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NFTs: A Fleeting Symbol of Status

NFTs are currently a symbol of status, but what happens when that desire fades?

With the news that Justin Bieber has paid an obscene amount of money for a Bored Ape Yacht Club ape, adding to the ever-growing list of celebrity owners, many have begun to wonder what the point is. It’s not as if these celebrities are buying for investment, and it’s doubtful that Eminem or Snoop Dogg will rock up at one of BAYC’s exclusive parties. So, why are the apes proving so popular among the elite? 

NFTs have seemingly positioned themselves as a “must-own” commodity, being used as a ‘PFP’ (Profile Picture) for those who have invested their cryptocurrency. They signify two things – wealth and a commitment to blockchain technology. Ultimately, they’re a status item. 

Of course, currently, this is how many see NFTs. With Twitter introducing wallet support, users of the ‘Twitter Blue’ service are now able to pick an NFT for their avatar picture, even changing the shape of the avatar from a circle to a hexagon. The general dislike for the blockchain darling has already spawned software that will automatically mute users with NFT avatars. To say that NFTs are divisive is an understatement. 

The images are a show of status, similar to a Rolex or a Mercedes. In the 1980s, celebrities were wearing gold rope chains; the ’90s came along and everyone was investing in cars; once the millennium turned it was all diamonds and champagne. Now, in 2022 the epitome of public wealth is a picture of an ape or a punk. To give you an idea of the value of a ‘must own’ ape: Ape #232 sold on February 1st for 1080ETH, which at the time of press converts to $2,850,000.

Twitter making this move, and celebs buying in for crazy prices, proves that many believe the functionality of NFTs doesn’t exist beyond a JPEG or PNG file. Owning a BAYC ape has become a point of pride, like owning a Warhol, except this art can be used as a Twitter avatar. The ape craze is so prolific that there are thousands of them scattered around the internet. Of course, only a select few are actually legit.

A cursory browse of OpenSea, the leading NFT marketplace, shows that not only are their copycat accounts and images, but also a general fascination with using apes as the core of the product. Where some define a movement, others look to copy and sweep up the crumbs. There are those blatantly mimicking the BAYC collection, artists putting their spin on the concept and even pixel art apes. Space apes, gambling apes, chibi apes.

The first NFTs which truly paved the way for how we perceive them now were the Cryptopunk series by Larva Labs designers, John Watkinson and Matt Hall; these were later followed by Bored Ape Yacht Club (BAYC) pseudonymous designers Gargamel, Gordon Goner, Emperor Tomato Ketchup and No Sass. Just these two projects have garnered profits of around $2.09 billion and $1.9 billion respectively.

It’s tough to truly pinpoint exactly where the two projects became so huge, but it’s easy to say that the images became a symbol of underground clubs and exclusive access. And this is appealing to many. Given that celebrities such as Steph Curry and Neymar Jr have recently bought BAYC apes, it shows that these images have power and influence. Ultimately, these celebrities are two of the most recognisable people in their fields, so why would they buy apes if not out of simple desire and a want to show influence?

Up to now, mimetic desire has fuelled much of the NFT craze. Coined by philosopher of social science, René Girard, mimetic desire is the philosophy that humans naturally desire what other people desire.

“Man is the creature who does not know what to desire, and he turns to others in order to make up his mind. We desire what others desire because we imitate their desires.”

Mimetic desire has been around as long as humans have. The initial separation of class and status fuelled the desire as those of lower classes began to crave the status of those wealthier. Many of us believe that our desire to own a particular thing is a conscious decision; we wake up one day and decide “I’m going to buy a PlayStation 5”. In the majority of cases, this compulsion comes from those around us showcasing their own PlayStation 5, or it is displayed as a privilege to own one.

This is seen when physical stock runs low and everyone is seemingly trying to get their hands on the product. This drives desire further, much like any limited edition item which can be collected. The rarer the item, the larger the drive of desire.

Image via Shutterstock-mkfilm

We first began to see this concept in modern society with the iPhone. Initial opinions on the Apple product were somewhat negative, few believed that combining a mobile phone with an MP3 player could take the world by storm. Then the App Store and podcasts happened and suddenly everyone wanted one. Your mate down the pub who’d bought in early showed you that game where you flicked paper balls into an office bin, and suddenly you got the itch.

The craze for iPhones came from simple human desire; sure, they were well-designed phones and they looked slightly futuristic for the time, but the phone became a status symbol. An expensive status symbol and one so well recognised. This popularity still continues today, with teenagers and kids desperate for the latest phone in order to fit in with their peers.

Mimetic desire is key to the adoption of Web3. When the first iteration of the internet rolled out, many were indifferent. It was a tool for finding information before it became a way to shop. When Web2 launched, with its social networks and video content, the desire in us ramped up. We didn’t want to be the only one in our friendship group without a Facebook account. And these social apps were perfect for our shiny new iPhones.

But desire can only last so long. There’s always a point where we obtain what we desire and grow out of it. Usually, with any material object, this wouldn’t be much of a problem; you decide to switch from iPhone to a Samsung Galaxy and you can sell on your old phone or trade it for some store credit. There will always be someone who desires what you had, after all. But will that work for NFTs?

Image via Shutterstock-mokjc

Obviously, there is currently a buyers market for NFTs. Many NFTs change hands several times before they find a stable home, but once the market goes quiet or the apes go out of fashion, then what? The floor price drops, the crypto markets tumble and what are you left with?

Art will always have a place in the NFT space, especially as established artists enter the field and emulate what Beeple achieved with his $69 million auction with Christie’s. Even Damien Hirst has entered the fray. However this field will shrink and morph into something completely different as desire, or in this instance, hype, dies down.

This is where NFTs need to begin showing utility to owners. An NFT can’t just be an NFT, it must attach something to it. That might be membership to a club, or rewards for keeping the NFT in your crypto wallet, it might be a small keepsake from that convention you attended. Because really, NFTs can be a lot more than art or imagery.

Utility NFTs can aid in everything from city governance to insurance and weather forecasting. The future of NFTs will look very different from today. They may still be images, but those images will feature smart contracts for physical items or businesses, giving the owner more for their investment.

This is where the argument about digital ownership needs to become more vocal. It’s fine owning a piece of art, but physical art keeps its value because of appreciation and prestige. What will NFT holders do if their art devalues rapidly or loses its hosting? Without prestige, collectibility or utility, it really is just a JPEG.

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