New York
THE masters of the metaverse - thousands of CryptoPunks and Bored Apes, artists and hackers, starry-eyed idealists and profit-hungry speculators - descended on Manhattan this past week, looking for a glimpse of the future.
Officially, they were here for NFT.NYC, a conference devoted to the non-fungible token, or NFT, the blockchain-based collectible that has upended the cryptocurrency and art worlds this year. The conference, now in its third year, attracted a record crowd of 5,000, plus a 3,000-person waitlist, organisers said.
By day, they went to panels with titles like Mainstreaming Blockchain Games and Fintech and NFTs: Risk and Regulation. But the real action happened at night, on the unofficial party circuit - a weeklong orgy of boom-time exuberance that some attendees jokingly referred to as "Crypto Coachella."
It was a coming-out party of sorts for the NFT community, which was born online and has only recently started to experiment with offline fun. On Sunday, the Bored Ape Yacht Club - an elite NFT clique whose members own a series of extremely expensive monkey cartoons - threw a rager on an actual yacht on the Hudson River.
On Monday (Nov 8), partyers packed into VR World in midtown for a party DJed by an NFT collector named Seedphrase, who appeared on stage in a light-up CryptoPunk helmet. And Tuesday, entrepreneurs rubbed elbows with drag queens at a downtown party hosted by Playboy to promote the magazine's new "Rabbitars" NFT collection.
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It was a more diverse group than one might think, due primarily to the presence of plenty of artists and musicians among the crypto die-hards, FOMO-stricken investors and corporate suits. Many NFT collectors know each other only from Twitter threads and Discord chats, and few use their real names or photos online, opting instead for pseudonyms and cartoon avatars. At first, they spent a lot of time figuring out who they might know as CoolCat43 or ApeChad690 and whether the guy who came dressed as CryptoPunk #3706 actually owned CryptoPunk #3706. (He did.)
They also found that not all of the customs of the online NFT world translate well to meatspace. T-shirts emblazoned with rallying cries like "Wagmi" (we're all gonna make it) drew some confused stares from passers-by. One morning, a group of NFT fans in Times Square struggled to start a chant of "gm, New York" - "gm" being the traditional Twitter greeting of the crypto-converted. By the end, even Elmo looked embarrassed.
And forget about trying to explain to the uninitiated what an NFT conference is, or why you'd fly across the country to attend one. I overheard several attempts, mostly with polite waiters and bartenders, which almost always stalled out somewhere around the word "provenance."
The real answer for some of them - "we buy digital tokens corresponding to JPEGs because digital tokens corresponding to JPEGs sometimes become incredibly valuable, and we are here because we want to figure out which digital tokens corresponding to JPEGs will become incredibly valuable next so that we can buy them and retire early" - generally raises more questions than it answers.
I'm a fan of NFTs, but in some ways, they're an odd fit for an IRL gathering. Like crypto itself, they're a purely digital phenomenon - a technology that allows people to buy and sell intangible fragments of the Internet as if they were physical objects, whether it's trading NBA highlight videos or auctioning off collections of digital art. And between the cringe factor of certain NFT subgroups and the prevalence of literal children among the NFT elite, it's a scene that could probably benefit from a little more mystique.
By Monday night, the VIPs who gathered at a reception on the roof of the Edison Hotel seemed to have worked it out. Snapping off their masks and flagging down trays of sliders and risotto balls, they caught each other up on their projects, and talked about how discovering NFTs had changed their lives.
Woodstock
Mostly, they seemed grateful to be in each other's company.
"This, to me, is Woodstock," said Kenn Bosak, a Philadelphia-based NFT collector, who had a small face tattoo that turned out, under close inspection, to be the letters N-F-T. ("I got it the day I became a millionaire," he explained.)
Woodstock - which signified the mainstream embrace of a youthful counterculture - is actually a decent comparison to a gathering like NFT.NYC, albeit on a different scale.
The crypto business is booming, with Bitcoin and Ethereum prices near all-time highs and new money arriving by the truckful. Big corporations are co-opting the language and aesthetics of crypto to market themselves to young customers, and celebrities are promoting crypto exchanges and releasing their own NFTs. And while there are still plenty of crypto sceptics, including US regulators, the industry's reputation as a haven of criminality and tax fraud is disappearing. Today, the emerging view seems to be that crypto is cool - something not even the truest believers would have argued until recently.
Much of this shift, I'd argue, is because of the crossover appeal of NFTs, which turned a thing people didn't understand (crypto) into things they did (fan merch and premium loot), and which have gotten everyone from Coca-Cola to Martha Stewart to dip their toes in. More than US$10 billion in NFTs were sold in the last quarter, a 700 per cent increase over the previous quarter's sales, according to DappRadar, a firm that tracks blockchain sales.
Growth like that screams bubble, of course, and many crypto enthusiasts will admit that the NFT market is in one. The hype around big, expensive NFTs - like Beeple's US$69 million sale earlier this year - has flooded the market with scammers and opportunists who are trying to make a quick buck.
But smart investors are not buying 7-figure JPEGs these days. In fact, many of them are looking past NFT artwork entirely, to a new and glorious future they believe the entire NFT phenomenon is ultimately pointing us towards.
This phenomenon is "Web3" (ooh, ahh), the new, flashy industry term for a new kind of decentralised Internet service that runs not on big servers owned by Silicon Valley megacorporations like Google and Facebook, but on public blockchains, with token-based reward systems that allow users to profit from their online activities.
Web3 is part of the futuristic picture that Mark Zuckerberg painted last month, when he announced that Facebook was renaming itself Meta and focusing on creating immersive digital experiences and lifelike virtual reality games. But the vision goes well beyond social media or VR. Many of today's young crypto entrepreneurs are itching to tear down the entire technological edifice of the modern world and rebuild it, piece by piece, on the blockchain.
If they succeed, your electronic health records will one day be an NFT, which you'll be able to seamlessly transport between doctors. Songs from your favourite musician? Those will be NFTs, too, perhaps attached to a smart contract that allows you to share in their future royalties. Your kid's Fortnite skins? NFTs, or something like them, and she'll be able to transfer them from game to game.
A new, blank canvas
Not much of this vision has arrived yet, but it's fun to think about. And crypto innovators are salivating over the promise of a new, blank canvas.
"This is the most excited I've been about crypto since Ethereum came out in 2015," said Fred Ehrsam, the co-founder of Paradigm, a crypto-focused investment firm. "Suddenly, the total scope of people who care about crypto has expanded by a factor of 10. It's beyond digital money and beyond a new financial system. Crypto is culture now, too."
Several tech veterans I bumped into in New York said that the Web3 frenzy reminded them of the blue-sky optimism of the late 2000s, when the founders of startups like Twitter and Foursquare ran around South By Southwest conferences throwing parties and trying to persuade investors that this "social networking" thing would take off.
The difference now, of course, is that no one needs to be convinced that crypto is a good business. It's already a trillion-dollar industry that has spawned dozens of huge companies, created dynastic wealth for early adopters, and attracted many of the best and brightest minds in Silicon Valley.
And when I looked beyond the decadence in New York, I could see strands of Web3 starting to weave themselves into things real people might want.
Crypto-club
On Monday night, for example, I went to Greenpoint, Brooklyn, to attend a party thrown by Friends With Benefits, a new kind of leaderless crypto-club known as a "decentralised autonomous organisation," or DAO. Right now, DAOs - which have been described as "group chats with bank accounts" - are mostly an experimental plaything. But optimists think they could one day be a way that businesses and communities organise themselves.
Instead of selling normal tickets to the party - which featured a performance by Russian punk-protest group Pussy Riot - Friends With Benefits required attendees to scan their crypto wallets at the door. If you owned at least 5 $FWB - the group's membership tokens, which cost about US$140 apiece as of party time - you got in. Bringing a plus-one required having 75 $FWB, or about US$10,000. (There was a way to skip the line altogether: win an auction for the party's official NFT, although that ended up selling for more than US$50,000, making it a poor choice for the budget-conscious raver.)
All of this velvet-rope exclusivity might seem at odds with the claims of crypto enthusiasts that Web3 is a democratising force that will expand access to financial services, level the playing field and get rid of legacy middlemen. And I did wonder, at times, if the Web3 kids were trying to tear down the old social hierarchy, only to replace it with a new, tokenised one where they were on top.
But the arrangement seemed to work for everyone - at least until around midnight, when the venue filled up and the $FWB token holders stuck on the sidewalk could no longer get in.
"I paid US$600 to go to this party," a man in line grumbled. "Oh well, at least the token might go up." NYTIMES
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