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Lilah Raptopoulos and Jemima Kelly
This is an audio transcript of the FT Weekend podcast episode: How NFTs shook up the art world
[Ambient sounds at a concert]
Eminem
Oh my god, bro. How did you get that in here?
Snoop Dogg
I got the connection. I feel like . . .
Eminem
Man, don’t trip!
Snoop Dogg
I feel like, you get me high again bro.
Lilah Raptopoulos
About a month ago, Eminem and Snoop Dogg performed at the VMAs. The VMAs are the MTV Video Music Awards, and this is what it looked like. Snoop is on a stage, he’s smoking a massive joint, Eminem is next to him. And, then, suddenly, the two of them are presumably too high for this earth, and they just shift into an alternate dimension.
Eminem
Is that? Yo, what the?
Snoop
Man, shit’s the size of my hand. Shit’s gonna make me relapse
[MUSIC PLAYING]
Lilah Raptopoulos
They become cartoons, and then, they perform most of the set that way. The avatars they’ve turned into are monkeys, or to be more specific they’re something called Bored Apes. If you don’t know what Bored Apes are, they’re these illustrations of apes that are inspired by the band Gorillaz. And Bored Apes are also NFTs: non-fungible tokens. A little while ago, a Bored Ape NFT might have cost you more than a million dollars.
Jemima Kelly
A lot of the NFT culture is just the crypto culture. It’s the people who are buying, the people who are pumping NFTs are the same people who’ve been pumping various like, you know, shit coins as they’re called. (Chuckles)
Lilah Raptopoulos
That’s Jemima Kelly. She’s an FT columnist, and she’s hosting a new season of our sister podcast Tech Tonic called A sceptic’s guide to crypto. If you’re confused about how cartoons of Snoop Dogg and Eminem are also a digital token that people have become obsessed with, welcome to the club! It’s confusing. And today, Jemima is going to help us untangle the knot. It’s probably worth mentioning she’s not a fan.
Jemima Kelly
NFTs are like already basically over. I mean, and I don’t like calling the top of crypto, but, and I won’t. And I’m not going to say crypto is over. But NFTs, I’m not saying that they might not have a little, little, you know, a little flourish again. But like there’s no way they’re coming back like they did because people are just got wise to it. Like now that they’ve. Yeah, it’s just. It’s just not . . . not happening. Even, even Snoop Dogg and Eminem performed at the VMAs as NFTs and no one cared
Lilah Raptopoulos
This is FT Weekend. I’m Lilah Raptopoulos.
[MUSIC PLAYING]
Lilah Raptopoulos
Before we start, let me just say that we’ve been wanting to talk about NFTs on this podcast for months. Because they’re all over the art world. In March 2021, Christie’s sold an NFT of a collage by an artist named Beeple for $69mn. By the end of the year, the entire entrance to America’s biggest art fair, Art Basel, was basically an ode to NFTs.
Outside the art world, smaller investors were buying NFTs at lower prices, like a few thousand dollars. If you haven’t heard of Beeple, maybe you’ve heard of CryptoPunks. They’re these algorithmically generated little portraits that look like pixellated punks, and those have sold for millions of dollars, but they’ve also spawned dozens of cheaper knockoffs for people who wanna spend less.
But, overall, something just seemed off about the NFT market. When you look at a CryptoPunk character, it does not look like it’s worth a million dollars. It looks like it might have been made by a teenager on some software from the ’90s. So what I needed help with is to understand how exactly they became so valuable. Which brought me to Jemima. She’s been covering the crypto market since its infancy, for seven years.
Lilah Raptopoulos
Jemima, hi. Thank you so much for joining.
Jemima Kelly
Hello, Lilah. Thanks for having me.
Lilah Raptopoulos
Welcome to the show.
Jemima Kelly
Thank you.
Lilah Raptopoulos
So we’re a culture podcast, and we’ve been trying to figure out how to cover NFTs for a long time now.
Jemima Kelly
Just don’t . (Laughter) No, I get it. You have to grapple with it.
Lilah Raptopoulos
You have to, yeah. And we realize that the big question that we have about it is like, are they actually changing how we think about art? But first, maybe I’m going to ask you a hard thing to do, but in like the sort of most tightest version you can, how would you define an NFT for people who don’t know?
Jemima Kelly
Okay. Well, I’m going to start by explaining what it stands for, because I actually think that most people don’t really know what it . . . they know what it stands for, but they have no idea what those words mean. So it stands for non-fungible token. The reason we have this word that most people don’t even know the meaning of fungible. It’s . . . fungible means that you can trade something like for like. So a pound is fungible because you can, £1 is the same as another pound and cryptocurrencies like bitcoin are supposed to be fungible like that. NFTs are supposed to be different, so the reason they’re called NFT is to differentiate them from other cryptocurrencies because like cryptocurrencies, they run on blockchains. But in order to differentiate them, these ones are supposedly unique. So they’re not swappable one for one.
Lilah Raptopoulos
So it’s not just (inaudible) money.
Jemima Kelly
It’s not money. It’s supposedly, supposed to be more like. Yeah, like a unique thing.
Lilah Raptopoulos
Right, okay. So when Jemima is talking about the blockchain, she’s talking about the technology that is used to verify digital tokens. The whole idea about bitcoin is that, theoretically, it can’t be faked because it has its verification built right into it. If you have a five-dollar bill and you’re wondering if it’s real, you need a bank to tell you. If you have $5 worth of bitcoin, the token’s code tells you whether it’s the bitcoin that it claims to be.
The reason Jemima’s telling me about this is that this is the same technology that’s used in NFTs. Only you don’t use the blockchain verification to prove that your money is real. You use it to prove that your art is real.
Jemima Kelly
It’s basically a digital receipt, and it’s meant to represent ownership of something, but it doesn’t necessarily mean that. . . So you might think that you own something, but that’s quite a kind of . . . Again, sorry. So it’s all very abstract.
Lilah Raptopoulos
Yeah, yeah, yeah
Jemima Kelly
It’s really, it’s really hard to . . . like you can’t talk about it in a concrete way because it’s not concrete.
Lilah Raptopoulos
Right. But say it’s a piece of art. So somebody buys a piece . . . .
Jemima Kelly
It’s not a piece. So. Okay, so okay. So it’s not the art itself. It’s the receipt for the art.
Lilah Raptopoulos
Okay. Stay with me. You want proof that a piece of art is yours? That’s what the NFT is meant to do. And that’s why Jemima says it’s a receipt. And it’s meant to do that, especially because digital art can be so easily replicated and it’s hard to tell where it originated. You have one board, eight, you have a million all across the Internet.
Jemima Kelly
So basically digital art, the problem with digital art is that it can be replicated, it can be copied and pasted. And this has been a problem in the digital art world. People like, “How are we going to stop people from doing this?” And then suddenly there was this like, “Oh, maybe we can do it with NFT” is like, there’s a way of making this. Even if the art itself can be copied, the ownership can’t be.
Lilah Raptopoulos
Right. So, it’s sort of like because it’s not physical, you don’t own Starry Night, for example, like because you don’t own the physical version of Starry Night. If there’s a digital version of art, then that can be replicated. And anyone can pretend they own it, I guess if they have an image of it. But if you have the receipt of it, it’s it’s yours.
Jemima Kelly
Right. Right.
[MUSIC PLAYING]
Lilah Raptopoulos
But the interesting thing about NFT art is that it’s kind of just gone off the deep end because people have stopped using it as a receipt for owning just digital images. They’re using NFTs as receipts for all sorts of things. It can really be anything you decide you want to be an NFT.
Jemima Kelly
You can literally NFT yourself. (Laughter) You can, you can NFT a table, you can NFT anything. It doesn’t . . . it just means that you create a string of code that you say represents something. And it can be something digital. It can be something physical.
Lilah Raptopoulos
So if I make an NFT out of myself and then I sell myself or like reverted the receipt to myself. In the market. And then somebody buys this digital receipt of me. Who’s anybody to say that it isn’t me, right? It’s not me.
Jemima Kelly
Yeah, exactly right. So there’s like that people think that there are this kind of legal rights that you’re getting, but it’s completely unregulated. So, like, the ownership is very unclear. Like the kind of legal ownership even of these artworks is, it’s like, it’s very unclear that regulation and laws have not caught up with all of this stuff.
Lilah Raptopoulos
It’s such a Wild West.
Jemima Kelly
It’s a complete Wild West.
Lilah Raptopoulos
I met someone who is burning her art and then selling the burning of the art.
Jemima Kelly
As an NFT. I mean, you can. Anything is an NFT. But that’s the kind of beauty of it in a way in the art world. Because it is the kind of perfect partner for, for the art world. Because in some ways it is kind of art. So like in order to make that receipt feel like it’s a piece of art, is it kind of a bit of a leap that you have to make, you know, like what is art? And so it’s like, who, who’s to say that that’s not art, right?
Lilah Raptopoulos
Yeah. Okay. So that’s what NFTs are or what they claim to be. But how did we get here? Here’s a very condensed timeline for you. At the start of 2021, very few people knew what NFTs were, but by March they hit the mainstream. And then by the end of 2021, nearly $41bn had been spent on NFTs. That made the digital art market almost as valuable as the global art market and all of that in just a year in change. The explosion is kind of like crypto and they’re related. But the difference is NFTs appealed to a different sort of person, too. They appeal to people who are actually interested in art.
Jemima Kelly
Because that kind of experimenting with and I get it like, if you’re if you’re an artist and you’re kind of cutting edge, of course you’re going to be experimenting with like the new stuff like, and you should that’s part of your I think art has always been about that, about like experiment, you know, pushing boundaries and experimenting with new technology. And, and so you should.
Lilah Raptopoulos
Then in June of this year, the NFT market crashed. It dropped in value by 88 per cent. That’s mostly because the cryptocurrency market crashed and people were often paying for NFTs in crypto. And also because inflation was going up and people didn’t want to gamble as much with the money they had. What was propping them up when it was big, when and when they’re at sort of their peak in 2021?
Jemima Kelly
I honestly think that it was just the, making money, just like making people were just hoping they could just flip it to someone else. I don’t think it was . . . I mean, clearly, some people in the art world wanted to get involved from a kind of the point of view of like buying a piece of art. Right? But I think actually what was driving, you can see because it just traces the same, the price of crypto. So like if it wasn’t kind of related to that, then it wouldn’t just trace it. But it does. It just kind of it was just like people who were buying crypto were also buying NFTs and like they were hoping to flip it. It’s like the greater fool theory. You’re hoping that you’re going to be able to sell it to a bigger fool and . . . (Laughter)
Lilah Raptopoulos
To state the obvious. A lot of people lost a lot of money as the NFT market shrank. It wasn’t great. And yet there is still something pretty compelling about NFTs for the art world for a couple of reasons. One, because it lets you make whatever you want and call it art. And two, because you can sell whatever you want as art and make a lot of money. It feels very easy for this conversation to become very abstract, very quickly. And I’m thinking like, you know, you suddenly are asking yourself these questions like what is art and what is value and what is money? And is the economy real? Is currency real? And whatever. Umm, what is real, am I real? And it makes me wonder about how we define the value of art at all in the art market. Like, you know, I mean, I’m going on a major limb here, but we decided culturally that Picasso was a genius, for example. We wrote that with an author on the show before. Is he you know, there were like so many women painters at that time that like, probably were also a genius, but their work has no value because we didn’t know them. We’ve inherited assumptions about what’s actually good, so I don’t know, is there a chance that this is going to change how we think about the value of art? Like, is it just us asking these big questions that valuable?
Jemima Kelly
Yeah, I think that is actually really valuable. And I think that the whole of crypto like, has been valuable. It’s like a really interesting experiment that’s been had. Like it’s opened this conversation about like what is art, what is value? And I mean, we’ve had those kinds of I mean, like modern art has done that a lot, hasn’t it? Like what is art and, you know, unmade beds or whatever. This NFT discussion has been like, yeah, what is . . . Well, it’s also about like what does owning art mean because like a why do people want to own art, like why do people pay for art? So if the number one reason is to be able to brag about it, then holding a receipt, a digital receipt for a JPEG is just as valuable as, as owning a Picasso. But unfortunately, the other thing that owning a Picasso does, is that it like probably holds its value. So like, maybe buying an NFT is just as valuable as buying a Picasso. But if you’re someone who truly cares about art and the history and, and you feel that maybe the actual physical art has like a special, magical kind of aura, like, I think people feel that when they go to museums, exciting to be with this kind of artifacts and to kind of imagine, you know, the paint strokes on the canvas and you’re not getting any of that with an NFT. You’re just getting the bragging rights. And also the kind of internal sense that you own something and that does have some value.
Lilah Raptopoulos
And it . . . yeah . . .
Jemima Kelly
That does have some value.
Lilah Raptopoulos
And then there’s the other question of like, okay, if there’s a market for something like there’s this CryptoPunk art, right? And people are buying it for millions of dollars.
Jemima Kelly
Oh, yeah. Tens of millions of dollars.
Lilah Raptopoulos
Sorry, tens of millions of dollars. Many of them didn’t take a long time, didn’t take a lot of actual craftsmanship or anything like that. So in that way, I guess it’s, it’s not of value in that way, artistically, but it’s built cultural value. And if there’s a market for it, it’s developed cultural value. Like there must be a way in, you know, now we know CryptoPunks, now we know the people collage. That must give it some sort of value, you know?
Jemima Kelly
Interesting. I don’t know. I mean . . .
Lilah Raptopoulos
It’s like part of . . .
Jemima Kelly
I’m not sure. I think. Yeah, it is part of this time. And so again, like, what do we mean by value? But like, it’s definitely. Yeah. Like it says a lot, and I’m not sure it says anything like, very great. But it does say some stuff about our culture, unlike this current time in history. But the other thing that we should point out is like prices have collapsed. Like we’re saying, people are paying millions. I mean, currently they’re not really . . .
Lilah Raptopoulos
Jemimah says that from a financial perspective, the problem with NFTs is that there’s no scarcity. The art market works because there’s only so many Picassos in the world, but we can just keep making more NFTs. If you had to make an argument for them or see a world where they would hold a role.
Jemima Kelly
Mm-hmm. NFTs. Mm-hmm.
Lilah Raptopoulos
Yeah. What would you say? Like what role could they hold?
Jemima Kelly
Oh, Jesus, that’s hard. It’s almost impossible. It’s, like, so hard to understand, to see . . .
Lilah Raptopoulos
Could you create scarcity for it? And then that could help, like?
Jemima Kelly
I think no. Like, is there a world in which NFT is could possibly do something? I mean, they would have to just not be NFTs. Like, could someone create a way of making a digital thing truly scarce? Maybe. Yeah. Like, I’m not a technologist. I don’t believe. But then it wouldn’t be an NFT.
[MUSIC PLAYING]
Lilah Raptopoulos
It’s worth saying that Jemima’s just one person. She’s a very, very well-informed person, but she’s also someone who hasn’t bought into the crypto dream. But that doesn’t mean it’s definitely over, because to give something value, all you really need is a lot of people to decide it has value. And right now, there are still a lot of people, including major investors, who’ve lost tons of money on NFTs, who are still willing to invest more. So we’re going to continue to watch this space. And in the meantime, I recommend Jemima’s Tech Tonic series. It goes way beyond NFTs and into the minds of crypto lovers. I put the link in the show notes.
[MUSIC PLAYING]
Lilah Raptopoulos
That’s the show this week. Thank you for listening to FT Weekend, the podcast from the Financial Times. Next week we bring you to the FT Weekend Festival to a conversation I had live on stage with the iconic fiction and nonfiction writer Jamaica Kincaid and FT columnist Enuma Okoro. We also chat live and in person with a bunch of listeners and colleagues and we’ll bring you all of their cultural recommendations. If you like what we do. Please do leave us a five-star review on the Weekend feed on Apple Podcasts or Spotify and leave us a few words. That is still the best way to help people find the show. We love hearing from you. So please say hi anytime. You can email us at ftweekendpodcast@ft.com. I read all those emails. The show is on Twitter @ftweekendpod and I am on Instagram and Twitter @lilahrap. I post a lot of things that feed into the show on my Instagram. Links to everything mentioned today are in the show notes alongside a link to the absolute best offers available on a subscription to the FT. Those offers are at ft.com/weekendpodcast. Make sure to use that link. I am Lilah Raptopoulos and here’s my incredible team. Katya Kumkova is our senior producer. Lulu Smith is our producer. Molly Nugent is our contributing producer. Our sound engineers are Breen Turner and Sam Giovinco with original music by Metaphor Music. Topher Forhecz is our executive producer and special thanks go as always to Cheryl Brumley. Have a wonderful weekend and we’ll find each other again next week.
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