This blog post expands on an initial Linkedin post (2021) about two academic papers on NFT cryptocurrencies and ownership. After the FTX scandal and the Trump trading cards, I needed to unpack my previous post.
In this post, I want to explore how, behind the narrative of technological revolution, democratization, trust and equality, NFTs actually serve to amplify and reinforce the commodification, financialization, speculation, and concentration of wealth at the heart of neoliberal economics.
A new chapter in the digital revolution
NFTs have gained significant attention and buzz in recent years. There have been many claims about their many revolutionary potentials. For example, NFTs could revolutionize how we think about ownership and authenticity in the digital world. According to a report by the World Economic Forum, NFTs can help establish provenance and ownership for digital assets, leading to a “revolution in digital trust.”
NFTs have also been promoted as a way to democratize access to art and other cultural artefacts. By making it possible to quickly and securely buy and sell digital art, NFTs could make it easier for artists and collectors to connect, potentially leading to a broader range of art being available to a wider audience.
NFTs have also been promoted as a way to change the way we think about intellectual property. By making it possible to easily and securely license and sell digital content, NFTs could create new opportunities for creators to monetize their work, potentially leading to more innovation and creativity in the digital realm.
But behind the shiny, solutionist stories surrounding NFTs, a radically different reality is at play. A capitalism on digital steroids with an endless appetite to commodify, financialize and extract profits from society while centralizing wealth above to just a few.
Capitalism on steroids
NFTs allow the commodification of anything such as art and collectibles, turning them into unique, one-of-a-kind items that can be bought and sold on the market. This commodification transforms any object or asset into commodities and places a financial value on them determined by the market.
According to Marxist theory, the concept of commodity refers to something that is produced and traded in a capitalist system. In contrast to its business usage, Marx viewed the commodity as a central element of capitalism and a starting point for analyzing this type of politico-economic system. He also critiqued the negative social consequences of commodification, including commodity fetishism and alienation.
Before an object becomes a commodity, it has a specific use value for an individual. However, once it is transformed into a commodity, it acquires a different value – the price at which it can be exchanged for another commodity. Marx believed that this new value was based on the time and labor required to produce the good, and other factors such as morality, environmental impact, and aesthetics were irrelevant.
Karl Marx claimed that everything would eventually be commodified:
“the things which until then had been communicated, but never exchanged, given, but never sold, acquired, but never bought – virtue, love, conscience – all at last enter into commerce.”
The commodification of everything, here using NFTs, can be seen as an expression of the ideology at the heart of capitalism. The transformation of all aspects of life into commodities that can be bought and sold on the market. An ideology where anything and everything within the system is valued according to its potential for generating profit.
This logic is at the heart of neoliberalism, well known for outsourcing government functions to private corporations, selling public assets to private investors, and substituting public services with user fees and market-based mechanisms. Methodically, this process leads to the commercialization of essential services such as healthcare, education, and social welfare, which are no longer treated as universal rights but rather as commodities that can be bought and sold on the market.
In video games
An excellent example of this dynamic at play is in video games, where NFTs represent in-game items such as weapons, armour, or virtual real estate, which can be bought and sold on the open market based on supply and demand. One major criticism of this model is that it prioritizes monetization over gameplay, incentivizing players to turn their leisure activity into a source of income.
This can lead to the emergence of “gold farmers,” who play games specifically to acquire valuable items to sell and can create an atmosphere of exclusivity where only those who can afford expensive NFT items can fully participate. This divides players into “haves” and “have-nots,” with those unable to afford NFT items feeling left out or disadvantaged.
The NFT dynamic entrenches the capitalist system and reinforces the dominance of the market deeper in all other aspects of life, even digital. The hype and buzz surrounding NFTs often serve to obscure the underlying capitalist logic at play and present NFTs as a revolutionary and innovative solution to all kinds of problems.
It actually reinforces and amplifies the idea that the market and profit-seeking should be the primary organizing principle of society rather than the collective good and social wellbeing.
Mystification lies at the core of capitalism’s operations, obscuring its true nature and perpetuating a distorted reality. Capitalism employs various strategies of mystification to conceal its inherent inequalities, exploitation, and destructive practices.
For example, within the discourse surrounding Non-Fungible Tokens (NFTs), capitalism employs mystification to present these technologies as empowering and democratizing. This narrative masks the underlying inequalities and reinforces neoliberal and capitalistic values. By emphasizing inclusivity and accessibility, capitalism mystifies the concentration of wealth and power that often accompanies the use of NFTs.
The sharing economy
Another instance of mystification can be seen in the term “sharing economy.” This phrase creates a perception of collaboration, reciprocity, and mutual benefit, suggesting that platforms like Uber, Airbnb, and Tinder facilitate resource-sharing and community building. However, beneath the surface, the reality of these platforms diverges from the idyllic image conveyed by the term “sharing economy.”
In truth, platforms operating within the so-called sharing economy function as profit-driven businesses that commodify various aspects of life, including transportation, housing, and relationships. Uber, for example, enables individuals to provide transportation services for a fee, while Airbnb allows individuals to rent out their properties to travelers. These platforms facilitate exchanges that generate financial profit, often extracting a commission or fee for their services.
The mystification of the sharing economy obscures the exploitative practices, unequal power dynamics, and financialization that underlie these platforms. It masks the fact that the purported “sharing” is governed by market forces and profit motives rather than genuine acts of collaboration or mutual aid. Instead of fostering community and equitable resource distribution, these platforms contribute to the commodification of previously non-commercial aspects of life.
Moreover, the mystification within capitalism extends to the unequal distribution of risks. While platforms like Uber and Airbnb primarily function as intermediaries, facilitating transactions between users, it is the individuals who bear the economic risks associated with participating in these platforms. Individuals provide their own assets, such as vehicles or properties, and assume the responsibility for maintenance, insurance, and potential financial losses. The illusion of fairness and cooperation perpetuated by capitalism deflects attention from the systemic inequities inherent in this arrangement, where individuals shoulder the burdens and uncertainties while the platforms themselves minimize their own risk exposure.
Centralization of wealth
Beyond the reality of commodification and financialization at play with NFT, another aspect perfectly fits capitalism. Indeed, despite a narrative of equal and democratized access to opportunities, the reality of the wealth of NFT markets remains highly centralized and unequal.
At the time of the research (2021), an analysis of over 6 million NFT trades similarly showed that a small group of people are at the centre of the market, with the top 10% of traders accounting for a staggering 85% of all transactions. This same group also trades at least 97% of all assets. In other words, a select few drive most activity in the NFT market. Also, 10% of NFT buyer/seller pairs have the same volume as the remaining 90%. It suggests that a small group of players is dominating the market and likely reaping most of the profits.
A commodified future
Unless we deeply re-engineer our economic system, we will continue to head towards a world where everything is for sale and commodified. In this world, all aspects of life are transformed into merchandise that can be bought and sold on markets. It includes traditional economic sectors such as manufacturing and agriculture and intangible things such as art, culture, human labour and relationships.
This world of commodification is driven by a proliferation of consumer culture, where everything is reduced to a commodity to be consumed and discarded—leading to the speculation of these assets as individuals seek to make a profit based on fluctuations in their price. In this world, the value of something would no longer be determined by its intrinsic qualities or contribution to the common good but rather by its volatile market value and ability to generate profit.
In such a dominant economic reality, the market also mediates social relations, and people primarily interact with each other through commercial exchange. It involves the buying and selling of goods and services, as well as the trading of favours and resources.
Rejecting the NFT Narrative
NFTs serve to amplify and reinforce the commodification, financialization, speculation and concentration of wealth that are at the heart of neoliberal economics. Behind the narrative of technological revolution, democratization and equality, NFTs represent a new chapter in the ongoing process of commodification and financialisation of all aspects of life.
Unless we critically examine these discourses, we risk falling into the trap of hegemonic power structures and perpetuating destructive systems that threaten and exploit life on our planet.
Indeed, the hype and buzz surrounding NFTs obscure the deeper reality of a renewed capitalism on steroids, empowered by digital technologies where everything is up for grabs. A reality where the endless appetite to commodify and extract profits from the world is fueled by a performative discourse that hides its structural need for social inequalities and exploitation.
To avoid this future, we must deeply re-engineer the economic system to prioritize values such as sustainability, equality, and the common good over the pursuit of profit and the commodification of all aspects of life. It will require significant changes to how we think about and organize our economy and will require collective action, courage and solidarity to bring about these changes.
Blockchain analysis of the Bitcoin market by finance professors Antoinette Schoar at MIT Sloan School of Management and Igor Makarov at the London School of Economics