Solarpunk & NFTs: A Social Response

Solarpunk & NFTs: A Social Response

by Hydroponic Trash

The views in this article are my own. Take the arguments in this and make your own decisions or arguments against them; my opinions are not a monolith. 

In this article, I want to address more of the social aspects of how non-fungible tokens (aka NFTs) in their current form interact with essential ideas or core concepts of solarpunk. Solarpunk as a whole is a morphing and changing aesthetic, literary genre, and cultural movement that has a wide range of opinions. The definition isn’t set in stone, nor do I think it should fit in ultra-rigid constraints; however, I do think there are specific points that solarpunk, and the community in general, agree on. Solarpunk brings together aspects of anti-racism, anti-colonialism, social ecology and egalitarianism, anti-homophobia and transphobia, along with anti-authoritarianism. However, it’s not just a reaction to negative forces but a prefigurative community and aesthetic that wants to build better futures based on pro-social communal living, inclusivity, diversity, how technology and ecology can work together, and social change.

I would argue that to be against racism, colonialism, homophobia, transphobia, and climate destruction is also to be anti-capitalist, or at the very least against conspicuous commodification. Capitalism and its historical mechanisms perpetuate these ills of domination and exploitation and, in many cases, rely on them to operate.

I understand solarpunk as a movement that rejects the methods of domination and destruction that got us into the mess we see today, choosing instead a brighter future. Capital markets only work with exploitation and are rooted in artificial scarcity. Though cryptocurrencies, web3, and NFTs are new technology and new ways of looking at capital markets, trade and commerce, they fundamentally mirror the inequities baked into capitalism.

Let’s “zoom out,” so to speak, and look at things from a high-level view. The discussion about whether cryptocurrencies and specifically NFTs fit in solarpunk largely boils down to how they interact with the world. It’s a discussion about what the future of solarpunk is: Whether a future solarpunk world would be a post-scarcity world, or one based on artificial scarcity, as our current system is. The environmental and technological impacts of cryptocurrencies and NFTs would be best discussed at length at a different time; for now, I want to focus on the social implications of these technologies.

NFTs, Cryptocurrencies, and Inequity in Capitalism

NFT markets, most web3 platforms, and cryptocurrencies in their current form hinge on the same power structures and imbalances they say they are trying to overcome. They all require fiat capital to participate, and so it becomes pay-to-play. Some might say NFT markets are more equal because they only require money, compared to the current art market that is rife with racism, sexism, and colonialism. However, NFT markets and the people that support NFTs often ignore the socio-economic implications that capitalism has had on our society. These new markets directly mirror the inequities of fiat-based capitalist markets because NFT and cryptocurrency markets are directly linked to fiat markets. In order to buy cryptocurrencies, you need upfront fiat capital. In order to “mine” cryptocurrencies, you need the upfront fiat capital to purchase the equipment to “mine” the currencies. In order to mint an NFT, you need cryptocurrency. And in order to purchase an NFT, you need cryptocurrency. Every step and entry point requires an upfront investment of fiat currency. 

One of the largest and longest-lasting socio-economic factors that act as a historical barrier in the US is that of slavery and colonization. African Americans and largely anyone with any African ancestry in the US are at an almost 350-year disadvantage in capitalist markets. Native Americans had their land stolen through colonization and were systematically massacred, and their ancestral lands were and are still used to produce wealth that they themselves have yet to see. The inequities brought on from slavery, Jim Crow laws, redlining, legal slavery, colonization, and genocide carry over historically into capitalist markets and thus NFT markets because they are both closely connected. (Editor’s note: This is also a reality in Canada for black Canadians and Indigenous peoples, who are routinely and regularly disenfranchised both historically and presently.) When large percentages of people are starting off at a marked disadvantage in the market, there is no way to say that these markets make people freer. There is no way to say that everyone is starting off on an even playing field because the field is not even. This leads to another point about NFT markets: they are dominated by the already wealthy, people who inherited wealth, or who exploited workers in order to gain wealth. This means the market is rigged in favor of those already at the top of the socio-economic chain.

Speculative Investing and Rigging The Market

Those who are already in positions of wealth and power can control individual NFT values and, in a larger sense, control entire NFT marketplaces. This is because on most platforms the value of an NFT is not based on the intrinsic value of the item or artwork itself but on a combination of utility (how the NFT could be used), ownership history, and market speculation. When an NFT is made or “minted,” it doesn’t have any real value until someone purchases that NFT for whatever the original price was set for. Keep in mind that there is an upfront cost of minting an NFT, so you start out in the red if your art has no guaranteed buyers. What exactly does that mean? The value of an NFT is not intrinsic; an NFT’s price is largely determined by the person who previously owned them, the person who currently owns them, and how much they sell for. In practice, this means that the value of an NFT can be changed by artificially inflating the price either by getting a popular person to buy the NFT, by selling the NFT at a profit continuously to show that it has “value,” or by using a combination of both tactics. Wealthy people and those that have the upfront capital can exploit this mechanism by artificially buying and selling an NFT using accounts they control. 

For example: Mike, aka Cryptoguy242, has upfront capital and moves that money into cryptocurrency, then mints an NFT at a set starting price. Mike makes a new account, aka Art_Buy3r, and purchases the NFT for almost double the starting price. Mike then repeats the process so the NFT asset has grown in value over time, showing to legitimate prospective buyers that the NFT is “valuable”. He does this until the NFT is worth almost twenty times the original value. He then sells the NFT to a real buyer, who thinks they are purchasing a great investment without knowing who was actually selling the NFT in the first place. They can see what accounts sold it before, but the buyer cannot see the real identity of the sellers. The buyer is stuck with an NFT that has been artificially inflated, and if Mike set a clause in the smart contract to always take a percentage of the value at sale, his fake accounts also make a commission.

Mike has taken a digital asset, made multiple accounts to buy and sell that digital asset using his own money, and made a twenty-fold profit selling a worthless digital item to someone who legitimately thought they were buying a valuable asset. 

This exact situation happens on a near-daily basis, and is largely one of the big reasons why we see what would otherwise be regarded as “bad art” selling for ridiculous amounts of money. These huge sales never seem to be legitimate and usually follow the typical formula of a pump and dump, where the value of an asset is artificially inflated and those involved profit greatly. NFTs are the perfect example of pure artificial scarcity. These are digital objects that can be copied and replicated at nearly zero marginal cost, yet are sold at a profit and speculated on based on their arbitrary value. Is that to say that some of the underlying tech can’t be changed for better uses? No, but that is best served for a discussion on the technology, and how some platforms can be used as a productive tool.

A common argument for NFTs is that small artists can use the system to sell their art because it’s easier and gives them more options. But does it? Say a small artist wants to sell their art as an NFT. They have to exchange their fiat money for a cryptocurrency (paying an exchange fee), then pay to mint their token, which can cost around $50-$150 USD. Unless they have an existing buyer or market, their art is sitting on the platform unsold while they are financially in the negative. If someone does buy their art, were they really buying it for the art, or were they looking at it as an investment? Are they buying the actual art or a hash on a blockchain? Almost all art being sold as NFTs at the moment are treated as pure speculative investments. Why do we view this as inventing anything new? NFT markets seem like a way to reinvent traditional art markets, but add more ways to extract money out of both the artists and the buyers, with every part of it being ultra commodified. 

Most people don’t have issues with the technology (though many do), but with how it’s used to force every interaction to be monetized. We already have systems and platforms for buying art and directly supporting artists. Why reinvent the wheel?

The Future of Solarpunk: Artificial Scarcity or Post-Scarcity?

In my view, the future will only be better if we work to change how our social systems work, our relationships with each other as humans, and our relationship with the ecosystem and the Earth. We can’t get to a better future using the same techniques of domination and exploitation that have marked the need for change in the first place. We won’t build a better future selling digital items online while releasing nearly an extra 57 megatonnes of carbon dioxide from electrical use a year running Bitcoin and Ethereum. That figure is also ignoring the blockchain tech, servers, and clients needed to actually run the network. 

So what is the alternative? Instead of artificial scarcity, we should embrace ideals of post-scarcity. That means a society based on mutual aid, and mutual respect. Not only for each other but the planet and ecosystem as well. For the vast majority of humanity’s time on this planet, we lived off those principles, and many still do today. These ideas scale from families to small towns, to cities, to regions, and whole geographical areas; ideas like, “I have food, but you can provide childcare, or have water. I hope that by providing food, you in return will help me out too.” This idea of mutual aid does not function in a coercive, “you owe me something” kind of way, but rather is based on a mutual understanding that we have everything we need, and the only way to live well is to live together. Post-scarcity means meeting everyone’s basic needs and then some and not because the receiver has to work for it, or has to have a certain amount of money, but because they are a person who deserves dignity and the chance to live a good life. Full stop.

The alternative is to live in scarcity, always fighting each other for resources, battling each other for power. Instead of the crippling monetary debt incurred by a system of artificial scarcity, in a post-scarcity world our debts would be to help each other live the best possible lives we can. Our debts would be to the Earth and the ecosystem, and we would be working to not only protect and preserve the Earth but help regenerate it. Once someone gets a taste of prosperity, of a community that loves them and takes care of them, once someone finds autonomy while also working as a collective, they won’t want to go back to the way things used to be. They will make sure everyone has what they need, because even today in this crazy, messed-up time, we can (and should) meet everyone’s needs. We have everything we need already, but forces of domination, exploitation, and scarcity mean some have, and some have not. If we want to make a better future we have to make sure all have all, and it’s possible. That to me is the true vision of solarpunk.