11 / 03 / 2021

People Who Need Beeple (Or Now Where’d I Put That Non-Fungible Token?)

In 1917, artist Marcel Duchamp submitted a sculpture to a New York exhibition that was nothing more than a porcelain urinal turned upside down, a work that was intended as both art and anti-art. Eventually, it came to be recognized as an iconic piece of 21st century art. In 2021, the auction of a totally digital piece of art has people wondering whether it might represent a similar turning point. Or could it be that, like so many buzzy ideas that come through the door these days, when you scratch below the surface, there’s really nothing there?

Carey Smith | Founding Contrarian

The whole story of Christie’s cryptocurrency auction of a purely digital artwork is somewhat mind-boggling: Is this the wave of the future or merely a very expensive flash in the pan?

It’s impossible to know whether the guy whose work was sold — he goes by Beeple, or @beeple_crap on Instagram, his virtual home — is an artistic genius or merely a hack who’s successfully combined a schoolboy’s artistic sensibilities with advanced computer skills. Either way, his work obviously appeals to people who yearn to be early adopters and have bitcoin to burn, since the final purchase price was a mind-boggling $69.3 million, a figure that rose by more than $50 million in the last half-hour of the sale.

Whoever holds the winning bid on this collage receives a non-fungible token, the digital equivalent, I guess, of a certificate of authenticity from the Franklin Mint, only much more costly, at the moment, anyway. It will be interesting to see what that’s worth in 50 years, if anybody can find it.

Is there anything of real value in the piece — or the non-fungible token? Is there really any there there, or is it just bitcoin buzz with some fancy graphics attached? Who knows? It was interesting that even Christie’s dodged the question by refusing to put an estimate on it beforehand. But as a wise man once said, when you’re hot, you’re hot. 

The whole thing reminds me of what we’re seeing more and more of at Unorthodox Ventures: People take something ordinary — vending machines, for example — and sprinkle some AI or blockchain on top and claim it’s exciting and so much better — even, dare I say, disruptive — when really it’s the same old machine. Often they find someone willing to invest. But to paraphrase Bob Dylan — It Ain’t Us, Babe. We’re looking to invest in ideas with real value, and we know them when we see them — and when we don’t.

For all the question marks surrounding it, the Christie’s auction is a good thing, even if the art itself isn’t worth it. Obviously, Christie’s was trying to catch a wave and see how far it took them. They got a far better ride than they expected, and tons of press, which played no small role in the outcome. 

So what if Beeple turns out to be a one-hit wonder, whose value plummets like the emperor’s new clothes after it’s pointed out that there’s really nothing there? What it all adds up to is a transfer of wealth from those who have more of it to those who have less. That’s a good thing. Christie’s gets their cut, and the minions working there can eat out on it for months, which helps the restaurants that have taken a hit over the past year. Beeple gets his share, too, and it ain’t chicken feed. Maybe he’ll buy a new car — or three — or maybe he’ll hire a local contractor to put an addition on his house, including a bathroom with a fancy urinal, or better yet, a bidet. With the money he made, he can have both. Heck, he can build himself a whole subdivision and employ hundreds.

What happened with the Christie’s auction is no different than what happens every day in the venture capital world: Investors with more money than they know what to do with dole out millions to entrepreneurs who then hire people they think can help them realize their dreams — or at least take their money. Because they’re inexperienced, they may not hire the right people, and the money may not be well-spent, but at least it’s not sitting in a vault. In their own inimitable way, investors, whether they’re investing in art or a nifty idea, are just spreading the wealth. And looking at it that way, it’s a good thing.