NFTs are about networks

March 2023

NFTs are so much more than digital images. They’re a technological primitive for distributing ownership of a network built around a meme - a belief, idea, or creator.

Inspired by Jack Butcher, this is a manifesto for NFTs as network building instruments.

Many people haven’t caught onto this yet because they don’t think about networks. They’re the invisible hand of human coordination on the internet.

Let’s break down ownership and networks separately.

NFTs enable ownership of digital goods through verifiable authenticity and provenance. In the old internet, you couldn’t own anything. It was impossible to create networks transcending individual platforms because there was no concept of digital scarcity. Content could be infinitely copied and replicated with no way of identifying the original.

Now, there’s an immutable record tying content to its creator and subsequent owners, making it easy to identify a canonical version. And the tokens reside with users, not platforms, so they move with them around the web.

Because of this, digitally native networks can be built around NFT holders. And with constant liquidity, these networks evolve as they buy and sell their stake.

NFTs are a building block for networks because holding the token in your wallet is “proof of belief” in the meme. It’s an expression of identity by showing what you care about and where you hang out online.

Previously, data aggregating people with similar online interests sat on private company databases. Now, it’s legible and networks can form around it. Anyone can find their tribe by looking at who else holds the same NFTs.

As Jack says, “the contract is the canvas.” The real art is the network creation.

To purchase an NFT is to speculate on the network’s future value. Quoting Jack: “like any business or any venture, you’re betting your capital on the fact that this network will continue to expand and you bought a stake in that network very early on.”

Nodes are incentivised to grow the value of their networks by proliferating the meme and making more people want to join; then the admission price increases.

So, if NFTs are a mechanism for network ownership, the art is an abstraction of that ownership record. It makes it easy for nodes to signal their participation.

With Checks, Jack repeatedly updates the contract metadata to change the art. You didn’t buy the image; you bought a relationship with him and fellow holders.

Much conceptualising of NFTs is way too reductive. It’s all about networks.