Published in Etherscan Blog by Takens Theorem

I confess a love of non-fungible tokens (NFTs). I can recall my first purchase years ago. When you appreciate blockchain ledgers, you quickly appreciate the idea of non-fungible provenance, a sense of owning a little slice of a new digital reality — and the capacity to prove that ownership, engage with it, trade it, program over it, and more.

This post is unabashed boosterism for this type of data. NFTs are, after all, just a data type. It is a way of assigning some information to some cryptographically signable public key. Despite the controversy around NFTs as mere “pointers to URLs,” they can be much more than this.

The goal of this post is to argue that NFTs are a unique kind of asset. I revisit some ideas many have raised before, but I focus on one that’s always intrigued me: NFT projects have a latent potential. They can lie in wait on the chain, even if they are not noticed for a time. This can give NFTs special powers afforded by their technical details and the ledger on which they reside; this power can be exercised across remote stretches of time.

NFTs ≠ Beanie Babies

Some have remarked on the similarities between NFTs and Beanie Babies. One cannot deny some parallels — a niche interest to a mania and price swings and more.

But NFTs are very much not like Beanie Babies, too.

They differ in several important ways.

For one, the market for NFTs is global, constant, and instant. Trustless computation on programmable blockchain yields automatic markets, too. You don’t have to trust your buyer at all, so long as you trust the mechanisms in place for computing the sale. And sales have, in most cases, immediate effect.

Second, some NFTs, especially those on chain, live forever. They do not degrade. They are ever in mint condition, recoverable, and programmable.

For example, the “Witness the Draft” project by Simon de la Rouviere is a chorus of eyes from an on-chain asset that marks its maker’s creative progress. Collectors can interact with the blockchain and open and close these eyes, altering their piece and those of others as much as they like forever.

Project “Witness the Draft” is stored on-chain. Etherscan’s token view, owned by the author

And because these on-chain NFTs live on ledger, their impacts are perceivable, measurable, and analyzable. When a collection drops into the blockchain, it reverberates, generating little disturbances to the ledger’s permanent data.

These properties make NFTs qualitatively unlike Beanie Babies. But the above reasons are mostly financial and technical. NFTs, on-chain NFTs especially, have more. They have latent cultural potential. Prominent artist and writer de la Rouviere refers to this as a kind of “fertile ground for emergent culture” (also see his “NFTs Can’t Die”).

In this brief post, I’ll use details from Etherscan and more to illustrate what I mean by that heady phrase. Let’s break it down into layers.

de la Rouviere’s project lives on chain; owners can call the contractand alter the asset

Layer 1: The Artifacts

As noted above, so-called “on-chain NFTs” are the best example of this latent potential. You can read introductions here about on-chain NFTs. The significance of this technical feature cannot be understated. As long as Ethereum and its data persist, these entities do too.

These artifacts can be inspected in all their detail. For example, the ever evolving On-Chain Checker is a tool that validates and visualizes on-chain NFTs (check out these tools too). Users can even display and tinker with the underlying code of these artifacts.

NFT Avastar #9707 checkable on chain here

The conceptual basis of some NFT projects can be analyzed with metadata too. For example, the early on-chain NFT project ChainFaces by Nate Alex has designated functions on the contract to completely recover details about the assets. So the asset itself, and its metadata details, are all on the chain forever.

Call ChainFaces metadata directly from contract here

These on-chain NFTs are enmeshed in the incentive structure of the entire blockchain. From wallets engaged in basic transfers to advanced DeFi — other stakeholders of the chain help to sustain the infrastructure. So the incentives and actions from others who are not even interested in NFTs help to preserve these assets. Even if forgotten, they lie in wait.

Layer 2: The Community

As long as Ethereum’s transaction data (sometimes called “receipts”) are preserved, then much more can be gleaned about these assets. You can summon a contract’s functions to see who else owns on that contract. The result is a mesh of co-collecting — individuals who have, for one reason or another, found themselves represented in the same contract’s memory. Etherscan displays summaries of this on-contract memory on its token holder details.

Who owns Autoglyphs(2019)?

(This would be like if Beanie Babies had by their intrinsic design a button in them that instantaneously revealed with certainty and currency the social network of all co-owners.)

We can visualize this interconnectivity (for fun, you can even reconstruct and visualize it on the chain itself). But owners can be projected on a wider reticulum. You can follow their trail into the ledger. What else do they own? How long have they been active on the chain? When did they go quiet? It poses all sorts of intrigue. And with tools such as Ethereum Name Service and more, it is possible to get a sense of the identity and engagement of these individuals.

A collection encodes a memory of its community.

Co-collection graph: dots are wallets, lines are collecting. See here.

Layer 3: Cultural Dynamics

The connectivity among owners does not exhaust the intriguing detail. If we can assume longevity to Ethereum’s transaction data, we can also unpack the rise and fall of communities. We can track a wave of incoming interest, or sudden departures.

These dynamics are obviously economic in nature. Mass acquisitions and sales of NFT projects are often the subject of discussion. But they are more than this. They are cultural dynamics by any reasonable definition of the term: “cultural dynamics research is about meaning over time,” and “an investigation of how a culture thus defined is formed, maintained, and transformed over time.” (Kashima, 2014)

In my visual series Reflective Recursion, I used data from Etherscan and more to visualize the history of KnownOrigin using KnownOrigin’s data itself. I sought to visualize the rise of cultural trends using the behavior of artists on chain. For example, Infection captures the sudden effect of the pandemic on artist creations, and a new wave of incoming artists during COVID.

“Infection,” lines are artists over time; dots mints; red = virus mention; see herefor more details

So a single NFT project, especially one stored directly on the blockchain, reveals only a segment of such dynamics. One single project shows its own section of this history. But we can assess cultural dynamics across many such projects. It may be possible to assess an NFT project as a sign of its times, an adaptation to a moment and its technical constraints. This analysis can be conducted across many such projects.

In a prior post, I described this “adaptive” quality. For example, relative cost of transacting constrains NFT projects. Avastars, a fully on-chain project, layers beautiful SVG components into alluring faces — a sign of more affordable gas (though CyberBrokers by Josie and team is a pioneering outlier to this principle, too, storing everything on chain for about $200,000).

When transaction fees rose with NFT popularity, projects adapted by computing a visual asset rather than storing them explicitly. Recently, using infrastructure like Art Blocks and scripty.sol and more (including on Bitcoin), there is a modularity emerging, through which NFTs are becoming more complex and coded from existing on-chain components.

Mandalas project generates a GIF on its contract; by whigawag

These are cultures and subcultures, dynamically changing, trackable on chain. An NFT project, even if forgotten, never loses such relevance. That relevance can be rediscovered. It lies in wait.

Conclusion: Cultural Raw Material

NFTs are undoubtedly different from Beanie Babies. The technical, financial and cultural features of NFTs seem to me qualitatively different and much expanded. This is especially true of on-chain assets and their associated data.

On-chain projects like this can be forgotten but never lost (though see here for important caveats). They would lie in wait for rediscovery. A fun example, perhaps familiar to many readers, is the lost MoonCats. A very early NFT project, it did not immediately attract much attention. The contract was waiting for new collectors to mint and “rescue” the cats. An account of this agenda describes the communal excitement of such rediscovery:

MoonCat Winter & Rediscovery. MoonCat​Rescue was developed and released in 2017 by a pair of Ethereum enthusiasts who wanted to explore the possibilities of the early Ethereum network. The project used an on-chain, proof-of-work mining system to allow people to “locate” and “rescue” MoonCats. … Though MoonCats gained a small and passionate following, interest waned. … MoonCats were rediscovered on March 12, 2021. In a bout of MoonCat mania, all of the remaining MoonCats were rescued in just a few hours. On that day — from the grassroots — the MoonCatCommunity was born!

MoonCat communitysite with tons of fun detail

Upon discovery, a community can cohere around these entities. The project can become a raw material for new cultural dynamics. So this gives NFTs a latent potential. Their encoded data can still influence across remote stretches of time. Their assets, community and dynamics are cultural in nature, especially when they are stored on the chain itself, inspectable and appreciated years after their creation.

Disclosure

I sometimes own or create projects I mention. I was not paid for this post. I wrote it for fun. Thanks to Etherscan for letting me contribute. You can find me on Twitter with links to projects here: