Note — Apr 18, 2021

Money for Nothing

I was already down on Bitcoin back in 2012 when we spoke with a fan for The Alpine Review, yet it’s still going strong so maybe I’m wrong, and perhaps there’s some aspect the author is missing, or some upcoming technological twist, like Ethereum switching to proof of stake. But I still loved and even laughed out loud at this piece by Vicky Osterweil which, caveats above not withstanding, is I believe an excellent take on the state not only of NFTs and crypto more broadly, but even on Silicon Valley thinking in general and the way they basically use mystification and obfuscation to transform existing labour and value “into electricity” transferred to fewer people. It’s still jobs below the API, handing labour to gigs and to users, money to the app companies, and creating a thin layer of interface between the two to hide what’s happening, all in the guise of making things easier and frictionless. (Let me preempt the replies of some readers; yes there is lots of good going on in tech but the dominant players right now are definitely not forces for good, and certainly not acting responsibly.)

Osterweil also talks about NFTs as a “a process of mass, self-inflicted intellectual gaslighting,” that “the more people who can be brought to agree that some arbitrary object is valuable, the more valuable it becomes,” and that the only thing that keeps the value of commodities is the backstop of the state. Without it, as in the blockchain, the value is built on how much people trust the value of the technology, there is no backstop to all that “value” vanishing.

In nearly every article about them they are framed as an incredibly complicated technological phenomenon requiring careful explanation, rather than an incredibly boring one that tends to repel one’s focus. […]

It’s more fun to believe in magic than to recognize how much of financialized capitalism is just scams and pyramid schemes. […]

This is what libertarian evangelists see in crypto: a currency unmoored from a state, from an apparatus of violence, taxation, and territorial control. Instead of violence, the backstop will be technological cryptography, complex coding, and electrical power. But there is nothing innately value-producing about computer code any more than there is in tulip genes, and NFTs are just like tulips in that they are a volatile store of value subject to the irrational whims of investors. […]

Through the wonder of coding and engineering — but actually through brute ecological destruction, low-paid labor, and electrical expenditure — value emerges from “nothing,” creating a financial asset bubble that just seems to never pop.