With the news that Justin Bieber paid a huge amount of money for a boring ape yacht club ape adding to the growing list of celebrity owners, many are beginning to wonder what the point of this is. These celebrities aren't buying for investment, and it's doubtful that Eminem or Snoop Dogg will make a splash at BAYC's exclusive party. So, why are apes so popular among the elite?
NFTs seem to position themselves as a "must have" commodity, used as a "PFP" for those investing in cryptocurrencies (file photo). They mean two things – wealth and a commitment to blockchain technology. Ultimately, they are a status item.
Of course, that's all there is to NFT for now. With the introduction of wallet support on Twitter, users of the "Twitter Blue" service can now choose NFT for their avatar images and even change the shape of their avatar from a circle to a hexagon. A general distaste for the dear blockchain has spawned software that will automatically mute users using the NFT incarnation. To say that NFT is divisive is an understatement.
These images are a display of status, similar to a Rolex or a Mercedes. In the 1980s, celebrities were wearing gold rope chains; the '90s came and everyone was investing in cars; at the turn of the millennium, it was all diamonds and champagne. Now, in 2022, the epitome of public wealth is the image of an ape or a punk. To give you an idea of the value of the "must have" Ape: Ape #232 was sold on February 1st for 1080 ETH and at press time was exchanged for $2,850,000.
Twitter took this initiative and celebrities bought in at crazy prices, proving that many people think NFT's functionality doesn't exist outside of JPEG or PNG files. Owning a BAYC ape has become a point of pride, much like owning a Warhol, except this art can be used as a Twitter avatar. The ape craze is so big that there are thousands of them scattered all over the Internet. Of course, only a few are actually legal.
A cursor tour of OpenSea, the leading NFT marketplace, shows that they not only mimic their accounts and images, but are generally fascinated by the use of apes as the core of their products. Some defined the movement, others wanted to replicate and sweep away the debris. Some blatantly parodied the BAYC series, with artists putting their spin on the concept, and even pixel art apes. Space Ape, Gambling Ape, Chibi Ape.
The first NFT to really pave the way for how we see them now was Larva Labs designers John Watkinson and Matt Hall's Cryptopunk line; followed closely by Bored Ape Yacht Club's (BAYC) pseudonymous designers Gargamel, Gordon Goner, Emperor Tomato Ketchup and No Sass. Emperor Tomato Ketchup and No Sass. These two projects alone generated profits of approximately $2.09 billion and $1.9 billion, respectively.
It's hard to really pinpoint exactly where these two projects were so huge, but it's easy to say that these images became symbols of underground clubs and exclusive access. This is appealing to many people. Given that celebrities like Steph Curry and Neymar Jr. have recently purchased BAYC apes, it suggests that these images have power and influence. Ultimately, these celebrities are two of the most well-known in their respective fields, so why would they purchase apes if not out of a simple desire and want to show influence?
So far, the desire to imitate has fueled the NFT craze. Proposed by social science philosopher René Girard, the desire to imitate is the philosophy that humans naturally desire what others desire.
"Man is a creature who does not know what he wants, and in order to make up his mind, he turns to others. We desire what others desire, because we imitate their desire."
The desire to emulate has always existed, as long as humans have. The initial separation of class and status fueled this desire, as the lower classes began to desire the status of the rich. Many of us believe that our desire to own a particular thing is a conscious decision. We wake up one day and decide "I'm going to buy a PlayStation 5". In most cases, this impulse comes from people around us showing off their own PlayStation 5, or it being shown as the privilege of owning a PlayStation.
This is seen when there is a shortage of physical stock and everyone seems to be trying to acquire the product. This further drives desire, as does any limited edition item that can be collected. The rarer the item, the greater the drive for desire.
Image from Shutterstock-mkfilm
We first started to see the concept in modern society with the iPhone. Initially there was a somewhat negative view of Apple products and few people thought that combining a phone with an MP3 player would take the world by storm. Then along came the App Store and podcasts, and suddenly everyone wanted one. Your friend at the bar who bought it early showed you that game, you threw the paper ball in the office garbage can, and suddenly you had an itch.
The iPhone craze was born out of simple human desire. Sure, they were elaborate phones that looked a bit futuristic for their time, but the phone became a status symbol. An expensive status symbol, one that was so widely known. The fad continues today, with teens and children desperate for the latest phones to fit their peers.
The desire to emulate is the key to Web3 adoption. When the first iteration of the Internet was introduced, many people were indifferent. Before it became a way to shop, it was a tool to find information. When Web2 was introduced, its social networking and video content made our desire to do so grow. We didn't want to be the only people in our friendship group who didn't have a Facebook account. These social apps are perfect for our shiny new iPhone.
But desire only lasts so long. There comes a point where we get what we want and grow from it. Usually, with any material object, this isn't a big deal. You decide to switch from an iPhone to a Samsung Galaxy, you can sell it on your old phone or trade it in for some store credit. After all, there will always be someone who desires what you have. But does this apply to NFT?
Image from Shutterstock-mokjc
Obviously, there are buyers in the market for NFT at the moment. Many NFTs change hands several times before finding a stable home, but what happens once the market calms down or apes become obsolete? What are you left with when the floor price drops and the cryptocurrency market plummets?
Art will always have a place in the NFT space, especially when established artists enter the field and emulate what Beeple achieved at Christie's when he sold for $69 million. Even Damien Hirst has joined the fray. However, as desire, or in this case hype, subsides, the field will shrink and evolve into something entirely different.
This is where NFT needs to start demonstrating utility to owners. The NFT can't just be an NFT, it has to have something attached to it. This could be a membership to a club, or a reward for keeping NFT in your digital currency bag, which could be a small souvenir from that convention you attended. Because really, NFT is more than just art or images.
Utility NFT can help with everything from city governance to insurance and weather forecasting. The future of NFTs looks very different than it does today. They may still be images, but those images will contain physical objects or smart contracts for businesses, thus providing more investment for owners.
This is where the debate about digital ownership needs to become more outspoken. It's great to own a piece of art, but physical art retains its value because of its appreciation and prestige. What would an NFT holder do if the artwork rapidly depreciated in value or lost escrow? Without prestige, collectability or utility, it is effectively just a JPEG.