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SocietyMarch 6, 2021

People are flipping out over NFTs. What are ‘non-fungible tokens’ and how do they work?

nyan cat bitcoin

The art world is being bombarded with something called ‘non-fungible tokens’. We asked artist and crypto expert Simon Denny to help us explain what they are.

At first glimpse, a gif of Nyan Cat is nothing special. It’s a bit cute, a bit nostalgic. So why did one sell for US$450,000? The worlds of cryptocurrency and art have one big thing in common: they’re really hard to understand. And in NFTs, like that outlandishly priced gif, they’ve come together to form an expensive, exciting glimpse of a future that is almost incomprehensible – but not quite!

New Zealand artist and public speaker Simon Denny has just landed in New York to open an exhibition. He’s also taking a lot of phone calls now that NFTs have gone mainstream; he’s been making artwork about crypto since 2015. With a little help from him, we break down what an NFT is, and whether you should be getting involved.

What is an NFT?

It stands for “non-fungible token”. “Fungible” means two things are interchangeable. For example, a $10 note is fungible. If you have two $10 notes, they’re basically the same. It doesn’t matter which one you use. Art is not fungible; one Ralph Hotere painting is not interchangeable with another.

Most cryptocurrencies are fungible tokens; one Bitcoin is worth the same as any other Bitcoin. Non-fungible tokens, then, are crypto tokens that are, basically, digital art; they’re stand-alone pieces. Totally non-interchangeable.

NFTs can be almost anything. There are videos, still images, and even music – Kings of Leon have announced their next album will be an NFT. “You can embed any file type, I think, into an NFT structure,” says Denny. “If I wanted to make an NFT today, I have a range of spaces to choose from.”

NFTs are sold on marketplaces like SuperRare, which requires submissions that need to be approved, and at the other end of the spectrum OpenSea, which is open to everyone. If you want to be a fancy-pants elite digital artist, it’s possible. If you want to be the digital equivalent of a street artist, that’s possible too.

Do I need Ethereum to buy an NFT?

Ethereum is a cryptocurrency, similar to Bitcoin, and it’s what most NFT platforms use as money. You can download browser extensions like Dapper or Metamask and add Ethereum to it with your credit card. Some marketplaces like Nifty Gateway and MakersPlace accept credit card payments, but you’ll need a wallet address (which come with extensions like Metamask) to receive your NFT.

If you want to learn more about the blockchain technology underlying Ethereum, I recommend this video:

Who is buying NFTs?

Yeah, spending US$450,000 on a gif is pretty ridiculous. But Nyan Cat is a historic part of internet culture. “Art has always been about communities,” says Denny. “It’s about certain people with money signalling value – the way they buy art is to gesture affinity and display a certain wealth and savvy.

“In a way, with this new wealth that’s emerged in a crypto context, it’s the same thing but in a different social milieu, and also with different values in terms of what’s interesting in art.”

The art valued by digital collectors isn’t necessarily Warhol or Monet or Klimt. They’re more likely to veer toward graphic art and drop culture; NBA Topshots, which releases NFT “drops” of small videos of moments from NBA games, is so popular it isn’t allowing any new sign-ups.

“The type of person that might have crypto wealth could be a person that is maybe familiar with collectibles, and really values that mode of cultural expression,” says Denny.

Who is making NFTs?

They’re often connected to developer or blockchain communities, if not actively working in them, but graphic artists and digital painters are naturally aligned with this kind of world. Auckland-based digital artist Richard Parry has turned some of his previous work into NFTs; they’re deconstructed Gameboys. A perfect pitch for the internet native audience. He made more than 11ETH (NZ$24,000) selling them in one day.

“I have no idea who bought my art,” he says. “They own a ETH wallet of over $900,000 and seem to be flipping NFTs for quite a fair income.” The fast-paced world of NFT creation is new and bizarre to him, but he’s all in. “I intend to roll with this gold rush until it ends or I end.”

You don’t need to be a professional artist to make an NFT. I made this one. It’s not very good, but if I can do it – you can.

cat with a pop tart for a body and a rainbow for a fart
An NFT of Nyan Cat sold for more than US$450,000

Are NFTs inherently political?

Yes. The ecosystem that supports them is based around decentralisation, a concept Denny describes as being a core part of “something that is maybe a ‘hyper-capitalism’”.

“[Decentralisation is] recently coming out of a particular history of Silicon Valley ideology, maybe from the mid-century on and the beginning of the internet,” he says. “It’s crossed over with hippie culture and the idea of being self-sustaining and being your own individual governing unit.”

It’s libertarian, basically.

The world of crypto is explicitly concerned with redesigning money, and NFTs are no exception. “There’s an existing money system – the so-called ‘fiat’ system,” says Denny. “Bitcoin comes with a bunch of technical and political claims that push back on that.

“Some would say it’s on the right-wing side of even mainstream economics.”

Despite this, some traditionally left-wing communities – like artists and musicians – have embraced it as a tool. “It’s pitched as something that pushes back on elites, but in other ways it can be seen as another ponzi scheme that serves people who get in first and people already at the top,” says Denny.

Are NFTs/Bitcoin bad for the environment?

“It’s power hungry, to a tune you would not believe,” says Denny. “To keep one NFT up, in theory, takes the entire electricity of a European citizen for a month. There’s really intense energy costs with [Ethereum technology].” Ethereum, Bitcoin and other currencies that use a mechanism called “proof of work” are those most responsible for crypto’s most egregious environmental costs.

He points out the crypto community stance on this is that trust has a cost. Using cryptocurrency and NFTs comes with a totally transparent ledger (the blockchain), whereas the fiat system is seen by crypto enthusiuasts as murky and unaccountable. The cost of crypto is measurable. How could you measure the cost of the financial world? “It’s a very ethereal metric to grasp for,” says Denny.

“How much energy does it cost to run banks, to hire people to run banks, to keep up all these transaction networks? Nobody’s measuring those energy costs.”

Ethereum has a big community around it, which is what gives NFTs such a good platform – the environmental drawbacks likely won’t disappear soon, but neither will Ethereum. “Because it has this major use space, and there’s other stuff built on top of it, it’s likely to stay around.”

Are NFTs the future?

Imagine coming home from a long day in the data mines and relaxing on your smart futon, the walls flickering with large televisions in frames displaying your NFTs. One is titled “Real Girlfriend”, and she cost 5ETH.

“There will be a crypto-native social web one day, where likes are money,” says Denny. “That’s likelythe world we’re heading towards.”

Is it inevitable? “It’s not,” he says. “But there’s this idea of hyperstition that’s popular in crypto: repeating something enough makes it true.”

False

OPINIONSocietyMarch 6, 2021

All the things Michael Bassett got wrong in his noxious article

False

While it has since been deleted and an apology issued, an op-ed by former Labour MP Michael Bassett published by the Northland Age and the NZ Herald this week caused an uproar for its racist cherry-picking and false reporting of historical facts. Historian Scott Hamilton sets the record straight.

Michael Bassett is an angry man. The historian and former Labour minister believes that he and other Pākehā are becoming second-class citizens of this country. In an opinion piece that was printed in the Northland Age and on the website of the New Zealand Herald, Bassett insists that a cabal of “Māori revolutionaries”, “woke” academics, and civil servants is working with sinister efficiency to turn Aotearoa New Zealand into a bicultural dystopia.

Bassett complains that he can’t tune in to Radio New Zealand without being assaulted by Māori words. He’s upset that Aotearoa is increasingly being used as a name for his country. He doesn’t like the fact that Auckland’s forthcoming Arts Festival will feature lots of Māori song and dance. And he thinks that New Zealand educators want to teach the nation’s kids that white people are evil.

Bassett’s article was soon pulled from both the Northland Age and from the New Zealand Herald. The managing editor of NZME, the company that owns both papers, called the text “unacceptable”. Hobson’s Pledge, the right-wing lobby group founded by Don Brash, condemned the removal of Bassett’s words, claiming that it shows “how far New Zealand has drifted” in the wrong direction.

I think that Bassett’s article is unacceptable, not because his skin is white or because he is a political conservative, but because he makes a series of demonstrably false claims about the history of Aotearoa New Zealand. Sometimes Bassett cherry picks an event from the past and tries to make it mean something it doesn’t. In other places in his text he says things that simply aren’t backed by evidence. Bassett used to teach history at the University of Auckland. He has written a series of competent, if rather dull, books about the history of politics and government in this country. But his latest effort wouldn’t be acceptable if it came from a first year undergraduate student.

Bassett begins his piece by complaining that Aotearoa, a “relatively recent” Māori name for this country, is increasingly being used alongside or even instead of New Zealand, which is supposedly “the name by which our land has always been recognised”.

But the use of Aotearoa is much older than Bassett suggests. The name appears in a song that George Grey collected, where it refers to the land discovered by the legendary navigator Kupe. The song was already old when Grey heard it in 1845. Auckland’s War Memorial Museum displays an exquisite flag that was captured by colonial troops from King Taawhiao’s men in the Hunua Ranges in 1863, during the early phase of the Waikato War. The flag is emblazoned with the name Aotearoa. When Taawhiao founded his own bank he called it Te Peeke o Aotearoa. The banknotes he issued carried the name. A search of 19th century newspapers at the Papers Past online archive turns up 1,379 references to Aotearoa, the vast majority of them in Māori-language media.

A bank note issued by Kiingi Taawhiao’s Peeke o Aotearoa, recording the name Aotearoa as early as 1886 (Image: Te Ara / Reserve Bank of New Zealand)

Nor does the name New Zealand have quite the history Bassett claims. Until the late 19th century, it had a meaning very different from the one we know today; it was associated with indigeneity. It was Māori, and not Pākehā, who were referred to as New Zealanders. In a famous text written in 1840, the English writer and historian Thomas Macauley imagined a far-off future in which London had become an abandoned ruin, which some “visitor from New Zealand” had come to study and sketch. Macauley’s imagined New Zealander was Māori.

It was only late in the 19th century, when a group of whites born in these islands founded the New Zealand Natives Association, that many Pākehā began to identify with the name New Zealand. (Māori were banned from membership of the New Zealand Natives Association.)

Bassett claims that New Zealand was always the preferred name for this country, but in the late 19th and early 20th centuries many Kiwi preferred Māoriland. Books like Adventures in Māoriland and Musings in Māoriland appeared. A national paper called itself the Māoriland Worker. In 1895, parliament debated making Māoriland the nation’s official name. A popular patriotic ditty sung during World War I was called ‘For Motherland, oh Māoriland’. A search of Papers Past finds 73,121 references to Māoriland in our media between 1839 and 1950. Nor was Māoriland unknown abroad: a search of Trove, the database of Australian media, turns up more than 20,000 uses of the name.

Bassett goes on to complain about the renaming of streets in Auckland Tāmaki Makaurau. He tries to downplay the importance of Tāmaki Makaurau to Māori by claiming that only 800 Māori lived in the area in 1840.

But why did Bassett pick the date 1840, and not, say, 1820 or 1860? The answer, of course, is that in 1840 an abnormally small number of Māori lived in Tāmaki Makaurau. Iwi that had moved into other territories after Hongi Hika’s Musket Wars campaign in the 1820s were only beginning to return to the isthmus.

A patriotic cartoon promoting the song ‘Oh Motherland Oh Maoriland’ (Image: The Observer, 1917); and right, the cover of Chris Bourke’s Songs and Sounds of New Zealand’s Great War

But even at the low ebb of 1840, there were many more than 800 Māori in Tāmaki Makaurau. In his history of the city, Bassett’s old university colleague Russell Stone notes that by 1835, 600 Māori had returned from exile and established a village called Karangahape, at present-day Cornwallis. There were other villages at Onehunga, at Māngere, and at Rangitoto-iti near the Tāmaki River. Bassett’s figure is badly wrong.

In 1820, before Hongi Hika’s campaign, many thousands of Māori lived in Tāmaki Makaurau. By 1860, Māori communities were thriving on the fringes of the Pākehā colonial city. The Manukau harbour was home to half a dozen increasingly prosperous kāinga. They grew wheat, planted orchards, and built a handsome scoria stone church at Māngere.

In 1863, Tāmaki Makaurau was again depopulated, as Governor Grey demanded Māori swear allegiance to the queen or go and join Tainui iwi in Waikato, with whom Grey was about to declare war. Kāinga were abandoned, looted and burned. The Great South Road filled with refugees. Bassett’s article neglects to mention the ethnic cleansing of Tāmaki Makaurau in 1863.

The ultimatum issued by Governor George Grey to Māori living in Auckland

Bassett gives the inter-iwi Musket Wars of the early 19th century a prominent place in his text. He believes that these wars show the shortcomings of Māori civilisation. But Bassett has a one-sided understanding of the Musket Wars. He is very aware of the massacres that Hongi Hika inflicted on traditional enemies using new-fangled guns. But he appears to know little about the peacemaking that slowly ended most of the wars, well before the signing of the Treaty of Waitangi.

In 1823, Hongi and his Ngāpuhi warriors invaded the rohe of Te Arawa. They dragged waka up streams and through bush so they could reach Mokoia, the supposedly impregnable island pā in Lake Rotorua. Hongi’s men stormed the island and killed many of its defenders. Immediately afterwards, though, peacemakers amongst Ngāpuhi and Te Arawa arranged a feast where the two iwi settled their differences. Māori culture had mechanisms for war-making, but like most cultures it also had mechanisms for stopping war. The interconnecting whakapapa of iwi like Ngāpuhi and Te Arawa always made it possible to appeal for amity, even amid calls for utu.

Bassett makes no mention of the tremendous impetus that the arrival of Europeans and the sale of guns gave to inter-iwi warfare. In Guns and Utu, his classic study of the Musket Wars, Matthew Wright compared the inter-iwi wars to the Thirty Years War that devastated northern Europe in the 17th century. In both cases, firearms upset an old order. In both cases, devastating warfare was eventually followed by a peace made by diplomacy. It would be unfair to use the Thirty Years War to suggest that Europeans were inferior to other peoples. Similarly, it is wrong to use the Musket Wars to denigrate Māori.

Bassett wants historians and schools to celebrate the “more developed culture” that Britain supposedly brought to the South Pacific. I suspect, though, that Bassett, with his conservative political views, would be horrified if schools taught the real reason many Britons came to these shores. A very large number of migrants were refugees from poverty and persecution in the mother country.

In his great book The Farthest Promised Land, Rollo Arnold showed how English farmers tormented by eviction threats and falling wages protested and set up unions in the 1860s and 70s. The rural workers went on strike and staged huge marches. In 1874, though, their largest strike collapsed, as hungry men went back to work. In response to this failure, the leader of the rural workers, future Liberal MP Joseph Arch, urged families to migrate to Britain’s colonies, in the hope of leaving their misery and oppression behind. Using archives on opposite sides of the world, Rollo shows how migrant recruiters sent to Britain by New Zealand’s government were able to persuade tens of thousands of impoverished and angry men and women to come to this country. I doubt whether many of these refugees would agree with Bassett’s simplistic veneration of British civilisation.


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The past is composed of an infinite number of events. Historians have to select a few. The events they select, and the stories they tell with those events, to some extent reflect their personal beliefs and experiences. That’s why history is always partly subjective as well as partly objective, and why there is no final, single historical narrative. But Bassett’s cherry-picking of events goes far beyond what would be acceptable to serious scholars of the past, and his evidence-free claims about Māori population and the history of our toponyms would also be rejected. It is hard to believe that the author of the text printed by the Northland Age was once a history professor. Bassett’s intellectual decline proves once again that bigotry is injurious to scholarship.