Tech Won't Save Us - Bursting the NFT Bubble w/ Jacob Silverman

Episode Date: April 8, 2021

Paris Marx is joined by Jacob Silverman to discuss the implications of the recent NFT boom, the libertarian ideology that underpins crypto, and where the hype economy goes from here.Jacob Silverman is a staff writer at The New Republic and the author of “Terms of Service: Social Media and the Price of Constant Connection.” Follow Jacob on Twitter as @SilvermanJacob.🎉 In April 2021, Tech Won’t Save Us celebrates its first birthday. If we get 30 new supporters at $5+ per month, we’ll start a weekly newsletter in addition to the weekly podcast to provide a new way for people to access critical perspectives on technology. If you like the show, become a supporter and help us reach our goal!Tech Won’t Save Us offers a critical perspective on tech, its worldview, and wider society with the goal of inspiring people to demand better tech and a better world. Follow the podcast (@techwontsaveus) and host Paris Marx (@parismarx) on Twitter, and support the show on Patreon.Find out more about Harbinger Media Network at harbingermedianetwork.com.Also mentioned in this episode:Jacob wrote about all the things rich people are spending their money on during the pandemic, including NFTs and cryptocurrencies.Everest Pipkin explained all of the environmental problems with NFTs, and how they’re built into the core of the technology.Some people are buying NFTs, then finding they disappear or can’t be accessed.Bitcoin uses more energy than Argentina, but could consume more than Australia by 2024.Bill Gates said Bitcoin is a “pure ‘greater fool theory’ type of investment.”Anil Dash explained that NFTs were supposed to help artists, not just be another speculative asset.Taylor Lorenz wrote about how creators are monetizing their lives.The New York Times and Forbes (among others) sold NFTs while reporting on them.Tom Brady is the latest celebrity to get into NFTs.The NFT boom may already be going bust.Support the show

AMTs are this great kind of neoliberal technology because you can tokenize all kinds of things from a tweet to a real piece of art to just any website or something like that. Pretty much anything can be submitted to this process. Hello and welcome to Tech Won't Save Us. I'm your host, Paris Marks, and I'm very happy to say that after setting a goal of getting 30 new supporters at $5 a month last week to celebrate the first anniversary of the podcast this month to start a weekly critical tech newsletter, as of the time of recording, we are only one person away from hitting that 30 supporter goal. That's incredible. I'm so happy to see the response and the number of

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that it has helped you see technology and the tech industry in a different way, I would really appreciate it if you would consider going to patreon.com slash techwontsaveus and becoming a supporter so I can not only continue doing this work, but keep growing the scope of what I'm doing with Tech Won't Save Us.

In addition to supporting the show at any level, you get access to our Discord server where you can talk with other people who listen to the show. And at $5 or more per month, you'll also get stickers that you can put on your laptop or anywhere else to show off that you're a listener of the show if you want to do that.

So again, thank you so much to the new supporters who joined in the past week and to those who have been supporting the podcast even longer than that. And again, if you like the show, please consider joining them by going to patreon.com slash tech won't save us. And now for this week's episode, my guest is Jacob Silverman. Jacob is a staff writer at the New Republic and the author of Terms of Service, Social Media and the Price of Constant Connection.

In this episode, we talk about the NFT boom that has happened in the past few months and the many implications that come with it. As you will quickly realize when listening to the show, both Jacob and I are very critical of NFTs and of cryptocurrencies more generally, to the degree of questioning whether they should exist at all. There is a libertarian narrative that has been built up around these technologies, these ideas, over the past decade. But over that time, while the financial speculation through cryptocurrencies has grown, and while the environmental footprint now rivals those of mid-sized countries,

it's not at all clear what the social benefits of these technologies are, but the costs are massive and growing. So we talk about the growth of NFTs, the problems with them, how they have been sold to us through empowering artists like so many technologies before them, even when it's not clear they do that, and seem reflective of this larger hype economy that has been growing for a number of years, where there's increasing speculation on certain assets, their prices growing for a number of years where there's increasing speculation on certain assets, their prices boom for a while, and then they go bust again and we move on to the next hype cycle. And already the NFT boom seems to be going bust, as I think almost anyone could have expected. So I hope you'll enjoy this conversation that I had with Jacob Silverman.

I certainly enjoyed it. And as always, if you like the show, please leave a five- star review on Apple Podcasts. Please make sure to share it on social media and with any friends or colleagues who you think would enjoy it. And as I said before, if you like the show, please consider heading over to patreon.com slash tech won't save us and becoming a supporter. Thanks so much and enjoy the conversation. Jacob, welcome to Tech Won't Save Us. Thanks for having me. It's great to speak with you. I read a lot of your articles at The New Republic, and I know that you are, you know, I think of the same mind on a lot of these issues when it comes to technology and these new

things that come out. So I'm looking forward to chatting with you today about NFTs, you know, this new kind of digital product or asset that has kind of exploded in the past few months and that we apparently can't stop hearing about. And so, you know, before we dig into what has been happening the past few months, I was hoping that you could explain a bit about what an NFT actually is. Like, how does this thing actually work? And why do people think that it is valuable or, you know, interesting in any kind of way? Sure. I think, first of all, it's easy just to think of NFTs as collectibles. And I think that says a lot about sort of where they are in the

marketplace and how people view them, or at least certainly people who buy them. We can talk later about how there is sort of a booming market for collectibles in general, not just digital ones. But an NFT basically stands for a non-fungible token. It's essentially a certificate of ownership or a receipt that kind of says that you own something that's stored on a blockchain. A lot of them are done through the Ethereum blockchain. So essentially what might happen is a company might create an NFT in the form of a video or a piece of digital art or something like that, and they sell it. They're not really selling the piece of art itself so much as the rights or at least the claim of ownership that appears on a blockchain. So that's where you start already getting into some of the confusing aspects of NFTs, which is that the people who own them technically don't necessarily own the media

that you interact with. They kind of own a description of that media. So it's very easy, for example, for someone to watch the highlights that go into the NBA's Top Shot, which is their pretty successful NFT platform. You can watch these highlights, but then those same highlights are sold as NFTs for $100,000. So it does already, you see this strange disjunction between what is owned and how it's sort of consumed and spread around as digital media. Yeah, I think what you're describing there is fascinating, right? Because, you know, you would assume that if you are paying this money, you're at least kind of owning this digital image or video file or something like that. But, you know,, you're at least kind of owning this digital image or video file or

something like that. But what you're actually owning, as I understand it, as you're explaining it there, is this kind of link to it or technically this right to this file. But as I understand it, and as a number of stories have reported in the past few weeks, that there are a number of people who are buying these NFTs of these images or videos, and then they go to follow the link to this file that they are supposed to own, and it's not there or it has been lost for some reason. And then the question is like, do they do they really still own this thing if it doesn't still exist if this link isn't still active? Yeah, the interesting thing is that NFTs are supposed to clarify ideas of ownership, I think, which is that you're supposed to have this permanent, say, I buy an NFT. There's a permanent record. It won't change. That's the non-fungible part on the blockchain saying Jacob owns this image made by so-and-so. It'll probably include some metadata and other information, but not the image itself. But instead of really clarifying that kind of thing, it really muddles these ideas of ownership of digital goods and whether even digital goods count as goods. So I think that's why NFTs are interesting in a way before we kind of get into the criticisms, because they do raise all these provocative questions about digital assets and how we think of them and how we sort of conceptualize this stuff and ideas of ownership. But they don't really answer those questions or clarify them in the ways that they

claim to and in the ways that NFT supporters say that they do. Yeah, I think that's a really good point. NFTs are not effectively new. Based on what I've what I've researched, it seems like they've been around for a few years now. But in the past few months, they have received a lot of attention. And, you know, you wrote this piece for the New Republic about how people who have earned a lot of money through the pandemic, and even I guess a bit before the pandemic, are now looking for places to put that money. And NFTs and cryptocurrencies more generally have been one of the areas that they have chosen to put their money into. And so, you know, why are wealthy people flooding money into NFTs if this is such a new thing?

And I guess the value is not firmly established yet. Well, in some ways, it's because the value is not firmly established. There's just a huge expectation here that some of the stuff could soar in value or become very valuable relatively overnight. And so I think that's the excitement for folks. There is this clear speculative mania going on, call it a bubble if you want, but the speculation is certainly part of it. Even people who are NFT boosters would probably say, yeah, this is a speculative asset whose value is potentially volatile or highly variable, but could increase a lot as long as other people believe it's worth that much. I think the other feature of sort of the NFT mania and what you're getting at is that in the time of

pandemic, we have seen more speculative bubbles around cryptocurrency and various places where people who might have a lot of money or might have a lot of sort of funny money in the form of cryptocurrency are looking for something to do with it, a place to park it, or a way to convert it into fiat money. So a lot of the NFTs that have sold for a lot of money have actually sold to people in the crypto industry. The guy who bought an NFT of Jack Dorsey's first tweet for almost $3 million, money that I heard went to charity. But that guy is a, I believe he's an executive at a crypto exchange. A lot of this does sort of seem like funny money or paper assets or money that exists on some ledger somewhere, but isn't necessarily real.

And you have the same thing with even the Beeple. Is that the name of the artist who sold his for $69 million? That one was bought in Ethereum. I forget the exact profile of the buyer, but I believe he was also sort of a crypto industry person. So suddenly you have this big asset bubble of crypto and Bitcoin kind of swelling. The number keeps going up. And these people now, they have kind of what they want and they can't really go travel. So they're looking for places to use their money or convert it into something, I would say more tangible, but maybe not. Yeah, I think that makes a lot of sense. It is kind of fascinating to hear you

explain that and to see how this plays out, because, you know, you're saying that it's these people who are involved in this kind of cryptocurrency industry, I guess, you know, trying to legitimize cryptocurrencies who are paying these really large sums that then get reported in the media. And, you know, there's a lot of hype that gets built up around them. But I think it was in your piece, you also argued that NFTs, in a sense, and maybe crypto more generally is kind of like a multi-level marketing scheme where, you know, you always need the person coming in behind you to keep spending because that is how you kind of recover the value of the asset that you've bought. Yeah. Some crypto folks, especially Bitcoin people, get mad at me when I say that Bitcoin

is an MLM. And I know that's sort of a provocative thing to tweet out. Not that I'm the first person to say it. Some people say, well, Bitcoin has no marketing department. That's something I hear a lot. Bitcoin doesn't, but crypto exchanges do and other currencies and altcoins and all the various companies and VCs and everyone who's involved in the wider sort of crypto and Bitcoin world, they do have interests in bringing in more people behind them and having more people invest. So that's why I think the crypto market in general is so suffused with influencers and famous people from Paris Hilton on to anyone else being paid to basically shill crypto. Now, we don't necessarily know in Paris Hilton's case who's paying her or what, but there was something uncovered actually about Lindsay Lohan being paid by a crypto firm. And you can see some of her tweets where she tweets about

the Binance guy. And it's clear that no disrespect to her, but this is not coming from her own inherent interest in the subject. So there's this idea then that in order to keep boosting the value of these assets, which don't necessarily have much inherent value, you have to just generate that kind of interest and keep people coming in after you. That's the MLM part. Another way of looking at this is I'm not necessarily the biggest fan of Bill Gates, but I thought he had a good comment about Bitcoin where he calls it a greater fool game, I believe is the term. And there's a term from economics, which is basically that to make money off of an asset or something that you own, you simply need to find a bigger fool than you who will pay more money for it later. And I do think that is kind of the

underlying logic that really defines a lot of crypto and NFTs. And I know some people will say, well, certain currencies are different in their design or Bitcoin is different because of XYZ or the way it uses scarcity and stuff like that. But to me, it comes down to this notion that the people who buy these assets, these digital assets, even if they're planning on holding them for a long time, which a lot of them claim they are, they really are dependent on either people buying that asset later for more money, just being convinced to, or other people buying similar assets for more money that just sort of creates a rising tide. To just sort of put a pin in it, I think what you have is this notion that there's really nothing inherent that's going to make these things more valuable over time. Now, that's the case with some tangible goods too, but it's even more stark, I think, with crypto and with NFTs. Yeah, I would completely agree with that. And I think what you're getting at there, you know, the crypto and kind of where this value comes from, I wanted to get into, you know, how this

really works. Because as you mentioned before, most of these NFTs are associated with Ethereum, which is one of the primary cryptocurrencies, Bitcoin being the main one. And so, you know, how these coins are produced, I think is important to this conversation, because it's how, I guess, the entire kind of bidding system and ability to purchase them actually works, which is through these kind of notions of proof of work and proof of stake. So can you explain how these cryptocurrencies are produced and what is actually required for that process? Sure. So the problem that a lot of folks like myself have with some of the big cryptocurrencies, especially Bitcoin and Ethereum, I believe operates according to similar principles,

is that they essentially engage in what's called proof of work, which means that they verify transactions by having people who are running the Bitcoin software perform complex, the software performs complex mathematical calculations, which in turn are used to verify transactions and also conduct the mining that distributes new coins. In short, basically what this means is that a lot of mathematical calculations and a lot of energy go into producing Bitcoin and into verifying the transactions. And it's all because of this proof of work model, which is considered sort of the, well, actually it depends. Some people think that's what gives Bitcoin its value or what gives Ethereum its value is that there is all this energy and actual money

going into creating this thing. And some people like me think that that's actually just a huge amount of waste. That's waste energy. And that doesn't necessarily make Bitcoin valuable or give it some inherent value. It actually just makes it worthless and wasteful or more wasteful. So Ethereum is a proof-of-work blockchain. There are other models like proof-of-stake and there are other ones being developed that are considered less energy and computationally intensive. Frankly, I'm not an expert on all the various blockchain models out there, but when you get to sort of the broad environmental critique, it's because of this proof of work concept and how it sort of throws up this barrier to entry, which requires all this,

again, all this energy to go into it. Lately, I think the statistic going around is that the Bitcoin network uses the same amount of energy as the entire country of Argentina per year. You keep seeing these mid-sized countries versus the Netherlands, then it's Argentina or Austria or something like that. But basically, the point is that these currencies are get to, where they discuss that for Ethereum, I believe the kind of environmental footprint is estimated to be the size of the country of Ecuador. So you're saying Argentina for Bitcoin, Ecuador for Ethereum. So these are pretty significant, right? But I wanted to kind of drill down on a couple of your points there. First is this notion that it's the energy that

it takes to produce these cryptocurrencies, Bitcoin and Ethereum, that actually derives their value. And so how I've seen it explained is that as more and more of these coins get produced, the amount of work that needs to be done, so the mathematical calculation and then obviously the computing power to do that calculation increases. And so if the value of the coin is not going to rise, then there's less incentive to get more people to have the computers running, I guess, to do those calculations. So would that be kind of the right way to explain that kind of argument? And do you think that there's merit in that argument? Well, the piece you're referring to by Pipkin, I thought was very good. I think there is potentially some merit in that, especially because this notion that these cryptocurrencies

derive value from the proof of work and the energy put in, it's something that in a way, even critics can agree, because we at least see that, okay, this is how people who do value Bitcoin seem to derive value from it. So you kind of accept at least their logic. The problem this raises is, okay, if people who kind of believe in these cryptocurrencies do abide by that logic, that as much as you put in, that creates the value, then you have to keep increasing that because you want to increase the value. So you have to increase the energy consumption. And as far as I understand, that's sort of the tendency that Everest drew out in that piece, among some other really good comments. But there's an almost built-in inevitability or sort of cyclical nature to this or kind of self-compounding nature of if

you do want the number to keep going up, then you do have to keep pouring more energy and computational resources into this network. And that's certainly troubling to someone like me. You know, we could get pretty in the weeds with some of the arguments from Bitcoiners and others about why they claim that these currencies are actually not so ecologically devastating. I don't really buy those arguments. I think you probably don't either. But just to briefly sort of present some of them, some of the arguments is that, oh, Bitcoin uses waste energy that's sort of from the periphery of electrical grids that will otherwise go to waste, or that it becomes this incentive to produce more green energy, or that also that Bitcoin is a

battery, is this other sort of evocative phrase you see sometimes, that Bitcoin is a battery is this other sort of evocative phrase you see sometimes, that Bitcoin is both something that plays a positive role in developing energy markets, and also Bitcoin itself is kind of a repository of energy and of value in that way. So they're at least useful to know what people are saying and to kind of see how they conceptualize Bitcoin. But I think there are some problems with those arguments. Yeah, I agree. And as you say, I'm also really concerned about the environmental footprints of these cryptocurrencies, especially when I think the actual kind of

societal value that they produced is low if it exists at all. But I think what you're describing there is really interesting, right? And I think that leads to another of the potential issues, because I'm sure that there is definitely some value that leads to another of the potential issues, because I'm sure that, you know, there is definitely some value that needs to derive from the fact that they are consuming so much energy and more and more energy. But obviously, there is a speculative piece in there as well, right? That we can't dismiss because clearly speculation, financial speculation is also driving some of that price. But I think kind of building on that, this is kind of the proof of work cryptocurrency, because they need to do these mathematical

calculations that require more and more energy in order to update the blockchain and, you know, make the transaction happen, etc, etc. But some of these cryptocurrency folks and Ethereum, the people who manage that in particular, say that there's also this proof of stake way of doing this that would reduce the environmental footprint. So I guess I'm wondering, do you think that is a realistic argument? Because as I have understood it, this idea and ones like it have been held out for a number of years as kind of the environmental solution to the cryptocurrency energy use problem, and it never seems to really arrive. Yeah, I mean, I admit that proof of stake is something I've read about a bit, but

once you start getting into these other models, they're certainly worth exploring, I think. But then you get this question of, well, why hasn't it really arrived? And why haven't these other models been pursued? I mean, part of it is that Bitcoin sort of had a head start and kind of let off the speculative media. So there isn't a lot of incentive necessarily to pursue these other models as long as most of the profits for a lot of people are confined to just a couple coins. I sometimes feel a little sort of too dogmatic or reactionary by doing a whole sort of wholesale rejection of various types of cryptocurrency or cryptocurrency in general. So that's why I wouldn't dismiss proof of stake or other models entirely. But again, there's the question of when are they going to get here? But then there are also still

the fundamental questions of do we need this? Is the environmental toll of even a less sort of destructive cryptocurrency worth it? And I think one area that's also not really paid as much attention to is just the idea of what is money supposed to do if you consider it money and not a store of value. Sometimes you can go in circles with some crypto fans where they say, well, it's not actually money. It's a store of value or it's an asset or something else. But basically, it's supposed to be money. It's supposed to be spendable. And what do you expect out of money? And I think unless you're a serious libertarian or really don't think the state should have a role in the money supply. Otherwise, I think the state's role is actually to manage money.

And that's one of its few prerogatives. And that's something I've been thinking about more lately. Even if you solved all these environmental issues and kind of associate concerns with crypto. Do you really want kind of a self-sovereign or uncontrolled money supply that kind of recreates certain aspects of feudalism with power flowing to the people who simply have the most money? I mean, that's obviously a problem already in our society. But if you then kind of give up all governance of the actual money supply and monetary policy and any sort of regulation and create some sort of decentralized market, I think you're just going to create a whole range of social and political problems that we arguably solve by entrusting the

state with minting money. Yeah, I think that there does need to be more attention on kind of the libertarian ideology that underpins a lot of these arguments for cryptocurrency. And instead of just taking them at face value, really challenging whether they would or are really producing the kind of benefits that they claim. And I think, as you're explaining there, that they really don't. And I agree with you that I have a hard time accepting that they have to exist for some reason when they can't actually show that they are producing social benefit. Yeah. I also think like, look, there's a lot of stuff in our lives that we don't necessarily know exactly how they work and we just use them anyway. Like I couldn't tell you exactly how a car works or even a computer. I built my desktop computer, but I couldn't tell you how each component exactly

works. I just know the graphics card connects here and stuff like that. So of course we do this in our lives all the time, but I do think a big part of or big barrier to adoption for crypto and for Bitcoin and for NFTs, everything we're talking about here is the sort of intelligibility and explainability factor. It's interesting to me because especially with Bitcoin, people think it's inevitable. It's the money of the future. Everyone should have it despite it being scarce. Of course, you can keep chopping bitcoins into little Satoshis and stuff. But to me, if you can't somewhat easily explain what this is and why it's valuable, maybe this is a little insensitive sounding, but like there's the grandma test for startups, I think it's called, where it's like, can you explain to your grandparents

what your company is about in a couple sentences or something like that? I don't know if that term is still used. But, you know, I think there's something to that, that mass adoption of a technology or of a service or something like that requires a certain amount of mass understanding. And there are a lot of barriers to that right now. I mean, this is just my own bugaboo, but one I think is the culture of Bitcoin, which I think has some problems with it, but also just the complexity. So how can this really take off and be brought to the people when it does seem so hard to understand and when all the critics are often told, actually, you just don't get it? And that's the conventional response to criticism is, oh, you just don't get it. I don't know what you do there. The other sort of related idea I keep coming back to is the sort of critics of Bitcoin I engage with who say this, you just don't get it kind of thing, seem to want people like me to have some epiphany where I finally, I do get it. I realize

like you're reading the Bitcoin white paper or you're reading something or you're listening to one of these Bitcoin influencers and suddenly the heavens part and there's a moment of epiphany and you get it. I obviously haven't had that yet. But that to me is one of the main barriers of adoption is if you can't sort of explain it in generally digestible terms, then how are you going to bring people in? Yeah, you know, when I kind of encountered that argument as well, the kind of you don't get it argument, it does seem to be like they are suggesting that there's kind of a factual aspect of this that you don't get when it's really usually more of kind of like an ideological disagreement about cryptocurrency in general,

right? And they just believe that it is something different from what I might believe that it is actually doing in the role that it's serving. But I wanted to switch gears a little bit, because I think that there's something that's particularly interesting with how NFTs have been sold and, you know, how they boomed in the past few months. And that's that there's been this kind of argument that this is something that is going to help artists, especially at a moment when, you know, we've been in this pandemic for a year now, and especially musicians have not been able to play live shows and have been struggling as a result. And there was an article written in The Atlantic by Anil Dash, who is the CEO of Glitch and who says that he's one of the people who kind of originally came up with this process that is now known as NFTs. And in

that article, he wrote, our dream of empowering artists hasn't yet come true, but it has yielded a lot of commercially exploitable hype. And it seems to me that, you know, so many of these technologies, like it seems to be a way to promote them by saying that they're going to help artists when really they further exploit artists. So I wonder what you make of this kind of framing and whether you think that NFTs are actually helping artists, as they say. Yeah, it's interesting how many technologies we're told are going to be empowering or liberatory, emancipatory, or will democratize something. And then they don't seem to do any of those things.

Or instead of democratizing access to something, they sort of socialize problems with the technology instead. So it's interesting. I think NFTs, if you're just an artist who's trying to make money off their work, I can see the appeal. But one problem is the lack of control we've seen that artists often have over their own work. And this has been exacerbated by NFTs because in a lot of cases, almost anyone can make an NFT out of anything. And so I'm sure that some of these NFT marketplaces have standards in terms of use and things like that. But lots of artists have found that their work was kind of tokenized out from under them, turned into an NFT and put on

a marketplace and then sold. And then you have all these other stories of people losing access to NFTs or actually losing the NFT itself because it somehow gets transferred to another blockchain out from under them also. So a lot of those promises of easy monetization, of sort of permanence, of establishing ownership, those of all kind of, to go back to what we were saying earlier, have been muddled. So I don't think this is really the way necessarily for more than a few select artists who are going to make a ton of money because they catch the eyes of some of these whales, some of these crypto whales. I think that's what we're going to see. But there's not going to be, I think, even a long tail of people making small amounts of money. I think it'll be mostly a few big ones at the top, especially early on in this bubble, as we've seen,

and then others sort of struggling to not only keep control over their work, but then to monetize it. So that's where I kind of see the landscape in terms of artist monetization. I think another problem also with NFTs is they're not discreetly necessarily for one thing. The virtue of physical media is it doesn't really change much, or a painting is a painting. NFTs can kind of be anything. So in a way, they don't really feel like they're for art or for music. They're almost too elastic. And if you're thinking a little more abstractly or kind of putting your critical faculties on, you realize that NFTs are this great kind of neoliberal technology because you can tokenize all kinds of things from a tweet to a real piece of art to just any website or something like that. Pretty much anything can be submitted to this process and then monetized that way. So in that sense, actually, I think NFTs reflect some of the bad tendencies in digital technology and culture, which is that people lacking traditional modes of income, whether they're everyday workers or especially people in the arts and culture, they're now left to sort of monetize every other aspect of their life.

And so NFTs seem like an attempt to get back to monetizing the work itself, but they're so messy and lacking the kind of stability and permanence that they claim and aspire to that they don't really solve the problem, I think. I think that's a great point. You know, I was reading a recent piece by Taylor Lawrence in the New York Times where she was describing how, you know, there are so many new apps and digital services that allow us to kind of sell and commercialize more aspects of our lives. And, you know, obviously there are influencers who are benefiting most from that. But, you know, as it becomes normalized and the people watching them see, you know, the people that they look up to or watch frequently want to emulate doing this, that they participate in it as well.

And it does seem to create this really worrying trend toward the monetization, the commercialization, but also, as you're saying, the financialization of more aspects of our lives, where it's not just, you know, art and pieces of music and tweets and, you know, whatever JPEGs and whatever is being made as NFTs, but there's even more of this that is happening. And it seems like the perfect moment to be doing something like that, where we're all kind of still stuck inside, still communicating online, and more and more of our lives are mediated by these technologies. Absolutely. And, you know, there's a general philosophy throughout tech that when data is produced, you might as well collect it and make it useful.

And there's a similar idea in sort of how we're monetizing things, which is that if anything can be tokenized or anything can be kind of monetized or put up for public consumption, then there are a few limits. I remember the Taylor Lorenz article you were talking about, and that was interesting. I mean, I think there were influencers who were talking about you could bid to tell them what to do or what to eat or where to go or things like that. And it seems absurd and kind of dystopian,

but also, of course, it seems very much of the moment. And I think NFTs do have a lot in common with influencer culture. I mean, one thing, just to go back a moment, we should probably say is that the things that NFTs are trying to sort of replace or augment are not necessarily perfect. Like the art market is very troubled. And we haven't even gotten to the money laundering issue, which occurs both probably with NFTs and certainly in the traditional art market. So it's not to say that the old ways are always good, but it's also not to say that the new ways, just because they're technologically novel and seemingly sophisticated, represent progress. I was also interested in another

aspect of this, the reaction to it by some of the media. And I think it's fair to say that a lot of media does not have a great reputation for how they respond to new digital services and quote-unquote technologies that have emerged over the past decade. I think that there has been legitimate criticism of how the media has legitimized the gig economy and the exploitation that has come out of that, but also a lot of other negative developments that have come from Silicon Valley and that we are now trying to reckon with as a result. And so I noticed that the New York Times was selling an NFT, that Forbes now has a front page cover story with the Winklevoss twins, who people might know from the social network as the

people who Mark Zuckerberg apparently stole the idea of Facebook from. But kind of putting them on the front page and kind of promoting NFTs is this kind of positive force, this kind of thing that is going to create a ton of opportunities for people or whatever, selling their own NFTs. And, you know, a bunch of other media have sold NFTs of their own as well. So I wonder what you make of this kind of response and this kind of participating in this NFT market as well, and whether you think their credibility is hit in some way by participating in this kind of financialized market as they are reporting on it as well? Well, I think there are certainly, as you allude to, a lot of problems with mainstream tech

reporting. Broadly speaking, I think some publications have gotten better. There are certainly some great tech reporters out there. There's more skepticism now than there used to be in general. But the NFT coverage is kind of a throwback in a way because a lot of it has been sort of, wow, look at this thing that all these people are spending so much money on. Isn't that crazy? The internet's wild. It's just a lot of it's felt like that. And I think that's particularly clear with the production and participation of companies in making NFTs. It's a little much for me. Maybe it was inevitable that someone would do this. And when the first one happened or one or two, I know the New York

Times did one, you go, okay, I get it. But it does seem strange. I mean, when a business section of a publication is reporting on some novel investment vehicle or some new type of derivative securities or something like that, they don't suddenly go out and buy those securities. And so I don't see why they had to go out and make an NFT and sell it. The other thing is also, as we've established, and maybe we're kind of sticks in the mud, but it's an environmental issue. And so it's completely unnecessary to make this thing

where there's what's called a gas fee through Ethereum, where you have to basically pay a fee in Ethereum, and there's the energy consumption. And it's just sort of a waste to even produce one of these things and kind of unnecessary. So I think there is that sense that whenever something novel comes along that is getting a lot of money thrown at it in tech, a lot of skepticism does kind of go out the window. Or it just gets reported as kind of look at this funny new fad that we're not really sure what to make of when it's not that hard to bring some skepticism and context and critical faculties to bear sort of from the beginning. Yeah, I think that's a really good point on, you know, some of the issues with the Winklevoss twins, who I think are some of the major kind of pushers of cryptocurrencies and this whole market and obviously NFTs as well.

But I guess what do you make of the way that the Winklevoss twins are getting this kind of attention and I think the broader kind of influencer culture that exists around cryptocurrency and I guess NFTs as a result? So the Winklevoss twins are big Bitcoin holders, I believe. They've invested in a lot of crypto companies. They have their own crypto exchange called Gemini. So in some sense, they're doing well and they're, you know, they have actual businesses and are sort of helping lead the crypto field. But in a lot of ways, they do represent sort of this influencer culture that suffuses all of crypto. I really think it's an increasingly big part of things.

So a lot of being in this industry seems to be about sort of selling it and giving the brief for crypto of why people should be doing it. And it comes in this various kind of celebritized form through notable industry figures like the Winklevosses or the heads of different exchanges like Justin Sun from Binance or Michael Saylor, who's blocked me on Twitter, the CEO of MicroStrategy, who is a big Bitcoin influencer and obviously Elon Musk. And so I think you have to ask yourself, why does a lot of stuff, including NFTs, seemingly depend so much on celebrity and on influence and on kind of marketing and salesmanship and promotion. And why do the products and technologies have a hard time selling themselves? And NFTs may be the apotheosis of this. I mean, even a lot of crypto people will

say they think NFTs are junk, but they might say, well, that's separate. That doesn't have anything to do with us. And I think as our discussion kind of establishes, NFTs have a lot to do with the rest of crypto. But again, NFTs are kind of the height of this because just today, Tom Brady announced that he's going to have an NFT company called Autograph that'll cater to athletes. They have all these big executives advising them. You know, probably a good idea because I doubt he's putting much of his own money in. But you really see that these new vehicles to promote and distribute and create NFTs are often really just crafted around famous people as names, as figureheads of these companies, which is, of course, something that happens in all kinds of businesses. But you really see a

concentration of it here in crypto and in NFTs, where it seems much more about the famous face at the top and the famous face pushing something. And they all interview each other and talk to each other and appear on each other's shows and go do stuff with the mayor of Miami, who's now a crypto influencer and booster. So it's really, you know, about these kind of high level relationships that occur between these influencers. And to answer your original question, I think the Winklevoss twins, while they're clearly successful in the field, they really embody a lot of that. They're not more powerful than Zuckerberg now, but they sort of had their revenge by becoming a little bit famous in their own right. Yeah, I think what you're saying there, it really makes me think about, you know, this larger kind of discussion. I think that's been

going on for, you know, a while now that we seem to be entering into this kind of discussion, I think that's been going on for a while now, that we seem to be entering into this kind of hype economy where these stocks, and we saw this with the GameStop stock and these other ones a few months ago, we see it with NFTs, with cryptocurrencies, with just stocks trading on the regular stock market, that it seems that hype, and obviously hype that comes from people who have a lot of attention, influencers, celebrities, things like that, can really drive the prices of these assets. So maybe this is an obvious question, but do you see NFTs as part of this? And do you see it just kind of continuing to accelerate? Or do you think that we're ever going to kind of get a hold on

this? Or is it just going to keep going until it kind of busts? Yeah, I think that we're ever going to kind of get a hold on this? Or is it just going to keep going until it kind of busts? Yeah, I think hype economy is a great term for all this stuff. And for how a lot of things get big today. Virality is sort of the core concept at play here. Anything that gets popular enough online sort of inherently has some value, even if it's just a hashtag that might be leveraged to advertise something. So all these assets are kind of working off that same principle, which is that just generate enough hype or virality or kind of online attention. And you can then make the number on the screen go up or the or the graph go up. And you're very right to invoke GameStop stuff was kind of fun, but it was so representative of this of this hype economy and of the value of things being really divorced from any fundamentals, from any sort of material underpinnings. As for where that goes, I do see it as a bubble that's going to burst in some way.

Already, you mentioned this off the air to me, but I think we've seen some NFTs declining in value or not selling for as much. Some of the coverage has said this is sort of linked to stimulus money that people had. But I really think still you have to look at a higher tax bracket and what the really rich people are doing. Some of them are going to get bored or they'll realize that NFTs aren't maybe a good investment in the long term. Or just look at it practically, which is that what's the likelihood that in 20 or 50 years, say, the NFT that I buy today will still be accessible to my descendants? It's just very unlikely. Whereas the painting on the wall, of course, it could decay, it could be destroyed, it could get burned or lost or something like that. But the painting

on the wall is a lot more likely to last and be accessible and viewable and be a real asset than something on a blockchain, given the rate of kind of technological adoption and decayable systems and things like that. I think you're going to have a form of almost link rot with NFTs, where you know that they exist out there, but you lost your password or the blockchain was forked or something like that. And they're simply no longer the discrete non-fungible thing that is still increasing in value. How soon all that happens, I don't know. But honestly, I wouldn't be surprised if the NFT bubble just collapsed this year. And by the end of the year, some of these companies failed and we're not really seeing much sustainable business coming out of them. Though that could take some time because there's a lot of money flowing in right now. So you might see on the purchasing side or something like that, some of these prices

going down, some things not selling. But you have all this money from VCs going into these companies that are establishing NFT marketplaces and things like that. I've had a couple of friends, I can't really speak to details, but just friends who have been solicited by crypto and NFT companies to work for them in like marketing and sales tech jobs. So it's clear that there's a lot of money going on. And like it might be similar in a way to the 2017 coin bubble, when there are a lot of other cryptocurrencies being brought into play, and a lot of companies being founded and stuff. And almost none of that survived. And it was a bubble that popped. I think you'll see something similar to that. Yeah, I think that's a great way to describe it. And, you know, as you

were saying, I believe it was CNN and Bloomberg,, you know, I'm sure other places have reported it, but saying that the prices of NFTs have plunged by about 70% from their high point in February. So already, you know, this thing that I think has only really been in the public consciousness for a few months is already kind of seeing this decline. And as you say, the wealth of these incredibly wealthy people seems to be at least what is driving a lot of this. And so this is kind of an extension of the last question, but do you think that until we see interest rates going up and the wealth of these really wealthy people kind of reigned in, that we're just going to see this series of kind of hype bubbles every few months as this money is flooding into increasingly speculative assets,

trying to get some sort of return because, you know, there's so few places left for it to go? I think that's very possible. It's a great question. There seems to be a decreasing number of places for money to go for sort of people who have everything. But I also think part of it is just sort of the novelty and the appeal. And again, the celebrity and influencer quality is what makes a lot of this exciting and interesting to people, and especially to very rich folks. So once you see the bubble itself burst, they'll probably move on to something else. But the sense that sort of speculation is linked to technological novelties, linked to these new sort of quasi-fictional assets being created. Yeah, I think you will see more things like this.

Maybe we won't call the next one six months or a year from now NFTs, but I think they'll have a lot of similar properties. Yeah, I think we're definitely headed down this route, unfortunately, until something happens to change something on a greater scale, I think. Jacob, I appreciate you taking the time to chat with me about NFTs, to inform the listeners about them and the issues with them. Thanks so much. This has been fun. Thanks. Jacob Silverman is a staff writer at The New Republic and the author of Terms of Service, Social Media, and The Price of Constant Connection. You can follow Jacob on Twitter at at Silverman Jacob. You can follow me and at Paris Marks, and you can follow the show at at Tech Won't Save Us. Tech Won't Save Us is part of the Harbinger Media Network, and you can find out more about that at harbingermedianetwork.com. And if you like the show and feel like you learned

from it, please consider going to patreon.com slash tech won't save us and becoming a supporter. Thanks for listening.