September 20, 2022
Dennis Lee is an architect based in Hong Kong and licensed in the US and he is also a columnist for the South China Morning Post. NFTMetta co-founders Allen Cheng and Tsering Namgyal interviewed him on his views on the state of the global NFT markets and his views on the intrinsic value of the NFTs and digital collectibles and a recent drop in the digital asset markets.
Q: You recently pointed out in a column in Hong Kong’s South China Morning Post that there is hysteria and mania in the global crypto and NFT market places. Why do you think so?
A: I write usually about art and culture, architecture and urban planning for SCMP. But probably in the past year and a half to two years all of a sudden everybody, whether expert or not, are talking about NFTs and collectibles. I just feel like I should address the merits of it. I think whenever we have new products everybody is so excited there are lot of opportunities and some of these opportunities are immediately about investments, profits and revenues. There’s also the fear of missing out like what if I miss out and then it’s like everybody is earning and whereas we are left behind. But I feel like we also have to be careful in some ways because if we don’t dig deep and ask questions then we sometimes could be making irrational decisions because ultimately I think no matter how excited we are we need to look at the value of the commodities being offered. So this article that I wrote is basically asking questions and not really about whether the technology is good or not but whether the application of the technology is relevant right now.
Q. You pointed out this hype that we see in NFTs has helped many new or young artists or tech savvy artists make vast fortunes — without necessarily paying the dues that Old Masters paid, people who toiled for decades perfecting their artistic techniques in anonymity and dying in poverty, only to be discovered generations later by future wealthy collectors. Please elaborate on this hype for us.
A: I think perhaps it’s so not much about whether the dues are being paid but I was trying to use a very short article to discuss how art has changed over time. When the young artists nowadays they produce a good work and if they sold it to me kudos to them but the fundamental question is if the work is good. So I see it in the history of art – of which I’m not an expert but I studied it when I was in architecture school. In the history of art there are different generations. Historically, most art work were produced and collected on a commission basis. Sometimes like the king or the prince or the church is a big commissioner or big families like Medici during the renaissance or even in the early 20th century families like Guggenheim are big collectors and big philanthropists so they commission the artist to produce the work and to name no other than Michelangelo; he had probably had to break his back painting the Sistine Chapel which took him four years. A lot of us have seen the David’s sculpture but what we don’t know in fact that’s the third version of David took him another three years to do that. So definitely it’s a lot about art and craft but when it comes to modern art there are two new elements to it I would say. One is the rationalization of the meaning of things and a deeper search for meaning. I said that because if an educated person, for example, looked at Mark Rothko or Jackson Pollock or any modern artist that you can look at when you are not being educated you don’t actually know the history of it to appreciate what they are trying to do. And I think you know the artist Marcel Duchamp; he basically took out a urinal and flipped it sideways and called it a “fountain.” The meaning is the question of what “art” is and that generally the whole new discussion and the whole art community was talking about that. But the biggest part about modern art is also the commercialization of it when art becomes a business; so when it becomes a business it has a market and trading it becomes an investment. What I see now the NFT arts and collectibles is like it’s very strange because it’s no longer about the art and craft, it’s not even about a deeper meaning; it seems like it’s mostly about the digital asset investment. So why are people buying? Are they buying them because they appreciate it and want to put it in their living room like before, or are you buying them and it is all about investment? That’s the key question that I wanted to bring up. So this is a phenomenon you know but personally I feel like any art is at the end of the day is your personal take on it. It is that you appreciate it. You think there’s a value in that you buy it. This insane sort of investment is still worth it because it’s worth it to you but if you only treat it as an investment vehicle that becomes more questionable whether they are art or not.
Q. Please tell us what is wrong with young or tech savvy artists or creative people earning fortunes without paying their dues? Does this mean that collectors/investors are being duped by young technologically savvy artists who have yet to perfect their craft? Or does this mean there are too many foolish wealthy people out there?
A: Good question. I don’t think there’s anything wrong when with being young and make a fortune out of it; really good for them. I’m an architect if I could do a hand sketch and I can sell it for millions I would definitely do that but the danger is that if you are jumping on to a bandwagon but without asking questions. I think one of the biggest historic NFT sale was the Beeple’s Everydays: the First 5000 days. I think it was sold for US$69 million. In many ways when I look into the art I really appreciate it because he really does one art work every day for thirteen years and then he sold it so there is deeper meaning to it. But at the end of the day I think our valuation is always up to the eye of beholders. Something like Blue Marilyn that was sold for insane dollars. Is it worth it? Yes everybody knows Andy Warhol but for a layman – for somebody who doesn’t know – probably they don’t think it’s worth it because it’s just oil on the painting right but for somebody that knows “wow it is a Warhol!” so that would have a value that is so true to yourself. So in some way I think it’s we have to understand ourselves what we are buying you know what people are buying. I think MetaKovan is a guy that bought Beeple. Is he buying it because he wanted display this every day for first five thousand days in his living room as normally what people do with art work? Or is he buying it just to get publicity? Is he buying it as an investor? It’s a very different world right now and at the end of day it is your personal choice that’s what I think.
Q. The global NFT markets — like the crypto markets — have fallen dramatically due the bursting of the bubble globally in all capital markets. Do you think the bursting of the bubble is a healthy thing in that it will weed out the greedy scam artists from the real serious artists or creative industry professionals?
A: I think so. I think just as in the stock market what they called “correction” which I do think is healthy. A close friend of mine who is a collector in sports memorabilia, for example, is into NBA Top Shot – they mint NFT’s of video clips or basketball shots or dunks. They sold Lebron James dunk clips for like $208,000 which is insane and then Top Shot was doing really well it went up to something like $224 million in one month but then all of sudden it dropped dramatically to $26 million fourteen months later. $26 million dollar is still a lot of money, a lot of investment but people began to start asking questions about this correction because when they do well they were flooding the market with a lot of clips – and the interesting thing about these clips is that you can still go to Youtube where you can still see the same clips for free – but it becomes like the buyers have the claim or the authentication of the ownership of these clips. So at the end of day, I think any investment do have risks and the investor has to know it what we are investing in is the key. So if something that has core intrinsic value I think it is something that personally I would grow and appreciate how I have that ownership because whether it grows or drops like to me is still something that hold true to my value where it is just something that you know as an investment that’s where the danger is. So I do think this correction is healthy in the long run.