Maybe buying and selling colours isn’t entirely nonsense
21.00, Tuesday 1 Feb 2022 Link to this post
There’s a new project called Color NFTs in which you lay down real cash money to buy and sell colours, and get a cut when that colour is used, so if you owned some specific murky red and the next Rothko appeared and started making electronic art, you would be proverbially quids in.
Which is ridiculous. But fascinating. But ridiculous. But fascinating.
BECAUSE, well, I have to divert into platform capitalism and meme stocks for a minute.
Okay, we’re used to the idea that engineers at Uber get a stake in the company in return for working there (in the form of stock options). So they share in the upside as the company grows.
(It could be any company but let’s stick with Uber.)
Then it’s not much of a stretch to say that Uber drivers should also get a stake. They’re practically employees.
Then why not also Uber passengers?
Uber follows the principles of Nick Srnicek’s platform capitalism: it gathers data from its captured marketplace, uses that data to drive marketplace activity (by ever-more-efficiently directing drivers and attracting passengers), and uses marketplace growth to capture even more data. It’s an engine.
And what that means is that passengers contribute as much to growth, in their way, as engineers and drivers.
Ok, so with every ride and with every referral code shared, a passenger should get a fractional amount of stock in Uber. A share in the upside.
Maybe Uber drivers aren’t quite employees, and aren’t quite independent contractors, but they’re a new category of worker (as previously discussed) and they also run their own businesses too. So perhaps that is an equity swap that takes place – the driver ends up with a micro-stake in Uber, but also Uber ends up with a micro-stake in the driver. So there’s a kind of mutualism. Uber ends up being incentivised for the long-term success of its worker community.
And another wrinkle:
It’s not pleasant to picture Uber drivers as being “Below the API”, analogous to commoditised subroutines in the software that runs the app, but it’s a solid way to understand what’s going on.
Lean into that analogy for a second… if Uber drivers deserve ownership-mutualism, and Uber drivers are like software, and Uber itself is built from software - mainly open source software - then surely the open source software used in the Uber app and website also deserves a stake in the company? What does it mean to give startup stock options to a website deployment tool?
And what about the roads on which Uber cars drive? They’re funded by city taxes. Why not pay taxes 99% in cash, and 1% in Uber stock, divided up geographically by mile of road driven?
Why not share in each other’s success?
Keep unfolding this, to more companies and more participants.
I get a picture of a network of mutual dependency – a mutualism graph if you like, just as Facebook is a nodes-and-links graph of people, and the Google index is a graph of webpages.
Mutualism is usually a left-wing idea. What I mean to say is that mutualism also appears from the economic right. There’s a glimpse of it in meme stocks – everything is a meme stock now; the stock market creates cults as stock owners are highly incentivised to indulge in boosterism, whether that’s Tesla or Patagonia.
And just as the wealth of the stock owners is dependent on the success of the company, the company is increasingly dependent on the support (and evangelism) of its stock owners.
Aside from the cult-like incentives, meme stocks are the endpoint of something which has been true for a while about consumerism: as politics gets less able to shape society, votes get devalued. So people have realised that a $1 spent is a vote for the world you want to live in.
Call it networked value.
Pay $1 for an Uber ride and see that dollar ripple out to the engineers, the drivers, the technology stack, local government… and see the value reflected back in the micro stock option you’re granted, which has dependencies on that whole network too.
Enter: Color Museum, the organisation behind Color NFTs.
Which launched a few days ago and has been widely mocked online ever since. It has been turning around and around in my head.
You “buy” a colour, for actual money.
Earn royalties from your colors.
We are building an OpenSea competitor in which transaction fees are shared with Color NFT owners based on the proportional use of their colors in traded NFTs.
Let’s unpack that:
- An NFT is a way to attach rights, such as ownership, to digital assets. An NFT is like a widely accepted receipt to which you can attach software.
- Digital assets such as… art. There are lots of artists making wonderful art, and selling it as NFTs! There are all kinds of vibrant marketplaces! Some arts have gotten pretty rich! Not all.
- OpenSea is one such marketplace, a very big one. The traders are richer than the artists.
- But #1: the marketplaces are often full of scams – the people trading the NFTs are quite possibly involved in some kind of baroque pyramid scheme.
- But #2: at least the NFTs are backed by beautiful art, right? Not always. Anything can be turned into an NFT, including stuff you completely make up.
So the idea of a marketplace to own and trade colours is like buying and selling the ghosts of ghosts.
Which is why Color Museum has received the reaction it has.
The idea of Color Museum is that they will provide a platform to trade art, and take a 1.25% fee on each trade, and then split the fee according to the “owners” of the colours on the platform.
It’s… moderately absurd? Any more absurd than the owners of Sotherby’s getting a share in the profits generated by the take on auctions? Dunno.
What makes it interesting is that it’s an automated way to share value with a network of dependencies. That’s the abstract machine.
(It is interesting to make a habit of trying to see the bad in ostensibly good things (practices we call things like critical thinking and horizon scanning) but also to see the good in ostensibly bad things.)
I would be more interested if Color Museum went further:
- What if Photoshop, Blender, and so on also existed as NFTs, and they got a cut of the value when art made using their software was sold?
- What if the value of a trade cascaded to red, and green, and blue, and Blender, and the sponsors of Blender, and the software libraries Blender depends on, and so on and so forth.
- What if, by creating your art with Blender, you got a share in the upside of Blender too, in return?
From the perspective of the underlying smart contracts it’s all the same.
Value is networked. And what NFTs do is open up the conversation about how that works.
Maybe we can stop thinking that a transaction is a one-off swap - value in cash one way countered by value in goods the other - and start thinking about a transaction as establishing an ongoing hyperlink of mutualisation, a share for all ships in the upside of the rising tide.
It’s ugly to reduce everything to monetary transactions. But if instead we can see these systems as prototyping the platforms for how to implement mutualism in the real world, and providing us with illustrative examples to discuss it… well.
So Color Museum is simultaneously bullshit and possibly a wild money-grabbing scam but also a tool for mentally exploring the potentialities of networked value, and it can be both at the same time, I’m into that.