey had taken the train down from Boston to spend a weekend in New York at the Rare Arts Festival, an early crypto art event, where a Homer Pepe, a mash-up of digital memes combining Homer Simpson and Pepe the Frog (not the alt-right symbol, but that’s a whole other story,) sold for what was a breath-taking sum at the time: $40,000.

Bailey locates NFT excitement around Bitcoin bullruns. He reminded me that in 2017, BTC had peaked just shy of $20,000 before falling into dormancy for three years. BTC only regained those levels two months ago. Since then, it has taken two huge legs up topping out just under $57,500.

Crypto art buyers could be using smaller and smaller amounts of their more and more valuable currency.  Or they could just convert crypto into cash at these insane rates then turn the money around into art. The point is that many fear crypto art buyers are not making economic decisions about purchasing something with a portion of their income. Rather that they seem to be frantically trading symbols that only notionally correspond to what most people think of as money.

Bailey says that he’s made tens of thousands this year selling off crypto art he had picked up three years ago for just a few dollars. Casually cleaning out his digital drawers one day this year, he sold off some works he wasn’t attached to for $24,000. If you ask him, he’ll tell you his problem is that he usually sells too early.

The big question is whether crypto art is something lasting or a fad. Bailey thinks of it using art world terms. Is it closer to street art or closer to Zombie Formalism?” he asks referring to the process-driven abstraction craze of 2014 and thereabouts. Once valuable abstract artists, the Zombie Formalists became a cautionary tale in passing enthusiasm, the very kind of art that gets up the nose of so many who don’t participate in the art world. They just can’t see why paint sprayed on a canvas with a fire extinguisher is art let along worth a lot of money.

To Bailey, NFTs are much more like the murals, graffiti tags and stencils that make up the world of street art. Like street art, Bitcoin is connected to a “deep culture” of tech. That’s why so much of it refers back to an aesthetic of early computer culture.

Let’s get back to Clubhouse. The non-art people are gathering there. Crypto evangelists, tech people and a lot of digital economy corporate types who don’t code but do manage substantial businesses or have made money porting over entertainment to digital distribution seem very keen to “democratize art.” These people all know something about art and art history but they don’t feel welcomed by the art world.

Not that they really seem interested in ‘democratic art.’ Most of the art in the world is democratic. It is sold for what it cost the artist to make in time and materials. Buyers pick it up at sidewalk fairs and in galleries in vacation towns or from the artists themselves through digital channels like Etsy, several dozen online art stores and, of course, through Instagram. No one needs the blockchain to democratize art.

Nor does it seem that many of those talking about digital art on Clubhouse have any real interest in buying NFTs or displaying digital art in a meaningful way. One guy on Clubhouse asked Charles Stewart if there was a service that would provide art on a large-screen television. Another participant piped up reminding listeners that Bill Gates has a house was filled with screens displaying the world’s masterpieces. If anyone could actually afford the world’s masterpieces, it’s Bill Gates. Not to worry, the first guy was really just looking for a high-minded excuse to keep his wall-sized screen because his wife was redecorating and demanding he give it up.

That’s the problem with the discussions of NFTs. It’s not about the art. It’s not even all about the money. (That’s not entirely true. The artists are all wondering why they can’t get some of this seemingly free money.) It’s about toppling what many of the crypto advocates consciously or unconsciously see as the last bastion of a remote, opaque and gnostic high culture.

The one thing that the art market and the crypto market have in common is that outsiders cannot fathom why any of this is valuable. Smart, accomplished persons stand in front of a Christopher Wool text painting or even a Basquiat figure and wonder why it’s worth so damned much money. Needless to say, most of us are still scratching our heads at the value of Bitcoin.

The clever turn that’s been made here is using the unproven promise of blockchain technology to pre-empt or skip over the seemingly arbitrary system of high culture that valorizes objects that many accomplished, educated persons just cannot understand. Maybe that’s the reason so many art and crypto conversations sound like the excited speed talking of smart undergraduates. Listening to all of these conversations, it’s hard not to conclude that the creators of Clubhouse would have been more accurate if they’d called the app Dorm Room.