CleanNFTs Guest Editorial

Cheap Buildings and Good Glue

Nine frames from an anime, a hand throwing stardust
Nine frames from an anime, a hand throwing stardust

When I wrote “Credit” this past spring, it was a kind of personal quest to decipher the conversation taking place around NFTs when both hype and pushback around cryptoart was building. I saw a lot of side-taking on Twitter among the games people I follow, including mutuals. I wasn’t eager to take a side, per se, but I wanted to get closer to truths about both the crypto and games spaces, seeing as I own some cryptocurrency, have worked in games, and am interested in sustainability as a principle, so I joined the CleanNFTs Discord and started thinking about what I would contribute.

Initially I thought it would be an essay like the one you’re reading now, but a zine made more sense as a way to grip the problem in a grand, cosmological sense, with freeform juxtapositions and quotations instead of a linear beginning-to-end. I didn’t know the whole shape of what I was addressing and so had to assemble bits and pieces, and drafting this essay, I wasn’t sure I had made any progress on sorting it out further in the months that have passed since.

But then I stumbled across an analogy ripped out of the headlines: China’s Evergrande Group, the country’s second-largest real estate company, is in a debt crisis. And I thought first: “Well, real estate always has speculative booms and busts,” and then “real estate has a lot of issues with its actual product too.” And from there this essay begins.

Real estate’s name suggests what we think of it — that it’s one of the most “real” assets around; developed land has meaningful value for everyone. But a common pastime in North America is to call the actual buildings “fake” for their choices of materials and methods — especially housing like the well-known McMansion homes, and five-over-one podium apartments. This critique also extends to the interiors and furnishing being IKEA aesthetic. The most cynical take is that what we build now is just glue and plastic with a wood veneer, built to sell to unwitting buyers — “oil buildings.” As the saying goes, we don’t build ’em like we used to.

Ikea build manual and parts for Billy Bookcase

While I’m no expert, I’d like to live in a safe home like everyone else, so I’ve read up on how we do things now, and it’s a complex situation. We’re using new materials, but part of the reason why we are doing so is because the old materials — old-growth wood, lead linings and paints, asbestos, etc. — are either not sustainable at the scale we need or pose clear health risks. Further, old builds just aren’t built to the same standards.

They don’t have much in the way of sealing or insulation, so bugs and rodents come in easily, and climate control measures are inefficient, causing higher energy usage. With the new materials, we have a lot of new things to worry about too — some of these new adhesives off-gas volatile organic compounds (VOCs) — and gradual increases in insulation usage eventually caused a “mold crisis” in the early 2000’s, when new construction started to rot within a few years due to trapped moisture. These are topics still under study, with a wide variety of corrective solutions being deployed today.

But every new building comes with a question mark: were too many corners cut? Did the team do something they’ve never tried before? Is this one going to fail in five years? Two years? Tomorrow?

Our buildings did not fall out of the sky. The various incentive structures driving real estate development share some blame for why we rush into building fragile death traps, and likewise for every other product using new technology in dangerous ways. The market understands price, time, and listed features, and often demands maximizing all three while ignoring everything else. Builders try to adapt to their clients while navigating regulation, but also need to work on projects to have experience with anything new, and with all these changes in the tech, the number of options available have skyrocketed far beyond simple trial-and-error, provoking the development of an interdisciplinary “building science”.

Old rundown residential building in China

These are issues hardly unique to North American real estate. Much of the new construction in China is called “tofu dregs” because so many corners were cut to get them made, and so many of them fail not long after completion. It’s these incentives that bring our story back to Evergrande. This isn’t just a system in financial crisis, it’s a system that built things that didn’t work — in an industry with one of the biggest environmental footprints. Even if we waved a wand to control the market, we can’t just go back to the old ways because of the scalability, standards and sustainability issues — we have to do the best we can with the new stuff.

Bitcoin’s design is famously wasteful of both energy and semiconductor hardware.

And so it is with cryptocurrency. The criticisms of the crypto market hold some weight; there are a lot of crypto projects that are fundamentally illogical and “work” only on their speculative potential, going out of their way not to address anything else. Bitcoin’s design is famously wasteful of both energy and semiconductor hardware. And it’s difficult to hold cryptocurrency safely even if you grasp it on a technical level. But neither could I write off crypto very easily, since I’m also familiar with the space and the steps that drove it to the point it has reached.

So long as we have an Internet, we won’t ever be able to successfully ban the stuff. We couldn’t do it with media piracy, which was for decades distributed by people with negligible financial incentive to do so — so why in the world would you think we can accomplish it against financial protocols with a huge speculative element, designed to evade central authorities? We aren’t going back to our old-growth wood and lead paint. Someone is going to take this force of change and do something unexpected with it, so study and development of a cryptoeconomic science equivalent to building science is absolutely necessary.

What we need to build is something mixing the best of old and new materials.

I think of the underlying technologies — the distributed ledger, proofs-of-work, etc. — as glue for a financial system with very different incentives. The buildings we’re making with this tech are still mostly tofu dregs — we call them good because they haven’t failed yet, but they can be pretty rotten. You don’t want to live in a glue house, neither do you want to do all transactions on a blockchain. But the glue is very, very good, and has demonstrated some great abilities. What we need to build is something mixing the best of old and new materials.

To elaborate, I’d like to give my thoughts on what the NFT puzzle is — with respect to cryptoart — and my best answer to it. The apparent problem is that cryptoart is defined as ownership of something insubstantial: “own a JPEG” feels fake, since you can, of course, just copy the data. Except…I’ve gradually realized that there is a vast difference between different blockchains in terms of norms, to the point where they resemble different societies.

In every past market cycle, there has been a glut of new “layer 1” chains boasting new features and slick advertising. But nearly every one that has retained value beyond that cycle has also managed to accomplish something in terms of community-building and self-governance. They begin with principles about what will be valued and how the economy will reward that, and the overall value of the token over the long run does not come from how hard it got pumped, but how many people ultimately buy into those principles — how much they can be delivered upon instead of just being hot air. The principles draw in like-minded creators, those creators go on to make products, the products draw new attention, and all of the sudden a market exists. It is real.

Man looks back at camera while standing in front of a canvas painting

Most crucially, the market isn’t winner-takes-all — more than one market and one price for something can exist. If that were not the case, fiat would have crushed Bitcoin at the very beginning. It didn’t, and it has definitely tried. Fiat’s limitation is that it represents only the society of nation-states, which has never been all of human society. Fiat society, and its relatives in gold, silver, and other precious metals, is desperately concerned with self-perpetuation and control; it’s where we’ve ended up after many generations of iron-fisted powermongers desperately trying to get ahead of each other.

Other things like “meeting basic human needs” occasionally manage to carve out a little place in fiat society, but are always premised beneath the national ambitions and founding myths used to consolidate power. Most of us are now called citizens by fiat society, but act more like denizens “held hostage” by circumstance; the people that fully act like citizens and wield their rights with the most confidence are the elites. This is the society that produces the likes of Evergrande, Bear Sterns, etc. — companies that ultimately finance “fake” housing through their lending policies.

When you mint on an Ethereum cryptoart platform, what you’re actually saying is, “I want this to be recognized by Ethereum society”. It has a value on it, in Ethereum. It happens to be the case that you can trade Ethereum for fiat, and this is a great incentive when you have needs that only fiat society can service, but preceding that — and there has to be a preceding for the token to exist — the space itself, on its own terms, *just works* for you, and the token is just a way of tracking that. If it weren’t a token, it would be “exchanging favors”, a traditional but much less precise and scalable way of doing things, one which everyone has done for centuries. It works among friends and family, but breaks once the crowds get too large and unfamiliar. It’s the kind of older building material that we adore but don’t really use much of anymore.

Likewise if you’re minting on Tezos, NEAR, Waves or other chains — it’s the same, the ownership is relative to the chain you’re on, its society and value structure. What you get is the inversion of copyright: instead of threatening to jail people when they copy, they just don’t own it, and in the spaces where ownership is considered relevant(which do not have to extend everywhere as in fiat society), non-owners are shunned and ignored.

an NFT doesn’t last “forever”, it lasts as long as the community does

This limited scope of recognition is actually a feature. Owning something doesn’t have to be so important that everyone needs to respect it! Alpha Centauri doesn’t know or care how wealthy Jeff Bezos is — I can equally embrace indifference over whether or not you own a profile picture of an ape. It’s a formality to possess the token, and while everyone likes to dispense with formalities, they are the glue of society.

That means, of course, that material can be pirated across tokens(as is happening at a enormously rapid pace). But equally, it means that you have to be active in a communal sense for whatever you’re minting or collecting to be considered relevant: your work cannot “stand alone”, neither can it be “universal by decree”, it must occur within a specific tapestry. Likewise, an NFT doesn’t last “forever”, it lasts as long as the community does, and therefore, it adds a face and a voice that runs counter to the decontextualization of fiat marketplaces. If you don’t feel represented, there will be another market forming around the corner. So while we haven’t made a real science of it yet, this glue is good.

— triplefox

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About the Author

triplefox is a game developer and writer.

You can connect with triplefox on Twitter or by visiting Outer Orbit. Download a copy of Credit below:

A community for artists, collectors, and developers at the intersection of NFTs and the Environment. www.cleannfts.org