When the Intangible Meets the Ineffable

Revolutionary potential in the new creative economy

A digital image from Tyler Hobbs’ Incomplete Control series, minted at Bright Moments in New York last weekend, one of 100 images that pre-sold for roughly $400,000 worth of Ether.

The other day, a friend invited me to Incomplete Control, a NFT art exhibit at a pop-up gallery, Bright Moments, on Wooster Street  in SoHo. Initially, it was difficult to get into the gallery due to intense security at the door, even though the gallery inside was not crowded and the attendees were quite low key. Once inside, I learned that such security was considered necessary due to the enormous sums being exchanged. 

This exhibit was both a shock and revelation for me. As I will document in this essay, my thinking around this area is changing quickly – and it may continue to change. After this exhibit, I spent most of the week studying what is happening with NFTs and related areas, particularly DAOs (Distributed Autonomous Organizations). I now realize it is important to engage with this area, explore, experiment, and iterate with it, despite the embarrassing level of hype. The new web3.0 tools and platforms are fundamentally changing the opportunities for funding all kinds of creative work – including challenging, difficult, and experimental projects that no longer fit within the old corporate publishing structures and commercial art markets.

At Bright Moments, the artist, Tyler Hobbs, a 27-year-old programmer from the West Coast used algorithms to produce “generative art.” Each night over the course of four nights, he was “minting” 25 new NFTs that collectors from the crypto community had bought in advance. The work was generated during the exhibit, as a jazz band played and the audience snacked on sushi that a sushi chef was making on the spot. The collectors and the artist saw the new works appear at the exact same time, on wall displays around the gallery, greeting each one with muted applause. 

Hobbs’ 100 collectors paid an amount in Ether equivalent to $400,000 in US fiat for one of his images, which they bought in advance, sight unseen. In other words, the exhibit generated a minimum of $40 million during the four days of the sale. However, according to a woman working in the gallery, the entire revenue of the pop up exhibit was closer to $100 million (one of Hobbs’ previous series, Fidenza, sold for $3.3 million, making it one of the top NFTs so far). This makes Incomplete Control among the most successful contemporary art exhibits in history. Yet there was no mainstream press about it. Neither The New York Times nor New York Magazine, not even ArtForum was covering it. It existed in its own crypto bubble. 

A painting from the late 1990s by Peter Pinchbeck, my father

The Bright Moments exhibit took place a few blocks from my father’s loft on Greene and Spring, where he had lived and worked from 1970 to his death in 2000. My father was an abstract painter and sculptor who never “made it” in the art world – in fact, if anything, he actively avoided taking steps that might lead to commercial success. Because of the rent control rules in SoHo, he was able to hold onto his loft at far below market price until the end of his life. He eked out a living as an adjunct professor at Manhattan Community College, making around $15,000 a year. This precarious situation allowed him to spend most of his time focused on painting, which was all he wanted to do. He was part of a group of third generation Abstract Expressionist painters whose earnest approach to art – their staunch belief in art’s transcendent qualities – didn’t mesh with the more ironic era of Pop and Conceptualism.

I moved with my mother to the Upper West Side in the early 1970s, but visited my father every few weeks. I saw SoHo transform over time. I remember the 1980s art world, when Jean-Michel Basquiat, Keith Haring, Julian Schnabel, and Barbara Kruger were superstars. At that time, the art world was all about the scene – parties, openings, hot restaurants, celebrities, Wall Street tycoons. I re-read ‘New Art, New Money,’ a profile of the young Basquiat from the 1985 New York Times, to bring that moment back. At 24, Basquiat’s paintings sold for $10 - 25,000. The figure seemed extravagant at the time. 

The success of the 1980s New York art world was directly linked to financial innovations on Wall Street. It was the “go go” era of currency speculation, hedge funds and junk bonds. As the US economy became increasingly financialized, elite workers in the financial markets made enormous profits. The rebellious, neo-punk individualism that characterized Wall Street and Hollywood success was reflected by the attitudinal stars of the art world. Schnabel made gigantic paintings weighed down with crockery that might break, sending plates cascading to the floor. Collectors signaled their own privilege and power by buying this kind of work, and in return they got to be part of an elitist scene. 

In his opening speech before the NFTs were minted, the director of Bright Moments mentioned that Hobbs’ work followed in the tradition of artists like Cy Twombly, John Cage, and Agnes Martin, As art dealers will do, he justified the exhibit by giving it an art historical pedigree. I am not sure if the buyers see themselves as contributing to art history in particular. Yet they are confident they are riding an important historical wave. You don’t spend such a fortune on a JPEG unless you have good reason to believe that your digital artifact will increase in value. 

A snapshot of Tyler Hobbs at Bright Moments

However I wouldn’t say the aesthetic of the work was meaningless. I have been thinking about the suddenly iconic images from the algorithmically generated NFT series such as Cryptopunks and Bored Ape Yacht Club, where each piece is valued at hundreds of thousands or millions of dollars’ worth of Ether. The images convey deeper levels of semiotic meaning and social code. The gesture is sarcastic, expressing individualistic punk rebellion and casual disdain for traditional art criteria. CryptoPunks and the Bored Ape Yacht Club were limited to 10,000 algorithimically generated images. Owning a Cryptopunk or Bored Ape signals your membership in an elite club— made of those who got in early with Ether, reaping a fortune as that cryptocurrency exploded in value. 

From my perspective, the Bright Moments exhibit was a complex social ritual – a kind of religious rite – centered around value creation and value exchange. This new form of expression does have a link to the history of modern art, which is always meshed with technological and financial innovation. To me, it almost feels as if the new creative world of crypto investment and decentralized finance needs to recognize and incorporate the mimetic structure of the art world, on its way to something else. What that “something else” is, isn’t clear as of yet.

The success of Wall Street in the 1980s was based on the use of sophisticated computer programs for day trading and predictions. With the developments in Ethereum and the blockchain world, we are seeing code assimilate finance, just as the NFT world is assimilating and transforming artistic production. The leaders in the crypto space are engineers who deify code and have a perhaps feckless belief (time will tell) that trustless, permissionless, decentralized systems can solve all of our messy human predicaments. Hobbs’ work simulates arbitrary human choice and resembles past avant-garde expressions, but is code-generated. Hence, a bit like a piece of software, he occupies a logical place in a signifying chain – the right place at the right moment. 

Visual images – no matter how intangible – maintain a necessary totemic and fetishistic function in human society. Hobbs’ work fulfills a function in a larger system — the Ethereum ecosystem — as its stakeholders assign, define, and circulate value. There are something like 119 million Ether currently in circulation. Because of the scaling issues that Ethereum has still not managed to resolve, the functional utility of Ether remains limited. 

A few years ago, an earlier wave of digital collectibles, Cryptokitties, broke the Ethereum blockchain, which even now can only handle something like 30 transactions per second. Even so, Cryptokitties revealed a use-case for Ethereum, which the recent explosive NFT boom has capitalized on. NFT art provides a type of asset which allows holders of large amounts of Ether to diversify their portfolio while still avoiding the fiat currency system and its taxes. So that is one piece of the puzzle. The flashy success of NFTs provides a marketing bonanza for the blockchain world, causing the tokens to increase in value.

I find some of Brett Scott’s ideas about Bitcoin (and, by extension, other cryptos) compelling. The author of The Heretic’s Guide to Global Finance, Scott has argued that these crypto currencies are not really similar to traditional money. Karl Marx defined money as a “universal equivalent.” (About money, Marx also wrote: “Money is the universal self-established value of all things. It has, therefore, robbed the whole world – both the world of men and nature – of its specific value. Money is the estranged essence of man’s work and man’s existence, and this alien essence dominates him, and he worships it.”) Scott defines Bitcoins and other crypto-tokens as “counter-trade objects with money-like branding.” Their fluctuating value still depends on “the universal equivalent.” Exchanging a significant amount of Ether for a JPEG registered on the blockchain — with no other legal ownership rights — qualifies as a type of “counter-trade.” 

Artblocks.io is a platform for “generative art” sold as NFTs. These images come from https://steganon.com/autology.html .

While I still struggle to grasp the stratospheric value ascribed to Hobbs’ particular project, his exhibit forced me to see the incredible potential that NFTs hold for the future of creative work. NFTs offer a new collaborative mechanism for funding cultural production. This is a quantum leap beyond Kickstarter and other crowdfunding platforms. As an artist, you can define parameters around distribution, revenue, and other forms of community participation, using smart contracts. For instance, you can assign yourself a share of royalties, in the case of subsequent resales, or split royalties on future sales with collaborators. If you have an audience, you can market to them directly without needing the mediation of an agent, gallery or publisher. 

As an early example, author Emily Siegel conducted a crowdfunding presale for her next science fiction book on Mirror, a new blockchain-based authoring platform. Those who invested in the project gain a royalty stake in her future novel. The success of the sale (she raised nearly $100,000 worth of Ether) provided her the financial resources to write the book. Unlike Hobbs’ stratospheric  financial reward, this seems like a reasonable value proposition, particularly for those who are fans of the author. They get to tangibly support the creation of her book and, also, they participate in monetary reward if it succeeds commercially. 

I intend to experiment with this myself. In this newsletter, I will explore how I want to approach this over the next few months, and invite you to participate, if you want. What seems clear is that these tools can help to unlock human creativity on a large scale, and this is just the early stages. It doesn’t matter that a lot of the current output is contrived, shallow or scammy – it doesn’t invalidate the enterprise as a whole. 

For creators who want to play in this new arena, the idea of creativity must shift a little to encompass the financial mechanisms and community coordination aspects of creative projects. I can see why major investors in this space, such as Kevin Rose, believe that the artist and entrepreneur are merging into one. Most artists I know — myself included — do not want to be bothered with the technical aspects of something like crypto trading.

I often remember another idea from Marx, who wrote that The Declaration of Independence made a mistake because it gave us the wrong freedoms: For example, we should have been freed from trade, rather than given freedom to trade. I would still prefer freedom from trade. But this is where we are right now.

A crucial, nagging question for me is how this evolution in tools for artistic / entrepreneurial co-creation can help to address the biospheric emergency we are facing collectively, as well as the slide toward authoritarian and technocratic forms of control. I don’t have an answer for that today, but I am bookmarking it. 

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