NFT stands for Nickel and Friggin’ dime every Time.
What follows is an “artist’s eye” view of the NFT process, a demystification of this latest attempt to part fools from their money.
Who would actually buy a digital artwork?
Surprisingly few people actually, unless you count commercial art, which isn’t the same thing. That’s design. Designers get paid by the hour, and don’t normally resell a project since it was done “work for hire”. But wait! What about this new thing called NFTs! A dream come true for an artist like myself who has been creating digital collage for over two decades!
News of this revelation has been all over the media as of late (March 2021) and my lovely, well meaning friends have been spamming me, urging me to jump on this bandwagon! I suspect they are secretly terrified that their artist friend (me)will some day end up on their doorstep, broke and hungry, due to poor life choices. Some true believers might even be invested in my success and I love them all for it regardless. But NFTs are problematic because all NFTs are connected to crypto currency, and crypto currency is a bad idea for artists, a really good grift for scammers, but it’s not going to help most artists. In fact, quite the opposite. Don’t believe me? Read on.
There’s GOLD in them there servers! GOLD I say!
What we are seeing is gold rush hype. The is assignment of quantitative value in name only. NFTs are thumbnail images on digital inventory items designed to milk the fees out of suckers and instantly devalue the actual money they must pay to play this shell game. Very few gold miners actually succeeded way back when, and that’s exactly the same case here.
The question here is who is really getting rich? The answer is the same as it was during the California gold rush. The people selling tools to the speculators. In this case instead of selling sturdy jeans, picks, and shovels, it’s the platforms handling the transfer of some artist’s meager wealth over to a slew of slick, largely unregulated websites, and their owners.
This brings me to the point where I show you EXACTLY how to flush your money down the toilet and make a NFT. Not because I want you to do the same, but because I don’t want you to get sucked in and the only way for me to prove it is to show you in practical terms what the game is here. And while I am not an economist and can’t speak to the larger economic or social ills, I can show you exactly how your actual real money gets consumed by pretty websites who are capitalizing on the recent hype and cynically victimizing artists who can hardly afford to gamble financial resources. So here goes:
The actual money
I keep a little bit of money in PayPal to make electronic transfers and get paid for occasional freelance work. I know, I know, PayPal is old news, people use LOTS of different things now, but I still keep this account because it’s convenient and over the years, has never been insecure in any way. Recently PayPal issued debit cards tied to accounts, and while I don’t like or generally use debit cards, I got one in the mail and stashed it away on my cluttered desk (take that Kondo! perky fascist).
I transferred exactly $100 USD from PayPal to start an Ethereum wallet. That’s where the fun began!
From steps in a YouTube video (see link at bottom) I knew that I needed to transfer money (real money) to a website called Metamask which would be my crypto currency “wallet” (which definitely has a hole in it as you will see). To get the money from PayPal to Metamask wallet, I needed to use Wyre to make the transfer, another slick looking website. All told Wyre charged me $13.35 for the transfer of the first $100. The $13.35 was taken from my PayPal account but as soon as it became Ehereum crypto, my $113.35 investment started fluxuating between $92 and $96. Meaning I had lost another $4 to $8 bucks by converting American money into crypto.
The next step was for me to go to another slick website called Rarible and create an NFT token. That’s what they call the artwork you put up for sale with this system. NFT means non-fungible token. Which means in general terms, that your artwork is one of a kind and cannot be subdivided like many other kinds of crypto currency can be.
The process at Rarible is easy. Since I installed the Metamask plugin on Chrome, I was able to “connect my wallet” with one click. Now Rarible knows I have Ethereum (the crypto currency I paid for) and now allows me to make transactions, meaning I get to pay them for the privilege of making my digital image into a NFT which is of course going to make me fabulously wealthy just like Beeple right? So far, I just been nickled and dimed and made the opposite of wealthy. But wait, maybe it’ll happen for me yet! 3 minutes later, Metamask told me the value of my $200 investment was worth even less than before. (read later why I had to add another $100)
The excitement feels a lot like gambling, the anticipation, the SPEND, and then ultimately the parting of a fool from their money. But I am getting ahead of myself.
When starting on the NFT creation process and there are a few steps and decisions to be made on the way. You are able to stipulate the price of your artwork, and Rarible lets you know that if you do sell it, they will take 2.5%. Fair enough. Less than a gallery takes for sure. Then you get to stipulate royalties you get when the artwork is RESOLD. That’s really starting to sound good because my art is *sooooooo good it will be resold over and over for higher and HIGHER prices right? (dream on buddy)
So a few more clicks and you see the “create” button. It’s exciting to push that, like pulling a slot machine, but after doing so you get a Metamask pop up, that tells you how much Gas Tax you will need to pay on your NFT. I’ve heard that NFTs are using a LOT of energy, and that’s what a lot of articles criticize NFTs for. (links to a few of those articles are below). Here’s an image of the range of Gas Taxes displayed to me during the NFT creation process.
I tried all different kinds of variations on the price, royalty, etc. and there was NO rhyme or reason for the fluxuation that I could tell. Wild volatility. In this case the Gas Tax was higher than the amount of crypto in my wallet, so I had to go back to PayPal and Wyre over another $100, which in turn was ALSO gouged for transfer fees, and subsequently devalued when converted to Ethereum.
Refreshing the browser kept refreshing the value, and always in the negative. So I experimented for a while, mixing up different prices for my NFT, and different royalty percentages etc. As I mentioned above, this seemed to have NO effect on the Gas Tax which continued to change radically. Once I saw it went down to $17 (see #2) but when I pushed create it refreshed my browser and went back over $80 to create the NFT and sometimes as high as $128. I kept experimenting and when it came down to a price that I knew I had enough Ethereum to pay for, I went for it and there you go! I now have a NFT that I paid $28 dollars in transfer fees, another $10 for devaluation on conversion from dollars to Ethereum and then $90 bucks in Gas Tax. So ONE NFT cost $128 dollars with no promise or return whatsoever. Here’s a screenshot of what I had left after investing $200 USD:
But wait! It’s not over yet! So Rarible now says I have an NFT, but nobody can see it yet because I need to be verified. Ummm why didn’t you tell me this up front? Oh, never mind I KNOW why. To verify, you need to give them a LOT of information about your social media accounts, etc. It’s intrusive, and I’m still not sure what they are verifying, or what happens if I don’t get verified. Any cursory Google search will reveal that I have been making digital art for well over 20 years. But here I wait, for verification.
Do I get rich now? I sure hope so! But guess what? I just paid $128 bucks for an experiment on ONE artwork, that’s $128 bucks I could have used for MANY other things, and I’m fairly lucky that I have the $128 to invest in doing a stupid experiment to make a point. Most artists I know do not. So no. I’m not holding my breath that my NFTs are going to make me rich, because I think PT Barnum was right. There’s an artist born every minute.
Save your money, buy your Mom flowers, buy a gift card for yourself, spend the money ANY other way because you aren’t Beeple either.
The “how to” make a NFT I used, that you shouldn’t use:
Ecological cost of NFTs
More climate damage
Grifters and the fleecing of artists, AGAIN
Uh oh! Corruption? Say it ain’t so!