NFTs 101

Non-fungible tokens, or NFTs, are unique, tradable, digital assets. They are often traded on the Ethereum blockchain, a type of crypto currency which is run by a network of computers. The first NFT was created in 2014, but crypto art only garnered attention in early 2021. This may be due to the $69 million headliner from a Christie's NFT auction in March 2021.

CryptoPunks Movement

CryptoPunks is a set of 10,000 NFTs created by Larva Labs. It is often regarded as the father of portrait style crypto-art as well as one of the earliest examples of an NFT project. They are based off London's punk scene and can be sold for tens of millions of dollars. During CryptoPunk's infancy, they were given out to fans for free. Now, they are extremely popular in part due to their highly personalized portrait look.

Hyper Individualism in Cyberspace

CryptoPunks have been used as a form of cyber self-expression in social media profile pictures. Because of their distinct style, randomized character traits, and rarity, other crypto art projects have decided to copy this formula of success to market their art to Web3 features such as the Metaverse. Based off the data I collected in March 2022 from OpenSea.io, profile picture style NFTs were the most popular style 8 out of 10 times. An article by Vogue Business explains that profile pictures, or PFPs, are commonly a collection of themes or characters. These PFPs are pre-set designs and can be used as a ticket to exclusive clubs and events. The rarity of said iteration adds to the complexity of the design and its uniqueness, therefore increasing its value. None of the hex codes used in the color palettes of each NFT project are alike, also increasing their individuality.

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Price Fluctuations

The value of profile picture style NFTs usually increase in value over time, or stagnate at a very high price point. Take the bottom graph for example, Azuki #5397 sold for 35 ETH or about $87,000 (based off Ethereum's USD conversion on March 2022). Most crypto art sales have dramatically increased in value. CryptoPunks holds such high value that I had to omit its sale history as outliers.

Singular sales may indicate that the buyer was satisfied in their purchase. It can also mean that they have not receive a high enough bidding offer. Either way, profile picture NFTs are highly valued.

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Social Currency

Being unique, attractive, or interesting in a surplus of images and data becomes more and more difficult with more people contributing to the online space. To stand out, some people begin to brag. Bragging about the high life is not a new concept in cyberspace. "Flexing" is especially prevalent in image and video based platforms such as YouTube or Instagram. This idea that you can buy friends, attention, or good taste by flaunting wealth. Those who are familiar with the extreme wealth associated with the top NFT projects may pay attention to who owns which art piece. This transaction of NFTs for online attention is what Gary Vee, creator of the NFT project VeeFriends, compares to the driving of luxury cars. NFTs are a means to increase social currency.

The Attention Economy

With a surplus of ways to express ourselves online, there creates a defecit of true individuality. We are going into Web 3 with the notion that we need to have the rarest, most expensive NFT as our avatar in order for anyone to pay mind to us. The attention economy puts human attention on a pedestal. Our attention has always been valuable and scarce, but the difference is that algorithms can strategically grasp for our attention based off our likes and browsing history. Maybe this push into hyper-individuality and attention will cause a pull back into a reclusive way of life. Or maybe we will continue to find new ways of online self expression through art.