Upstream - NFTs with Nathan Schneider and Cory Doctorow

Episode Date: November 24, 2021

In this episode we’re talking NFTs. If you don’t know what this latest phenomenon in the crypto, blockchain, asset speculation world is, if you’ve heard of NFTs but wanna know more, or if you wanna hear why NFTs might be leading us to an (even more) dystopian future — we’ve got you covered. We’ve brought on two guests to help unpack the NFT craze: Nathan Schneider is an Assistant Professor of Media studies at the University of Colorado, Boulder, journalist, founder of the Media Enterprise Design Lab, and author most recently of Everything for Everyone: The Radical Tradition that Is Shaping the Next Economy, published by Nation Books. Cory Doctorow is an author, activist, journalist and blogger, editor of Pluralistic dot net, former European director of the Electronic Frontier Foundation, and author of the novels Attack Surface and Walkaway, as well as nonfiction books like How to Destroy Surveillance Capitalism.  This episode of Upstream was made possible with support from listeners like you. Upstream is a labor of love — we couldn't keep this project going without the generosity of our listeners and fans. Please consider chipping in a one-time or recurring donation at www.upstreampodcast.org/support If your organization wants to sponsor one of our upcoming documentaries, we have a number of sponsorship packages available. Find out more at upstreampodcast.org/sponsorship For more from Upstream, visit www.upstreampodcast.org and follow us on Twitter, Instagram, Facebook, and Bluesky. You can also subscribe to us on Apple Podcasts, Spotify, or wherever you listen to your favorite podcasts.

Before we get started on this episode, please, if you can, head over to Apple Podcasts and rate, subscribe, and leave us a review there. It really helps get Upstream in front of more eyes and into more ears. We don't have a marketing budget or anything like that for Upstream, so we really do rely on listeners like you to help grow our audience and spread the word. And please, as always, visit upstreampodcast.org forward slash support to support us with a reoccurring monthly or one-time donation. That donation helps keep this podcast free and sustainable. So please, if you know, people selling art on the internet to, to like the colonization of the Americas.

But in some ways, the concept is the same, this concept of enclosure. And this is something that is the kind of origin point of capitalism. It's what Marx called primitive accumulation, the grabbing of resources that enables the system to seem like it's functioning. of resources that enables the system to seem like it's functioning. The constant expansion of what is available to the market. And in history, this has been a process that involves incredible violence. And I don't think we know what is at stake and what is going to be at play in these kinds of systems. But the pattern looks very similar. You're listening to Upstream. Upstream.

Upstream. Upstream. A podcast of documentaries and conversations that invites you to unlearn everything you thought you knew about economics. I'm Della Duncan. And I'm Robert Raymond. In this episode, we're going to be talking about NFTs. If you don't know what this latest phenomenon is in the crypto blockchain asset speculation world, or if you've heard of NFTs, but you want to know more,

or if you just want to hear why NFTs might be leading us to an even more dystopian future, we've got you covered. We have two guests in this episode to help us unpack the NFT craze. Nathan Schneider, who you'll hear from in the first half of the episode, is an assistant professor of media studies at the University of Colorado Boulder, a journalist, a founder of the Media Enterprise Design Lab, and the author most recently of Everything for Everyone, The Radical Tradition That Is Shaping the Next Economy, published by Nation Books.

Earlier this year, Nathan wrote an article for American magazine titled NFTs Are Leading to a New Financial Dystopia, Here's Why You Should Care. In the second half of the episode, we'll hear from Corey Doctorow, an activist, journalist, and blogger, editor of Pluralistic.net, former European director of the Electronic Frontier Foundation, and author of the novels Attack Surface and Walk Away, as well as nonfiction books like How to Destroy Surveillance Capitalism. Earlier this month, Corey wrote the article, Right Clicker Mentality, Bezzlers Coin a Phrase to Describe the Anti-Bezzel, which we'll be focusing our conversation on. Don't worry, we will unpack that title there too.

But first, here's Robert speaking with Nathan Schneider. Welcome back to Upstream, Nathan. It's great to have you back. Thanks for letting me back. Yeah, of course. So yeah, I think it might be best to start with a basic 101. So can you explain what a non-fungible token or NFT is? And feel free, just for folks who are not really plugged into this world, to give some context on just, you know, briefly blockchain, cryptocurrency, Ethereum, all of the sort of building blocks we need to know to understand NFTs. That's a lot. So maybe you're familiar with this idea of cryptocurrency, you know, starting with Bitcoin, this idea that you can trade monetary units around on a network

without having some central bank or other entity keeping track of who did what. The whole network itself keeps track of what happens with every Bitcoin or really more precisely, who has how much at any time. And so that works with currency elements and with something like Bitcoin, every unit of Bitcoin is essentially the same. The idea with NFTs is to replace that idea of interchangeable money and instead put unique things on the same technology, on this thing called blockchain, this list on a network of who owns what. And so in the same way that the network itself, the participants in the network keep track of who has how many units of currency, in the case of NFTs, you're able to track who holds this one non-interchangeable object, this digital representation of something. And that something can be whatever the digital

representation says it represents. So things people have been using NFTs for include art, include land in video games. People are exploring land in non-video games in real life. Anything that you want to assign these objects to, they can be assigned to. And so this has been a kind of boon for a kind of new range of possibilities of ownership. Another component of this, and here's where the Ethereum idea really comes in, is that in the context of these blockchain systems, and this was the idea really pioneered by Ethereum, the second most popular, most valuable cryptocurrency after Bitcoin, is the idea that the things on these networks could be programmable. So they're not just dumb money that you could pass

around, but actually you could encode contracts and rules and agreements into the objects you're passing around on these networks. So apply that to NFTs. You could have a piece of art represented on the NFT, but have a stipulation in it, for instance, that says every time this thing gets sold, part of the value goes to the artist. You could really write anything into these. So on the one hand, it's kind of another way of doing property. But on the other hand, it allows for a kind of creativity into what we mean by property that is to some degree new.

And it's also self-executing. It doesn't require a terrestrial court to acknowledge that these rules are valid. They're encoded in the network, the network decides they're valid. And so it opens some doors and, you know, also introduces, you know, some scary stuff as well. Right? Yeah. So we'll get into the scary stuff. And we'll get more into the not scary stuff in more depth as well. But I guess first, I'm just curious, like, why is everybody talking about NFTs all of a sudden? It seems like just even in the last two weeks, if not, you know, a little bit longer, more gradually in the last few months, like NFTs have really exploded. And so yeah, do you have sort of like an idea why that might be? Well, it's a new medium. And I think when

something new comes along that enables people to do something they couldn't do before, there's kind of a frothy moment where people are trying to figure out what are the possibilities of this medium. And that's an exciting thing. I mean, you see some cool human potential, you know, human creativity emerging from this kind of moment. And, you know, another reason that there's kind of excitement and froth around this is that there's been a lot of value created in blockchain systems over the last few years, like lots of digital representations of things that are worth a lot of money, like Bitcoin is now in the trillions of dollars in valuation, and you can't really do much with Bitcoin right now.

So there's an artificiality about this that there are a bunch of people out there who have like gobs and gobs of dollars worth of cryptocurrency looking for something to do with it. And this is actually something you can do with it is buy digital art. So suddenly these people who two years ago were like programming geeks obsessed with monetary theory, now they're suddenly art collectors. That's what they're getting into. And in some ways, it just has to do with this kind of weird artificial economy that has needed an outlet. you know, sports figures and all sorts of people have been getting in on this benefiting, in some ways from the money just flowing around in this very artificial new frontier, and also just exploring what you can do with it. I want to pick up on this article that you wrote back in March,

called NFTs are leading to a new financial dystopia. Here's why you should care. And so I did originally email you to come on the show. And you told me that you don't really stand by everything that you wrote in this piece. So with that caveat, I'd like to understand where you were and your mindset when you did write this piece. So why do you feel that NFTs or why did you feel that NFTs are leading or were leading us to a financial dystopia? I haven't totally gotten off the dystopia worry. And it really has to do with old anxieties about the quantification and economization of everything. And this idea that if you can figure out how to turn more things into a commodity,

into something you can buy or sell, that the excitement about that sort of thing is something we should be concerned about. This is something that social critics have pointed out and pointed to and worried about for a long time. And I count myself as one of those. I hope for a world in which we can do less bean counting and more living and where we work toward an abundance

rather than a mindset of scarcity. And digital tokens, what they do really, really well is create artificial scarcity. You know, what is Bitcoin? But an artificial scarcity system that makes up this thing just to make it scarce. There's a limited number of Bitcoins and that's why they're worth anything. And that was part of the philosophy and the design. And my sense is, why should we create scarcity about something that doesn't need to be scarce? Why should we make up more scarcity? There's enough scarcity in the world. Let's try to make less scarcity. more scarcity. There's enough scarcity in the world. Let's try to make less scarcity. And second is just that the way in which is applied in the context of art. I have a painting on my wall by an incredible painter named Amanda Shulow, and I don't own it. You know, I consider myself a

babysitter. She sent it to me because she needed someone to take care of it. You know, she's someone who, as many artists have for a long time, sees a deep kind of disconnect between commercialism and artistic practice, that commercialism threatens her artistic practice. And I keep being like, Amanda, your work is amazing. Let's figure out how, you know, I want you to make a living. I want you to do, you know, but I also want to hear her. I want to trust that there's something right about that. She's not the only one who's raised that kind of concern. And so, and artists' practices for so long have actively been on the forefront of resisting the commodification of everything. You know, one document that I think is so important, came out just last few months, is this report you can find at art.coop. And it presents a kind of vision of artists as a focal

point of the solidarity economy. And the authors point out this language of culture keepers, culture holders, people in many cultures who carry their cultural traditions, but often are not professionalized in any way, who are supported by their communities, recognizing the value of the culture they hold. And I think that kind of approach to thinking about art and culture is really essential, that we need to recognize its value irrespective of what a market at moment X and moment Y, what price a market is willing to put on it. Culture has always had that kind of what price a market is willing to put on it. Culture has always had that kind of resistance to the market. And I'm concerned about, you know, an unbridled enthusiasm that seeks to, in some ways, there's a kind of salvific claim to try to save art and artists by turning them

into pure market actors. Yeah, that's super interesting. So I'm going to throw a bunch of quotes at you and just whatever sticks, whatever you want to respond to. The first one is actually from that piece of yours that I mentioned earlier. You wrote, its first stage, except rather than speculating on colonial land grabs and the bodies of slaves, tokens are making commodities of famous people and gifts. This seems less harmful for now until it isn't, until we all become tokenized assets along with the air, water, and everything else we need to survive. Already, crypto markets demand massive amounts of electricity. And this isn't from your quote, but I heard recently that Bitcoin alone has like a carbon footprint equivalent to that of New Zealand. But going back to the quote, that looks more like dystopia than utopia so far. The apparent freedom to speculate quickly turns into servitude to the whims of the market. And then, okay, so also the

writer Corey Doctorow, who you're actually sharing the hour with, has also written on NFTs saying that they have blown up into a massive fraud-ridden speculative bubble that is blazing through whole rainforests worth of carbon while transferring billions from suckers to con artists. Okay, so thoughts? So the underlying concept for that historical analogy, right? It might sound extreme to compare, you know, people selling art on the internet to like the colonization of the Americas. But in some ways, the concept is the same, this concept of enclosure. And this is something that is the kind of origin point of capitalism, is this what Marx called primitive accumulation, the grabbing of resources that enables the system to seem like it's functioning, the constant expansion of what is available to the market.

And in history, this has been a process that involves incredible violence. And I don't think we know what is at stake and what is going to be at play in these kinds of systems. But the pattern looks very similar. And there is also an increasing push to use these kinds of automated systems, as Doctorow says there, to swindle those with less power in the systems, to create kind of abusive dynamics. And then, you know, blame it, look, it's just the system. You know, in the same way we use law, colonial systems use the imposition of law to take value from people who, you know who once lived on land, we do see the possibility of these blockchains whose transactions cannot be reversed

being used to take advantage of people with less power in the system. And in that piece too, I compare this to something outside of blockchain, but I think is very close, which is Robinhood and the kind of push toward more kind of ordinary people getting involved in the stock market through these apps and particularly the GameStop craze, you know, this idea that ordinary people could come in and kind of mess with the

plans of hedge funds and so forth. And that this was being compared to Occupy Wall Street. And from an analysis, you know, 10 years earlier, another kind of resistance against Wall Street, right? And through the analysis of enclosure, it's so different. You know, the Occupy protests were about decentering markets and creating a space in the middle of the street where people could have free food, where people could feel an experience of abundance. Whereas GameStop was enter even more deeply into the commodity society, manipulate and toy with this kind of fictitious financial order. And ultimately GameStop ended up rather than feeding people on the street, you know, screwing a lot of people over who got in on it

and didn't know when to get out. Can you just give a quick background for folks? I know a little bit about the GameStop thing, but maybe just like really briefly, what was that event? So GameStop was a kind of viral moment. You know, we always have these viral moments where particularly through Reddit, people who are retail investors playing around generally on Robinhood, an app for stock trading,

started boosting up stocks without much apparent real value, like GameStop, a retailer of physical video games, and a few other companies that seem similarly doomed. And because it was so kind of antithetical to the logic of the market in certain respects, it caused some financial harm to certain large entities. But generally, the wealthy know how to recover from these sorts of things. But it also brought in a lot of people who got excited about, you know, this is an insurgency, I want to be part of it, I'm going to buy in, and then the price collapses, and then they lose, you know, what they put into it. It's a losing game in many respects. And it's ironic because Robinhood is a platform

that makes its money not by taking fees from its users generally, but by essentially using the data of the user's practices to inform bigger financial bets. And so it's very much a system designed to take advantage of the very people who it claims to be empowering. Cool. Yeah. Thanks for sharing that. And yeah, going back to NFTs, like I do tend to agree with your piece that the whole thing seems just so bleak and depressing that like, I mean, it's not just the the like pure commodification of art it seems like

it's more than that like just the complete transformation of art into an investment instrument which i guess isn't really new but at least in the past art had some kind of value aside from just financial uh but like with a lot of the nfts that are selling for insanely high prices like a cartoon sketch of a lion that's just sort of objectively is stupid and shitty at least like rich people buying bangos had something to do with the physical painting but yeah i don't know it's just like if it's not just about the bragging rights of owning like a lazy line NFT, it's about pure speculation and coin shilling. And either way, it's just so bleak, just feels like the culmination of so many depressing parts of capitalism. Yeah. So there's another side of it that I think is also worth acknowledging. So the art world is already speculative and dystopian, right? And that goes

from the private gallery system to the museums that have boards full of war criminals and climate destroyers. And so I think we need to be careful not to be nostalgic about the status quo. And two things that NFTs introduce that I think are really interesting and worth sitting with. One is this ability to program essentially the politics of the NFT. So in the status quo world, if rich person X buys a painting and sells it to rich person Y for twice as much, you know, the artist doesn't see any of that appreciation. You know, rich person X sees that appreciation. In an NFT, it's quite standard now to program in a royalty for the artist so that every time that sale occurs, something like 10 or 15% goes back to the artist. So an artist sees appreciation. Now,

you know, from the perspective of, you know, a classical kind of Marxist analysis, like there is some capture of the surplus value there for the worker, you know, put it in a very classical sense. And there is a sense in which that is creating, you know, something like, you know, an employee owned company in the form of that NFT, in that there's a proportional relationship between the value and the author receives and the speculator. And I think that's really interesting. I'd like to see where else that could go. Could that number increase with time or decrease or spread out to a community rather than just to the artists? or decrease or spread out to a community rather than just to the artists? Like what other kinds of things might we want to program into these NFTs to reflect the kind of values and value sharing that we want to enact? So that to me is interesting. That to me is a step.

The other thing is that NFTs are really oriented around kind of born digital culture. You know, this vision of free culture that was articulated, for instance, by Lawrence Lessig years ago, this idea of enabling culture to be shared as easily as it is to share data, that is embedded in the NFT culture. If I were to buy an NFT of the Upstream logo... $20,000. Whatever you charge, I'll pay. It doesn't prevent anybody else from sharing, using, or looking at that logo generally. Generally, these NFTs do not have a kind

of exclusivity about them. They are simply a representation of the object. They're a collectible related to it. And generally, the artists retain license to the work. The NFT is separate from that. And so ideas, objects are still allowed to flow freely. I can use as my desktop pattern an NFT that you own generally in this culture, but you really own it and somehow that's worth something. But I think that's really important. And, you know, for instance, I've been exploring just today, you know, looking around at how people are doing this in book publishing. You know, one thing we've been really struggling to unlock is how to enable more open access book publishing. And maybe NFTs could be a way to do that, where some people are willing to pay for the, you know, the object or, you know, some set of NFTs related to a book, and then everybody else can read it all they want. And so it, you know, it helps us unlock that free culture. On the point you made earlier on the quality of the work, I think it's really dangerous to get judgy about, you know, about new cultural emergence. And I agree that a lot of the stuff you see in NFT land

is kind of like pornographic, not necessarily in the sexual sense, but just in the sense of looking like a kind of exploitation and looking like a kind of gratuitousness. But, you know, as the Pope says, who am I to judge? is a feeling that a kind of art that I've been wanting to do and that I've been doing for a long time that wasn't getting any respect from the formal art world suddenly now is getting respect. And I take them on their word on that. And I think there are folks out there, there's a collective in Denver called IRL Art that's been doing some really cool things with NFTs doing Black Lives Matter connected work, doing murals and physical space. That's cool. And, you know, I'm excited about, as in a lot of crypto stuff, you know, there's a lot of froth, a lot of weirdness and a lot of grossness. But, you know, what I'm more interested in, you know, is where's the good stuff. And often what you find is the

good stuff, maybe a minority, but it's it's stuff you can't find anywhere else. You've been listening to an Upstream Conversation with Nathan Schneider. We'll be right back for the second half of the show with Corey Doctorow. Where the palms and tumbleweeds sail Right past the homes they stretch and they fade Rolling like movie credits Far beneath the clear skies How rarely does the West carry So many sights, yeah, let's see the sights No praise with no answers

Must go somewhere far away The Wild West is a slow pan And the sunshine is fake And the ocean is just painted On a backdrop Downtown Miniature sprawls blur From the set lights and the heat Where the summers pass with charades

Right where the sidewalks crack and they meet Just like the sad, sad actress Right before the last scene. How every dozen wasps carry so many sights. Yeah, let's see the sights. Slow players with no answers must go somewhere far away. Let's go somewhere far away When the wild west is a slow pan And the sunshine is fake

And the ocean is just painted On a backdrop somewhere Downtown Downtown. That was Sunday Under Glass by Beulah. Now here's our conversation with author, activist, journalist, and blogger, Corey Doctorow. All right. Well, hi, Corey. It's great to have you on the show. It's my pleasure. It's nice to be here. So as we speak, cryptocurrency or hashtag cryptocurrency is trending on Twitter. or hashtag cryptocurrency is trending on Twitter. Apparently, the Indian parliament is planning to ban private cryptocurrencies. And as a result, it seems like some values are dipping a little bit.

Also, the El Salvadoran government is planning to build a Bitcoin city at the base of a volcano. On an active volcano, it must be said. And also, they're not going to do it because that's just he's just a right wing, obloviating stunter. The president of El Salvador is not going to do anything apart from compromise his people's human rights. So yeah, just a bit of breaking news to sort of get the ball rolling here. But I don't really want to get into that stuff, at least not yet. We can broaden that conversation out later and discuss cryptocurrencies more

broadly. But this episode is really focused on NFTs. And so I want to start there and maybe just with some basics. So we've already gone over this a little bit in the first half of this episode with our previous guest, Nathan Schneider, but maybe just briefly in your own words, what is an NFT? Well, I guess it depends on how deep you want to go. But you know, there's this thing called the blockchain. And it's a way to record entries indelibly in a public ledger. So the ledger, it's what's called an append only log. So you can add things to it, but you can't go back and change what's already there. And an NFT is an entry in that ledger that says that someone gave someone else some money,

and the person that got the money said, here is a URL, and this entry is to solemnize the fact that when you gave me this money, I said a URL exists. the fact that when you gave me this money, I said a URL exists. I don't confer any rights to this URL to you, and I no longer have an ongoing relationship necessarily, but forevermore, if anyone asks, did you give me some money and did I say here is a URL, you can say yes. And then if you'd like, if there's someone who wants to buy the fact that you gave me some money and I said here is a URL, you can sell that fact to them. They can write in the blockchain that they gave you some money and then you wrote in the blockchain that you got some money for the thing where you gave me some money and I said here is a URL. It's pretty abstract.

it's pretty abstract now i want to say that there's another way of talking about nfts that is a lot more benign and that i think is not contradictory to this which is the the definition that the creators of nfts had which was um anil dash and a colleague of his whose name i can't recall right now but uh an electronic artist and anil said it would be really nice if artists could have a way to sell fans or to reward fans who financially support them or support them in some other way with a public acknowledgement so i've done kickstarters where like i put your name in the acknowledgements right and so the book is out there and anyone who has a copy of the book can have it i've got a book once where i uh because it was print on demand every copy was printed for the reader and uh i had a typo bounty where if you found a typo i'd fix the typo and then the next copy printed and

all copies thereafter would have a footnote on that page thanking you for fixing a typo on it right so all of those are like relatively benign i have huge questions about the blockchain and whether it can ever be benign but the idea that somewhere out there the author said thanks to robbie he did a nice thing and everyone can see it and you can point to it and if you wanted to maybe you could sell it although that's a little weird but you know like i used to work in a used bookstore and we'd get collections of books from estates that included signed books you know one time I walked into a science fiction bookstore near my place in San Francisco and there was a copy of my friend Mark Laidlaw's first novel Dad's Nuke in hardcover and it had a super

small hardcover run I'd never seen it in hardcover. And so I bought it. It was from an estate sale that the store had gotten it. And on the inside cover or the title page, there was the most effusive note from Mark to the buyer. There was a poem, there was a drawing, there was just all this like really nice stuff. So I went home and I, and I sent Mark an email and I said like, Mark, sorry to say this this but this clearly this dear friend of yours is dead and he was like oh no that was my first novel they only printed like a thousand hardcovers I signed them all like that but you know so like yeah acknowledgements sometimes change hands and like a thing that can have enormous sentimental value to the original owner can be of very little value to people afterwards

and vice versa you know uh there's a i think it's a copy of c.s lewis's copy of lord of the rings that jr tolkien's inscribed to him that is in out there in collector circles worth a lot of money i can see that totally that's super cool if i had a shocking amount of money and nothing to spend it on i would spend a shocking amount of money on that sure so like the idea is not like intrinsically stupid but the market is the way that it actually is played out it like so that idea that anil had did nothing for like i don't know five six years no one made a thing like he had described it was just a hypothetical theory object now it's a real thing in the world. And it is, I think, I mean, I hate to be like a Debbie Downer, but I think it's really stupid. Yeah. And what you you're describing made me think that like

these things could be cool, right? Like, a lot of this, like world feels like it could be cool, there could be lots of cool projects it could be really useful for artists and it seems just as like most things in i guess broadly speaking under capitalism just corrupted kind of like co-opted and turned into some you know warped version of itself like at this point this point, it's like, what is an NFT if not, for most people, a speculative asset, or maybe a way to launder money or bragging rights, right? Well, why not both speculative asset and way to launder money go together like peanut butter and chocolate. On the question of whether it's bragging rights,

I think there's a lot of that too um i think the impetus for this conversation we're having was a post that i did about right clicker mentality and that's it's not even bragging rights right it's like torsten verblen ask conspicuous consumption right it's it's what they call a flex it's not just like i mean because i've been known to brag about cool things that happen i had a night at the world science fiction convention once where david byrne was playing across the street and i went and i got the last ticket to the david byrne show and i'm a giant david byrne fan i actually like my family used to take all

the shower towels out of the bathroom and there'd be no towels and i'm like i'm gonna buy a towel that is unequivocally mine and i found a dav David Byrne towel with him in the big white suit. And I dry my body on David Byrne every day. And so I went and saw David Byrne and I slightly, slightly know him because we once did a live presentation together. So I emailed his PA and I got to chat with him after the show. And then I went straight from there to a room party that Spider Robinson, who's this writer that I've adored all my life was having. And it was just me and him and a couple of friends. And I hung out with Spider Robinson. I brag about that all the time. I'm bragging now, right? But what I don't have is a million-dollar watch that I wear solely so that people know I

have a million-dollar watch. And there's a difference between bragging and flexing. And also the watch is like super ugly. Yeah, right. There's a difference between bragging and flexing. And I am not flexing. I'm merely bragging. But flexing is a thing that feels to me intrinsically toxic and kind of sweaty and desperate.

Yeah, so let's get a little bit more into that. So you mentioned your article, Right Clicker Ment. What is right clicker mentality? What does that even mean? And yeah, maybe just explain what you were going for in that article and kind of unpack it for us. before you get to the soft, chewy center. So let's start with like what NFTs aren't, but which people pretend they are. So people pretend that NFTs are the bitmap image that's at the other end of that URL. So I send you a URL for the, you know, my picture, my drawing, my software generated item,

my even, it needn't be an image. It could be a PDF. It could be like a novel I wrote or whatever. And people pretend that what they now own is that. And they don't. There's a whole other equally bizarre, but far more commonplace regime that dictates the control of that called copyright and possibly trademark. And it has no intersection with this. You don't actually own any rights to, by dint of acquiring an NFT, you don't own any rights to the underlying work. You don't even own a copy of the work.

You just, all you have is a pointer and a ledger that says that it's mine. But if you're going to pretend that the image is yours, which is what all of the NFT weirdos are doing, right? They're saying, I sold you that image. I sold you the NFT of that image i sold you the nft of that image it's not an nft of an image it's an nft pointing to an image and that may seem like a distinction without a difference but it's actually like a really profound difference right it's the

difference between a sign that says this way to the mona l the Mona Lisa, right? And the people who maintain the consensus hallucination that they are trading works of art. And moreover, that those works of art were made by the artists whose names are on them. And that those artists are the artists who put them into this swirling stream of commerce, which again is not a thing an NFT guarantees, right? I can make an NFT of your art. I can make an NFT of the Empire State Building. I can make an NFT of the Mona Lisa and I can make an NFT of art by litigious weirdos who sue everyone for copyright infringement. And it doesn't infringe copyright, right? Because all it is is like a URL pointing to a copy of that image somewhere on the web so long as i don't make a copy of the image

if i'm pointing to it on their website i can make an nft on of it there's no copyright infringement so if we're going to pretend that an artist made a thing and put it into nft land and then you bought the thing that the artist made from them as an nft which is unequivocally not what's happening, then there is this problem for the people who believe that, which is that I can right click, or if you're using a Mac, you can control click on the image where it loads in a web browser and I can save it and click save as. And now I actually like have something that the NFT holder doesn't have, which is, I actually have a copy of the image, right? I also may have infringed copyright. It's, it's probably not because, you know, fair use and de minimis exceptions and so on,

but I may have infringed copyright NFT holder. All they have is an entry in a ledger that says this URL once was implicated in a thing where money changed hands, not for possession of the URL or the thing at the end of it, just for this. And indeed, you know, the nature of the web is that there is no way to see the image that the NFT corresponds to without actually getting a copy of the image. And so right clicker mentality refers to people who point this out. And so here's where right-clicker mentality comes from, with all of that by way of background, all the layers unpacked. A crypto weirdo, an NFT weirdo, got angry because someone in NFT land, in conspicuous consumption land, said, I think that the steaks served by the viral chef Salt Bae are a ripoff. Salt Bae is a man who serves you a $1,500 steak that he has covered in gold, actual gold leaf, and then before it is served to you, he does a table side performance in which he flings

handfuls of salt in the air. And for this, he charges you an awful lot of money. And the person who instigated all of this said, I have discovered that I can make a salt day steak, including the gold and the salt and the dance for 80 bucks. And this crypto weirdo, this NFT weirdo was like, that's such right clicker mentality. What kind of flex is it for you to have made a salt-based steak at home and paid a mere $80 for it? Who will give you props when you reveal to them that the inedible heavy metals that you consumed

and then excreted into our sewer system were bought in the wholesale market rather than retail at a substantial markup from a salt dancing performance artist. And it became really clear at that point that for this person, the liquidity provision in the speculative bubble was the sweaty, insecure need to demonstrate your superior providence by setting mountains of money on fire. And if you had the mountain of money to set on fire, then providence was at work and allocated the money to you as someone of virtue. It's the kind of market tautology that rich people are rich because they're good and we know that they're good because they're rich. So the market has allocated capital to you by its invisible hand after determining through a kind of stochastic emergent process

that you are a good capital allocator. And now you will demonstrate your capital allocating acuity by buying a $1,500 gold stake from a performance artist. And if you buy the $80 stake, you are not demonstrating any kind of acuity in capital allocation, which, you know, when you put it that way, becomes pretty implausible. And yet it lays bare this contradiction at the heart of the NFT bubble. And also the kind of quiet part out loud, which is sweaty, insecure people provide liquidity into the bubble, because they want to do conspicuous consumption, so that money launderers can always unload an asset after acquiring it. Yeah, well, thanks for Yeah,

taking the time to unpack that. And I'm sorry, that was long, but it is weird. It is super weird. And yeah, no, I think it definitely warrants a longer explanation. So I appreciate that. And sticking with the article, you're right. NFTs have blown up into a massive fraud ridden speculative bubble that is blazing through whole rainforests worth of carbon while transferring billions from suckers to con artists and just one thing that strikes me as like particularly bleak and depressing about this is like it would be one thing if it was just a bunch of you know as you say like sweaty insecure

people doing their thing making themselves feel large for whatever reason. But the side of this, I don't feel like it's talked about as much as like, the carbon impact just is massive on this stuff. And it's so meaningless to begin with. And it's just so bleak to think about how, yeah, just how meaningless it is. And yet, at the the same time how much of an in just intense impact it has like just physically on the world well it's like if spotted owl omelets became a status item and everyone was flexing by like hunting endangered species to eat their eggs and then on top of it they didn't taste good right like that's kind of where where all this stuff lands because you know blockchain is like intrinsically computationally intensive by design

so the underlying security economics of the blockchain are that you have this register that's being continuously computed and recomputed by devices all around the world. And the value of all the assets that are recorded in the ledger totals up to less than 51% of all the computation work being done in any time scale. Otherwise, you can take over 51% of the computation and you can recompute the ledger and have it say, all that stuff belongs to me and so the more valuable the blockchain is the more compute work you need to do and since energy is fungible even across time scales for the most part you know for example like we have super carbon intensive processes like aluminum smelting and when there's excess capacity in in grids like or at hydroelectric facilities

people just turn on aluminum smelters because like the world needs a baseline amount of smelted aluminum and so you know just anytime you've got energy that's going to waste you can just like do aluminuming and so anything that you do that consumes a lot of energy is either consuming energy that people need right now to do what they're doing or that people will need in the future that they will bank through processes like aluminum smelting and aluminum smelting is just one example and so you know when people say cryptocurrencies are currently absorbing a hundred percent of the world's solar energy capacity and then some all the arguments that they're using renewable energy are bullshit because all that

means is that everyone who would otherwise be using solar energy is now using non-renewables, is using fossil fuels. And so it's an enormously wasteful by design process. And I'm going to channel the best arguments that the cryptocurrency weirdos make here and say what they would say if they were hearing this. And what they would say is, oh, well, that's proof of work. That's old blockchain. We've got new blockchain coming. It's proof of stake. Proof of stake, without getting into a lot of detail, proof of stake basically says if you prove that you're willing to set the world on fire by doing a lot of crypto mining,

then you're not going to have to set the world on fire. You can just promise that you would, if you were ever called upon to do it. And in addition to this being like a very abstract and weird thing, it's also a way to take the people who have the most assets and give them the most votes in the governance of this system. And so it's a way to put rich people in charge of wealth, which is very circular. And then if they're like kind of next level crypto bros, they'll say, well, we have secure computation, which I actually think is pretty cool. We have these increasingly, we have cryptographic co-processors in devices or secure areas of chips, sometimes called secure enclaves. And they can do cryptographic work that the owner of the device is not meant to be able to interfere with. Maybe they can, maybe they can't. And maybe we can do distributed computation among untrusted parties using this stuff. And there is a cryptocurrency that does this. It's called MobileCoin. I'm not convinced that it works, but if it does work, it would be really interesting.

Our previous guest, Nathan, talked a little bit about NFTs in the context of enclosures. And I just came across this pretty interesting Twitter thread a couple weeks ago. Jess from online wrote about NFTs, talking about sort of Marx's idea of primitive accumulation and the tendency of the rate of profit to fall and drawing a direct line from US imperialism to NFTs, writing, quote, Why be stuck in closing real goods? Forget intellectual property. The act of purchasing is now property. What you're purchasing with an NFT isn't a piece of art. You're purchasing ownership. And I'm kind of Yeah yeah i'm wondering what your thoughts are on that i mean i i think that's right i don't know if i would locate it in uh marx's idea of primitive accumulation that everything solid vanishes into air feels more like a um the correct marx quote here but i'm not chapter and verse on my capital i would, again, like one of the things that I wrote in my little article

is that part of the appeal of NFTs is that we do have an economy that is extremely top heavy, dominated by financial entities whose transactions are not a lot weirder than this, right? I mean, derivatives contracts, synthetic bonds, synthetic bond derivative contracts, I mean, they serve no social purpose. The people who, you know, do this stuff for a living, like if you ask them to defend the fact that they have lots of money and can buy gold stakes from performance artists, they'll say, you know, I'm doing something, something, mumble, mumble, liquidity provision, mumble, mumble. And it's, you know, incredibly implausible. They are at best, they're running a casino and at worst they're running a crooked casino for money launderers. And I think that,

when you look at like the GameStop bull run, which I think is very closely related kind of sociologically to this thing you know what you see are people who have a very clear and accurate understanding that the system is rigged and they have a kind of contradictory set of impulses that include exposing the degree to which the system is unfair, profiting by the system, you know, figuring out how to be a participant in it. I remember, I think it was Albania had a Ponzi scheme that in the post-Glasnost era that wiped out the whole country and everyone was involved in it, including the finance minister. And everybody knew it was a Ponzi scheme, but they were all in it because they figured that if everyone was in the Ponzi scheme,

then like someone would do something to make it work, right? That like they could just build an economy based on Ponzi schemes. And so, you know, when you combine the energy that gives you Beanie Baby tulip bulbs with the political moment we're living through, in which, for example, Ticketmaster Live Nation saw record share prices last year while it was illegal to hold concerts anywhere. put a couple trillion dollars into buying junk bonds from corporations and stock buybacks exceeded dividends and profits across the major indexes people saying like i think that this is a good scam that this is a scam that is for the regular people and not the fat cats you can kind of understand why they're getting in there. I think the great tragedy is that my suspicion is that the people at the top of this pyramid in this pyramid scheme are the fat cats, right? Inevitably, they are the fat cats. And so, you know, all that's happening is that they're getting into a Ponzi scheme that they think is a way to strike back at the fat cats,

and they're actually enriching the fat cats. So yeah, I'm curious, sort of as we close out here, I'm wondering, you know, sort of really broadly, and you, you've gone over this already a little bit, but what are sort of your thoughts on the future of crypto? Like one thing I've been thinking about recently a lot, a lot weirdly is that the Grimes tweet a few, I don't even guess a few months ago now talking about how the future economic system will be like founded on some kind of crypto UBI video game economy. I don't know if you're like familiar with, with that viral tweet of hers,

but it sounds insane, but also sort of this like perfect example of the benefits of of these things i'm actually writing an article right now on dao's decentralized autonomous organizations and the ways that they can actually support like worker ownership and it's like it's certainly not my wheelhouse but a lot of people that i've interviewed for the article are really sort of optimistic and see like cooperative and solidaristic and democratic values that these things potentially could have. And that, you know, they share a lot of these values with the socialist left. And yet at the same time, that sort of all has this tech utopianism, like it's like almost like naivety at times that I think about too. And a lot of it seems like

a lot of folks that are in this stuff are really just trying to make money. So yeah, I'm just curious, what are your thoughts on the sort of promise of crypto and DAOs and these sort of like decentralized technologies more generally? Well, I think there's a bunch of different issues that came up there. So I'll say that I wrote a novel called For the Win, which is about economics migrating to video games and about trade unionists organizing within video games, where the Pinkertons are like orcs who show up and shoot you with a crossbow while you're trying to organize a vote. And so it's an idea i'm certainly familiar with i think the thing about this idea that we're going to run out of work for people to do and we'll just have a ubi because we'll have fully automated luxury communism or something is a fun thought experiment it's fun to play with but the practicality is that we're going to have

to do shit like relocate every coastal city in the world 20 kilometers inland over the next 200 years right like we're not gonna have a leisure economy like maybe we will right like maybe what we'll have is the incredible coordinative power of networks that allow us to do things like be the human equivalent of those smelting plants where when there is an excess renewable that allows us to do things like be the human equivalent of those smelting plants where when there is an excess renewable that allows us to do the energy intensive elements of climate remediation we just have a jubilee right we just have a party we just like just chill out maybe you know instead of going on vacation in an airplane we go on vacation in a blimp and the blimp goes wherever the wind

current blows at that day. And then we use networks to figure out who's cool and what's cool when we get to where we're going. There's always something fun wherever you end up, right? And so we end up with a thing that's a lot more, got a lot more coordinated tissue. It's a lot less deterministic. It's a lot more probabilistic. It's a lot more surprising. It's a lot more probabilistic. It's a lot more surprising. It's a lot more serendipitous. And there is leisure, but you just don't know when you're going to have it. And it may not be at the same time as the people around you, but you can coordinate with other people. And maybe that's how we make it all work. The Soviets tried rotating weekends where everyone got a different weekend and it completely sucked because they didn't have

any coordinative technology. So you'd just be sitting around with, you know, your thumb up your ass and in the collective housing while everyone you knew was at the factory, it didn't make for a great day off, but you know, we could maybe figure that out, right? Maybe that's what the future will hold. Maybe not, but you know, that's a, that's a fun thing to play with as a thought experiment, but I don't think we're going to have UBI. I think we may have equitable, more equitable distribution, we might have a job guarantee, we might have a four day week, we might have all kinds of other things. But you know, to me, the idea of UBI is grounded in the idea that we can meet all our material needs without all of us needing to work. And I look at the inaction on climate and contemplate not just

like the infrastructural challenge of moving all the cities and land, but the humanitarian challenge of coping with hundreds of millions of climate refugees every year, and the public health challenges of new zoonotic plague outbreaks as habitat loss takes its toll, new zoonotic plague outbreaks as habitat loss takes its toll. And the emergency response to fires and floods and extreme weather events, I just think that like, it's a bizarre idea. It's like sitting after like a giant dinner party in which every plate and dish and bowl and glass in the house has been used and is piled up in the middle of your living room, you know, like with roaches crawling all over it and going, what will we do with all of our leisure

time? And, you know, as someone who's like looking at that pile and going, holy shit, it's going to take days to do the dishes. I want to turn around and go like, what leisure time are you talking about? Like, when you say leisure time, do you mean I have to do all those dishes on my own? Because you were here for the party. And so I just don't understand. Like as a thought experiment, it's great. As a plan, it's really weird and dumb. Yeah.

And was there anything you wanted to sort of add with the second half of that question in terms of like your broader thoughts on if you're like optimistic about the future on crypto for good so yeah so back to back to disc comp and distributed computing and alternatives to proof of work and you know we could have an hour-long conversation about my very complicated weird feelings about this um bruce sterling once reviewed a book of mine and said, a doctor spends most of his time making and demolishing arguments that no one else is having. And this is an area where I've had a lot of arguments with myself. So the idea that we could have devices that become the locus of trust. So rather than trusting proof of stake or proof of work, we say your device has a

cryptographic coprocessor that has signed a job. So I send your device a job and some data, so some code and some data. Your device processes the data using the code, sends me the output, and signs the output. And the signature comes from a chip that is notionally tamper-resistant, tamper-proof maybe even, and in your device, and I trust, I don't have to trust you to trust that you process the data that you say that you processed, opens up all kinds of amazing decentralized architectures for a future in which we don't have these choke points in the form of, a future in which we don't have these choke points in the form of you know half a dozen giant cloud providers and it's a lot more equitable and like it's more resistant to a lot of different kinds of of corporate and state control and i and i love the idea i do think that there is a really grave

and potentially unresolvable problem with designing computers that treat their owners as adversaries particularly as those computers become more salient because if there's a thing that your computer does that you can't tell it not to do or tell it to do a different way and then someone who has interests that are adverse to you can somehow have the ability to direct what your computer does, then if it's a computer that you really rely on, there's some really grave potential harms that could arise. Like in that arrangement, you could force me to put spyware on my computer. Say you were my boss or my abusive spouse, or you were the government of Xinjiang province and I was a Uyghur, you could force me to put spyware on my computer so you could keep tabs on me.

And anything I did to trick that spyware into making you think that it was still running and giving you a faithful rendition of my movements would immediately be visible to you. Whereas in the absence of that, it's quite possible that I could subvert the software so that I could, you would think that I was running the spyware, but I wasn't. So that's a really potentially important risk in a world in which we already have like a grossly unequal distribution of power and wealth, and in which people are already routinely put to risk by computers who betray them. I spouseware stalkerware is implicated in now the vast majority of intimate partner violence instances and so you know setting in motion a world in which

doing all the things that matter to us with computers requires that stalkerware and spouseware not be temperable be temper evident or temper proof because they use the same mechanism seems to me to be a really important risk that we should be taking into consideration and again there's only like one entity that's doing anything with this and they're a startup that hasn't launched a product and so it's not like any of this is a live issue right now. This is me having an argument with myself that no one else in the world is having. But I do really think that it presents a grave risk. As to proof of stake and proof of work, I think they're fool's errands. I think that proof of work is grossly wasteful and proof of stake reenacts the power problems that it's supposed to be doing away with.

And so neither of them seem very interesting to me. You've been listening to an Upstream conversation with Nathan Schneider and Corey Doctorow. Thank you to Buleth for the intermission music and Upstream theme music was written by Robert. Upstream is a labor of love. We distribute all of our content for free and couldn't keep things going without the support of our listeners and fans. Please visit upstreampodcast.org forward slash support to donate. And because we're fiscally sponsored

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