NFTs, Tech Bros, and a Capitalistic Nightmare

22 Mar 2021

The year is 2021. Recent advances in tech have given rise to manifold increases in productivity and have driven the stock market since the turn of the millennium. And yet, the divide between the rich and poor has never been more damning, especially when viewed through the bleak scenes of a pandemic. This is nothing new. It was Marx who elegantly laid out this observation in the backdrop of the industrial revolution.

If capital grows rapidly, wages may rise, but the profit of capital rises disproportionately faster. The material position of the worker has improved but at the cost of his social position. The social chasm that separates him from the capitalist has widened.
— Karl Marx, Wage Labour and Capital

Disruption or Deregulation?

We should adopt a similar Marxist analysis for recent technological advances. Sure, the disruptions in e-commerce, taxi services, and the service industry through the likes of Amazon, Uber, and Doordash have made things more convenient for the end-user; but it has come at the cost of massive deregulation, anti-competitive practices, and stripping down of labor laws. Most often, these disruptions occur in domains that need nothing of the sort, being a coded term that “Tech Bros” adopt to implement their latest tech fad and raise funding before they bail out of the idea altogether.

The idea of missing the next disruption event and its subsequent riches has spawned a horde of cash-strapped individuals who hop on with investments onto any new trend. These communities house a smattering of well-informed but malicious grifters who drive the seemingly “organic” mania. Never has this been more apparent in recent years than in the NFT or “non-fungible token” conundrum seen throughout the past week.

Ctrl+C, Ctrl+V

NFTs introduce artificial scarcity to digital assets by encoding data onto a blockchain such as Bitcoin or Ethereum, which proves ownership of a digital asset. Methods of this effect have been around for ages, whether by stamping files with checksums/hashes or publishers enforcing DRM to their movies, games, books, etc. The hype around NFTs particularly peaked of late since its proximity to Bitcoin and cryptocurrency. The same circle of investors/grifters can be found in both, primarily as a means to inflate the value of the base cryptocurrency. Bitcoin and NFTs in their current form have no real value except to a handful of people in very specific use-cases; everything else is just built on the foundations of speculation.

But what’s new and alarming about NFTs is the ramifications of such a system and what it means for digital goods as a whole. By using NFTs to stamp an asset as “unique”, we are effectively creating an artificial scarcity. The whole beauty of digital goods lies in their ability to be prototyped and developed once and then endlessly re-produced at no additional cost. This essential feature is one of the main reasons why tech companies have massive profit margins and roost their listings on the top of the stock exchange.

This feature of digital assets has long been at the mercy of corporations who seek to leverage the aforementioned ease of reproduction of goods while forcing the user to pay exorbitantly for their services. This allows for a corporation to hire a small team of developers to produce an app or a game but still keep the cost of a single copy or license of such software at hundreds of dollars; in turn, producing millions or even billions of dollars in profit— exploiting both their users and their employees all the same.

The logical outcome of such a feature of digital goods would be providing benefits at a nominal cost to the user. Still, such a product would not be possible under capitalism. This illustrates how technology doesn’t exist in a vacuum; it is weaponized to provide value for the ruling class under the current mode of production, i.e., the capitalists. Tech companies and particularly game manufacturers have long been trying to introduce scarcity through capping licenses for a game or software to a single machine. Even more nefarious are systems like DRM, which require a constant connection to the manufacturer’s server to validate the user— effectively eliminating the concept of lending games to friends or reselling used games. With the aid of tools like NFTs, and the enthusiastic support surround them, companies can accelerate this long-desired fantasy of introducing non-existent scarcity to increase demand.

Like Ponzi, Like Madoff

The get-rich-quick aspect of NFTs is pretty much a Ponzi scheme on top of another one, covered in a trenchcoat. In the past week, digital art such as Beeple’s The First 5000 Days (which sold for $69 million in a Christie’s auction) has been making headlines. Online NFT marketplaces are awash with “investors” dumping cash into assets, from NBA highlight clips and gifs of tacos to abstract art and digital shoe designs. The catch is that once bought; there is virtually no difference between the files you paid for and the ones available elsewhere on the internet. You essentially pay to say a copy of a digital asset belongs to you, even though there is no real version of any digital asset; all of them are just “copies.” But why would you want to do that? Exactly, you wouldn’t, unless you knew that you could double your investment within the next week by selling it off to the next poor sod. At the time of article this article, the buyer of Beeple’s $69 million art piece has been confirmed to be Vignesh Sundaresan, the founder of many crypto-related startups who would gain a lot from inflating the crypto market, which is heavily linked to the NFT scene. He has also revealed his interest in funding pro-NFT media campaigns.

The NFT marketplace right now is where the amalgamation of the high-brow art scene, investors looking to make a quick buck, and tech companies catering to this hype come together to accelerate the commodification of art and the glorification of private property.

Where to next?

These events spell out that tech has no humanity; it is just another arm of capitalism. Advances in tech do not necessarily mean better living conditions for the average person; in fact, we can observe that the case has almost always been the opposite.

With an economy flushed with cash from stimulus packages and high-income individuals more likely to impulse buy stocks like Gamestop based on memes, drop millions on Pokemon cards, and cryptocurrencies. It is high time that the professional-managerial class that sits around in their Discord channels and subreddits discussing where to invest next grows a conscience. This is nigh impossible without a sense of class solidarity and no organized labor movements to speak of.

But consumer side activism never works as evident in the tech space through observing grassroots alternatives like open-source technologies. There is no open-source project that has been widely adopted thus far without the backing of corporates, who, with the aid of such technology, further their profits and only contribute back to these source projects under strict regulation of licenses like GNU GPL. Nevertheless, such projects are necessary as intermediaries under the current system to act as the foundation from which potential socialist technology solutions can draw their framework, ideology, and code of conduct.

Governments should start regulating tech companies and not cower down to nor be in cahoots with them like when Elon Musk was allowed to reopen his Tesla factory in California in the middle of a pandemic (which subsequently led to a coronavirus hotspot) or when Obama’s FTC let Google off the hook after an anti-trust investigation, much to the chagrin of Silicon Valley lawyers. Employees in such tech and tech-adjacent companies should realize their own value by forming labor organizations and unions; without such measures, a call for accountability could be quickly silenced, with whole teams being axed for speaking up about the ethics of the products they’re developing.

But for now, as new tech trends fade in and out over the years, the ordinary person will never have their life improved more than a marginal amount by technological advancements. The only advances that will ever trickle down to them would be just enough to keep them content and to keep them working on and on.