Let me introduce you to Ether rocks: 100 .JPG images of, well, rocks.
As I write this, 27 are listed for sale. Prices floor at 250 ETH ($1.1 million) and top at 10,000 ETH ($42.8 million) for an average ask of 3,134 ETH ($13.4 million).
Each Ether rock comes with an NFT, a 1-of-1 token of ownership stored on the Ethereum blockchain. This — not the .JPG file displaying the rock— is the million dollar idea.
It's not just crazy crypto people. The world's biggest brands, influencers and collectors are forking over truckloads of internet cash to get their hands on on-chain rocks, punks and apes.
Like bitcoin in the early 2010s, NFTs feel like tech’s newest shiny toy, a bubble bound to burst. But those who scoff at “expensive JPGs” risk missing the bigger picture. Bored Apes & Co. are the trojan horse for a paradigm shift that redefines assets, ownership and identity for the digital age.
This is not a 101 explainer of NFTs. I took at stab at that in this post on Web3.
To fully grasp the far-reaching implications of code-enforced digital scarcity, we need to dive in deep. Deep into the origins of culture, language, technology, media and art. Where they intersect, we get the real stars of civilisation: memes.
Memes are mental models expressed in language and media. Ideas, concepts, stories, values otherwise stuck in one mind become shareable with others. Like viruses jump from body to body, memes jump from brain to brain.
Mental infection happens through mimesis: the mind's instinct to re-share the ideas that inhabit it. We do it in speech, writing, painting, music and TikToks. When ideas spread from one to many minds through memes, they become inter-subjective. In shared mental consciousness, ideas / concepts / stories / values become bigger as more minds believe them.
Memes network minds around ideas. Across the mind web, they mutate and mesh together into bigger memes that program human behaviour. At the highest scale, they compound into religions and ideologies: all-encompassing ideas about how humans should live. Such epic cultures unlock the large-scale socialisation that really sets humans apart in the animal kingdom. Grand narratives like Christianity, democracy, human rights and money align millions of strangers in collectively imagined realities.
Culture is a market wherein which minds (demand) spend attention (capital) on memes (supply).
Attention is where a mind focuses energy. Pay a meme attention and it intersubjectively inflates — ignore and it dies.
The more attention a meme stores, the bigger its cultural capital. Cultural capital signals how much a society values a meme. For example, the Mona Lisa's cultural capitalisation dwarfs that of your latest Instagram post.
Religions and ideologies compete in the same way. How a society allocates cultural capital explains its configuration. Americans and Europeans value free speech, fair elections, private property and separation of powers more than Russians and Chinese do.
Memes win competition for attention by being more useful and infectious than others. Eventually, they establish in self-reinforcing traditions and institutions. This defends their cultural capital from new memes, which need to be superiorly useful and infectious to take over. Bitcoin, for example, is currently challenging the institutional fiat money meme.
Cultural capital is upstream from economic and social capital:
- Economic capital is money. You exchange it for value and that is, at least partly, subjective. It's why Gucci, Apple and Ferrari are disproportionally more expensive. The price of art rises as it stores more cultural capital.
- Social capital is status. What people care about determines who they want to know. Influencers have millions of followers because they best mirror what most find important.
Here's your first hint at why Bored Apes and Cryptopunks are so expensive: they're the most original and resonating artistic expressions of a free internet not owned by corporations.
At first, people buy in to signal identity: they're cultural insiders. Once on millions of timelines, mimesis multiplies cultural resonance in a self-compounding loop of re-shares, influencers and headlines. The myth becomes bigger, the club more exclusive. Some can't resist the FOMO (social), others speculate the top isn't in yet (economic).
Wouldn't it be wonderful if capital organically flowed to the most useful and most resonating memes? Rewarded the best meme dealers: artists, thinkers and inventors?
Alas, meme markets are not free nor meritocratic. They're closed networks whose rulers censor and enforce memes for self-interest.
Networks benefit from network effects: each new participant increases network value for all others. The biggest network pulls in all social and economic capital to become the only network. At its head stand the most powerful people in society. Their memes claim all cultural capital.
Rule memes, rule minds
In liberal societies, meme distribution networks are run by shareholders who manipulate meme markets for profit. The business is to claim and mine memes for attention, then auction it off to advertisers (economic capital). In exchange, we get to keep the followers (social capital).
The internet started open for all but then closed around a handful of winning networks. Today, they monopolise attention and culture much like the medieval Church. We obey, pray and repent to Instagram, TikTok and Twitter for clout like we did to God for heaven. Internet culture mimics algorithms like medieval culture mimicked the Bible. Its biggest stories, heroes and rituals are sensational, outrageous and mostly made up because those get the most clicks.
The Great Equaliser
Cultural cartels don't last. Their socio-economic moats eventually break under pressure of history's great equaliser: technology.
Consider the tale of the printing press.
Before its invention, only the Catholic Church had enough capital — i.e. monks with time and skill to hand-copy text — to spread memes. Christian memes monopolise medieval mimesis and God's words naturally legitimise Catholic rule.
Mechanised printing lowers entry barriers by cheapening distribution. New meme dealers emerge and challenge the Catholic order (Protestantism). As people learn to think for themselves, truth-seeking becomes authority itself: the scientific method. Off slides the veil of faith, illusion and dogma. The new arch-meme leads art and thinking into a cultural revolution: the Enlightenment.
In its wake, the decentralising meme network would replace religion with modern ideologies like capitalism, liberalism, nationalism and democracy as the new cultural base layer. "God is dead," as Nietzsche put it. Murdered by technology: the printing press.
A free market for memes
Blockchains are the internet's printing press. They replace priests, autocrats and corporations with verifiable code so network ownership distributes across participants.
Network capital decentralises through tokens. Fungible (interchangeable) tokens like Bitcoin and Ethereum are money: economic. Non-fungible tokens (NFT) represent 1-of-1 assets with cultural capital. We use fungible tokens to buy (ownership of) non-fungible assets: paintings, Teslas, Pokemon cards, sneakers, diamonds.
On the internet, all 1-of-1 assets are digital memes. Memes accumulate cultural capital with every re-share. The more viral the meme, the bigger its cultural capitalisation.
Without NFTs, creators hand over meme ownership to platforms that monetise its cultural capital. The more viral the meme, the more eyeballs the platform sells.
With NFTs, creators secure meme ownership and its future capital cashflows across platforms. The more viral the meme, the more valuable its scarce NFT — tradable by the creator for money.
Who should own internet culture?
More and more attention is paid online over offline. Soon, digital life will matter more than material life: the metaverse.
NFT technology matters because it traces a path to open decentralised digital culture, so vibes and tribes can roam free from power-hungry gatekeepers like Facebook.