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We Need to Talk About NFTs with School of Motion

By Joey Korenman, Ryan Summers, EJ Hassenfratz

Crypto Art is changing our industry, and presents a number of incredible opportunities—and sizable hurdles—for the future of motion design

Even if you don't pay particularly close attention to industry news, you've likely heard of NFTs. Crypto art, led by Beeple and a growing list of pioneering artists, is revolutionizing not only our industry but art as a whole. However, there have been some valid concerns raised over the viability of the market and the environmental impact of cryptocurrency.
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We've scratched the surface… but now it's time to dive deep with a School of Motion panel discussion. That's why we gathered together (virtually) to grapple with this topic and share our observations...plus what we’ve been hearing from artists and studios. We know this won't be the end-all-be-all of explorations, but we want to be sure this community walks toward these changes with open minds and open eyes.
Be warned: We aren't pulling any punches.
This podcast will cover the good, bad, and ugly about NFTs. While we are certainly excited to see members of the community receiving overdue recognition (and huge paydays), we have to be realistic about the longevity of such a volatile market. We also need to address the valid concerns for environmental impact stemming from blockchains and crypto mining.
Our panel will talk about the future of NFTs (spoiler, we think they're here to stay), but also the mental health meteor for artists that aren't seeing the same results on their own work. We want to prepare you for the inevitable pricing bubble bursts as this market changes to something more sustainable.
This conversation is DEEP, and we will not be holding back. Come into this with an open mind, and be ready to disagree. We don't know everything, but we've got a lot of research and experience to share, so take a listen.

We Need to Talk About NFTs

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Transcript

Joey Korenman:
This is the School of Motion Podcast. Come for the MoGraph, stay for the puns.
Ryan Summers:
It's all happening all at once. It's all like, that's why it's so crazy right now. And I think that's why everybody feels like, "I got to get in, I got to get in before it goes away." Because I think we all know it's momentary. We haven't been paid millions of dollars for our work, all of a sudden, here's this blip, how long is it going to last?
Joey Korenman:
Hello there friend. This is sort of a bonus episode of the School of Motion podcast. Frankly, we feel like this is an important topic to bring up at the moment. And that topic, of course we know, you're probably sick of hearing about it, NFTs. Non-fungible tokens. So here's the thing, at School of Motion, we are watching all of this unfold with just as much surprise and shock and interest as everybody else in the industry.
But we also have a slightly unique perspective in that, we are in constant contact with artists, studios, producers and other industry folks from all over the world. And we're seeing some things that are a little concerning. So in this episode, EJ, Ryan and I had a pretty honest conversation about some of the things that we think are amazing about NFTs, and what the future might hold for them, and also, some of the things that are not so amazing. The goal is to simply get these thoughts out there and to maybe spark up a conversation about some things related to NFTs, that seemed to get lost in all of the excitement over newfound fame and fortune.
Whether you're one of the artists who's made life-altering money selling NFTs, or you're considering getting into selling them, or if you're just curious about what the hell is going on, you'll probably learn something in this episode, which should probably come with a trigger warning. So let's talk about NFTs right after hearing from one of our amazing School of Motion alumni.
Alex Hill:
The training I've gotten from School of Motion has taken my animation to the next level. School of Motion is one of the best investments I ever made in my career. The courses are easy to follow and packed with knowledge that can help people at any level improve their skills. All the feedback I received from my instructor really helped me week to week, and by the end, I was amazed at how much I had learned in just a few weeks. Keep it up School of Motion. My name is Alex, and I am a School of Motion alumni.
Joey Korenman:
All right, boys. Let's start just by laying out, I guess for everybody, where our heads are at at the moment. And I think it would be interesting because we all have different perspectives on this, and are interacting with it in different ways. So I'll go first. In general, the way I feel about what's going on with NFTs in motion design is that, there's some pretty amazing things that this has brought to the table which we'll get into. I definitely think there's some really bad things too. And it may not be the bad things that are obvious to people. There's obviously a lot of talk about, is this damaging the environment? That seems to be the most common negative thing I hear about it.
I think there's things that are on a micro level, far more destructive to potentially the careers of some of the artists that are diving into this without really thinking things through. I think reputations are going to be ruined and things like that. So I'm excited and the more I've learned about NFTs, the more I feel like they really are a game changing technology. But the way they're being used right now, that is not the game changing thing. I think we're just witnessing a bubble right now. So that's where I'm at, at the moment. EJ, as someone who has minted and dropped in this space-
EJ Hats and Pants:
In this space.
Joey Korenman:
How are you feeling?
EJ Hats and Pants:
Yeah. I think I echo a lot of that because I'm, I guess, "In the game." But I also, I feel like I make sure I keep myself grounded by surrounding myself with people who are not in the game, some that want to be in it and are trying to sell, and have not sold so far and their mental space is not so great. So I'm sensitive to that and I'm empathetic to that. And then I also know I have close friends that are making a killing. And it's weird I'm texting people like, "Hey, wanted to send you a last text before you're a millionaire." And this is literally things that I'm doing. And I just think for everyone, this is such a weird thing that's happening in our industry. It's really shaking it up like nothing else has before.
And I think we all need to remember why this community, why we held it up before. Because I feel like if we don't tend to that, and I just think the community is going to fall apart and it's never going to be the same. And that's sad to think about that. But it's like what Joey said, it's the long-term view of, how is this going to affect our industry and our community? Some of it is going to be really great, some of it is going to change everything forever in good and bad ways. And it just, time will tell how much of the good and how much of the bad will, how much those effects will reverberate through time. Just [NAB 00:05:17] this fall if it happens, is just going to be really weird.
Joey Korenman:
It's going to be weird and beautiful and there's going to be good vibes in this space. So-
EJ Hats and Pants:
Good vibes in this space.
Joey Korenman:
Yeah. Summers, how are you feeling about all this?
Ryan Summers:
I'm the tweener, I think. I have to remind myself all the time, like in the land of hot takes, context and perspective are the first things that gets thrown out the window immediately. And I think we're living in that right now. But just for a background, the two things I did before I got in motions and are really a conflict right now, because I was a student going to school for chemical engineering, so all the climate change concerns are very heartfelt to me, and I really want to learn more about it.
But at the same time, I also worked at an options trading platform and I worked at a company that covered VC funded startups, so that whole hysteria around currency and evaluations and all that stuff. I feel like this is very much where a lot of my skepticism and healthy sense of trepidation, that's also without warning signs going off. And I think any time, whenever there's huge opportunity, there's also huge costs and huge inequality. And I think we're living in that right now.
There is a huge opportunity to actually dis-intermediate yourself from being just a pawn inside of a studio. But at the same time, there's a huge opportunity to become part of the haves while there are like teeming masses of have-nots. And that's never existed in motion design, to this extent where it's so transparent, when you can literally see what someone sold something for, and then have them tell you what you should be doing to try to be like them.
But then on the opposite side, the people who are buying, "the collectors," a lot of times are anonymous. That's such a weird power vacuum where the people you need to try to get to and knock on their door, you don't even know who they are, where they are, what they do, where their money came from. But all the people who are trying to be there can see what everybody's selling for. It's like the worst aspects of all the different social media and our FOMO as artists wrapped into one phenomenon, which is probably why we're in this gold rush, imposter syndrome, FOMO kind of powder keg.
Joey Korenman:
Yeah. Okay. Well, let's start. I thought maybe we could start the conversation by focusing on some of the good that's come out of this whole thing. And I think the three of us all know people who have become millionaires. Beeple was on our podcast, I think three weeks before he became the third richest artist in the world or something like that. And honestly good for him. I really was overjoyed when it happened to him, I think he deserves it and he worked for it. And he's not the only one though, we all know other people who are literally millionaires now from selling NFTs. They will never do client work again, they've achieved financial independence in a very short amount of time and I think that that's a good thing. Now there are downsides, I think, ramifications of that, but on the whole, I think that the financial opportunity is a good thing for artists. What do you guys think?
EJ Hats and Pants:
I think it's a great thing, this money. But it's interesting to just see... And I feel like every day there's another instance of this where someone sells their first piece. Sometimes it's for a modest amount, sometimes it's for a crap ton that just totally shocks the hell out of that person. But there's a switch that flips in your brain when you do sell that. It's like, Wow, someone put whatever amount of money down on a piece my art that beforehand, that artist might have thought wasn't worth anything at all. It's just something they did, maybe it meant something to them, had a deep meaning, maybe it was just they thought it was cool and looked beautiful or whatever, but everyone was just getting their value off of a client work.
And now, it's this whole nother type of value you can place on personal work. No one was really making money off of personal work before. And I think the moment that someone does, they start thinking about what they do differently. I've seen people get super motivated to do personal projects now. And that's great, because if you could just totally flip the switch and be like, "Wait, I can make money just making whatever the hell I want, I'd take that any day."
And so there's a lot of that, and I think that's great. But at the same time, there's people that are putting stuff up and they have this expectation that this is going to sell because it's... And I've mentioned this on Twitter a few days ago, Gary V always preaches this and it always stuck in my head, is that we used to feel FOMO because of Instagram likes. But the problem with Instagram is, you're only seeing everyone's best day. And there's that lack of perspective. And we're having that same exact thing happened here, only there's money attached to it, in a lot of ways. You can't just post something for free on Instagram like you can on one of these platforms. To put something up for sale, sometimes a gas fee could be 150 bucks or 200 bucks. It's getting pretty crazy.
And to put money down and have your peace just sit there, just flailing in the wind and it... That's like when you put money on the table for your own work, that hits you in your creative soul harder and deeper than no one liking your Instagram posts, because it's visible to the world now. So, and I think Joey you mentioned that before, it is like everyone can see whether your piece sold or not. And that, Argrh! That's awful.
Joey Korenman:
It stinks.
EJ Hats and Pants:
Yeah. So, worth anything, it's good and it's bad. And I think for me, in my perspective, like I said, I have friends that are in it. And they love it and they don't care what anyone says about environment blah, blah, blah, blah. And then I have friends that are different ends of the spectrum, that haven't sold or aren't even interested. But they're just observing it and like, "Hmm, this is interesting." And then there's some that just flat out hate it like, never bring up the phrase NFT to meet or I'll strangle you, Oh my God. And I feel like everyone's in their own little silo and no one's talking to each other. And I feel like that's where the major breakdowns are happening. And that's the part that scares me.
Joey Korenman:
Ryan, what do you think about... The financial impact is one thing that is positive and of course negative. And we'll get into that. But also weirdly in all of this, a motion designer is like the type of artists that's geared to do well selling these things. And I was thinking, how many licenses of cinema 4D has this thing?
Ryan Summers:
Yeah, exactly.
Joey Korenman:
They must be selling hotcakes. But I think it's brought more visibility to our industry. I'm curious what you think.
Ryan Summers:
Yeah. I think that, again it's a unique opportunity. I think finally, once and for all, the genie will never go back into the bottle about motion designers being able to value, not their skills or their ability to fit into a pipeline, or their ability to get a deadline done, or their ability to double-book themselves or whatever that might be, it literally is, what ideas do you have? What kind of concepts do you have? What stories do you want to tell? What imagery do you dream of? And you can make yourself. I think that's great because I think, you just said it before, there's real-world value that you ascribe to yourself, not to what you can do for someone else, finally. And I think, for whatever reason, the fact that motion designers can make moving imagery that fits this "Collector's" idea of what's cool for now. That's awesome.
I just also feel like there's this, I'm going to be the tweener of the whole time, there's also this backlash where I'm also starting to feel like there's people who are looking at the collectors and seeing what they're collecting, trying to make their work fit into that. Which to me, that feels like we went from, "Hey, this is a great way to support and elevate artists as a community to make them financially solvent," to Client 2.0, in the matter of like a month or two. It's amazing how much when you stick money into any creative scene and you see the haves and the have-nots. It feels like the same thing I experienced with the comic book industry when there was a huge investor collector influx. It's the same thing that happened.
I was in Chicago when the grunge scene in Seattle blew up, and Chicago was anointed as the next city. And I watched the music scene basically eat itself by chasing, the smashing pumpkins got signed. And then everybody else wanted that piece of the pie, the exposure, the money. And it feels very similar to the community, what the community is going through. There's people who are like, "Screw that, don't go for the money, stay true to yourselves." There are other people who are like, "Go for the money, but just don't sell out by changing what your principles are." And then there are other people who are like, "Just stay away from it completely. You're awful." And that scene in Chicago never really even fully recovered. It took like a decade for it to just feel...
Comic books, the same exact thing happened. It took a decade for it to bottom out and then rebuild itself around artistry and voice and all that stuff. So I'm just very trepidatious. I'm just very cautious because I also think, when you tie all these things, I think there's a lot of pretty flowery words being used right now like I think collectors. And this is again me being in a VC funded world that's full of hype and gimmickry and sometimes bias. But I look right now as collectors, as much as people like using word, those are investors, and I look at the platforms as brokerages. Because all of this is still tied to a very theoretical, very volatile currency that a lot of us have very little understanding about it.
And maybe we have a little bit more, because we've made a lot of money off of it, but we still are not preparing ourselves for what that currency can do. How many people still have or are holding onto Ethereum for whatever reason? What happens when that Ethereum has a 40% volatility drop? Does everybody run away? Does everybody cash out? Do the collectors stop collecting? Is it the opposite? Do collectors double down and buy stuff on the cheap hoping for a bounce? All those things have very little to do with your artistry and your voice. So it's a really interesting time. We're literally at the very beginning of it, but there's waves coming.
Joey Korenman:
This reminds me of a lot of different things like the... I've been trying to put my finger on it. I think Gary V nailed it because he compared this to the dot-com bubble where, probably a bunch of listeners were younger in '99, 2000. When that really happened, maybe they weren't aware. I was probably 18 or 19 when it happened, so it's vaguely on my radar. But essentially, you had companies like Yahoo, as a good example, building real business models on the internet and doing e-commerce, which was kind of a new thing, and making tons of money. And so everybody was like, "Whoa, this is a new thing, I want in." And literally, there's very famous examples of companies. Pets.com is a famous one where they bought the URL, pets.com, and didn't have a business model, but investors didn't care and they pump millions, maybe billions of dollars into this thing.
It went to zero because it was just, there was no point to it. Everyone was just buying it because they thought they could make money. And I think if you do this thought experiment like when Beeple, he's been doing some random drops and sometimes he gives the proceeds to charity, or he'll drop things for a dollar and then whoever wins that lottery ticket can then resell it. Do the people buying the Beeple's, do they care what the images is? Are they actually looking at it before they buy it? No. It's a stock. And Beeple is the extreme example. But even some of the artists that we know, they did an amazing job generating hype before they dropped this artwork. I don't think it mattered what the artwork was. I really don't. I think it could have been anything. And I think a great example is someone just paid $800,000, for a red Pixar. And it was great. The title of it was like, Digital Primaries. So maybe there'll be like a series or be blue one next.
EJ Hats and Pants:
Can't be.
Joey Korenman:
Would the person who bought that not have bought it if it was blue? I wanted something red. No, it has nothing to do with the artwork. So to me, that's the thing that I've started to wrap my head around like, okay, this isn't really about art right now, for the most part. And of course, for some people it probably is. And I don't think the artists in our industry, most of them, I don't think have really grasped that yet. And they're acting as if all of a sudden there's people out there that really value motion design artwork. And so much that forever, they're going to pay $5,000 every time there's an animation disrupt.
So let's get into some of the negative stuff here. And I want to stress for everyone listening, this is just our opinions, of course. And we could be proven wrong by all of this, but history does tend to repeat itself. And there's really a lot of echoes. Some of the things Ryan was saying, it really does ring true. And one of the things that I've noticed that, it's like the saddest part of this, is the depression and the FOMO this is triggering. And EJ, I know you've talked to artists that are struggling with this right now.
EJ Hats and Pants:
Yeah. It's kind of sad because, like just what you just said, the value, it's so arbitrary. And I think one of the major problems that's really messing with everyone's heads is that, who gets a winning lottery ticket of an offer of 15 Eth on something, and someone that isn't selling it all. It all seems so arbitrary. People that are looking at art, that's like, "Oh, that's shiny sphere-like. And it's making how much?" It's the whole term low effort NFT is a thing, and for a reason. Because it's almost like... And again, it's all because everything's so transparent that I think it's weird. Because I would guess that this is probably gone on as far as motion design forever.
When I used to live in DC, I knew a few artists that would work for government agencies or whatever. And they do the most low effort thing because that's what they're asked for, but because it's the government or it's discovery channel or whatever. They have a massive budget, so it's just like, "Yeah, here we need to get rid of this money or we won't get enough budget next year." So they're making tens of thousands of dollars for the easiest projects. So it's like that's been there, but this is like everything is an extreme example in the NFT world. I won't say space. But but I think that-
Joey Korenman:
We need a bell to ring every time someone says, space.
EJ Hats and Pants:
But yeah, so that's weird. And I think if that arbitrary, that arbitrarity, is that a word? I think if that was removed from it, I think everything else would have been way more understandable. But it's because of that X-Factor, that's why you have people just begging everyone in their DMS for a foundation invite because they feel like it's a golden ticket to just easily make a few thousand dollars. And that's not how you should be thinking, you shouldn't be thinking this is a get rich scheme. But it's not the artist's fault-
Joey Korenman:
No.
EJ Hats and Pants:
... that that's how this is viewed. And I think that's where we need to really keep in mind. Is like none of this is our fault as an industry, it's things are being done to us and we're blaming each other. And that's where things fall apart. And I think we-
Joey Korenman:
It's human nature.
EJ Hats and Pants:
It's human nature, a lot of people don't help themselves. When I mentioned before, one of the great things about this, is people are changing the way they think about their work. They have more confidence in their creative voice and their ideas, and they finally are getting reimbursed for that value they bring to the table that they never would have, working at a fixed rate at a studio or whatever. And that's great. But, at the same time, there's also a lot more people doubting their own creative voice. Like Ryan said, people are looking at what collectors are buying, what these investors are buying, and they're like, "Well, I don't do any of that." I feel like what I do is a perfect example of that.
I don't do skull renders, I don't do futuristic Cyberpunk stuff. I make characters with giant eyeballs on it. And if anything, from my perspective and just the type of work I like to do, I've seen other character artists doing pretty well, not amazing like not compared to the futurism a surreal kind of stuff that's out there. But I've seen some characters that are doing really well and if anything, through all of this, it's made me strike up conversations with these people, or those people have reached out to me wanting to get into NFTs and just asking what it's all about.
And I think it's like a door opens, another door closes. I'm talking to a lot of people I've never talked to before, and a lot of those people are people I really look up to, and that's really cool, but at the same time, and I don't even know how many people am I pissing off by doing this, that I'll never know, maybe at NAB, I'll go up to someone say, "Hey." And they'll just turn and walk away. And I'm like, "Well, they don't like that I minted some NFTs, I guess." It's mainly that artist's mindset. I think we have to keep perspective that it'll be good to just see like it's probably such a small percentage of people in our industry that are really having success, and there's a lot of people that aren't. And that's the perspective we lose, that's the perspective in all of these Clubhouse chats that I've going on where everyone just thinks everyone's doing amazing. And that's not the case.
Joey Korenman:
Yeah. I think, and Ryan, I'm curious to your take too. I know we've all spent some time in Clubhouse, and if anyone listening doesn't know, Clubhouse is the new social media platform based around audio. It's actually amazing. I think it's brilliant. And there's been a of talks. You basically go in, and there's a panel of people that are talking and then an audience, and there's a lot of these about NFTs. And it's always two or three very successful artists who've made seven figure selling NFTs, it's a collector or two, it's an art critic, it's someone involved with one of these platforms, maybe the founder of OpenSea or something like that. And most of the time you're hearing about how amazing this is. And that's called survivorship bias.
And I think, like EJ was saying, it's human nature. Essentially what it feels like a little bit is, a lottery descended upon motion design, and so sure buy a ticket. I totally get it. I think really the thing that worries me is, people not recognizing that it is to some extent, a lottery. And the lottery is going to go away in about six months to a year, I think. And what's left on the other side of that if you've burned a whole bunch of bridges, thinking that you never have to do client work again or interact with the community. Yeah, so go ahead Ryan.
Ryan Summers:
I've been firsthand seen the kind of that other side of it. I think that a really interesting good question is, what are all the studios and agencies thinking and doing about this right now? And just tangentially, anecdotally actually from my side, I'm getting calls from studios 24/7 asking me for names of anyone that does 3D. Because in some ways it's great, because the value is there. The high-end, the people who have been working for a long time have worked that theoretically is interesting to collectors or investors. And they're taking their time and it's what we always said, they're booking themselves. You give yourself first hold, and now the first hold is become a booking, you're booking for NFT collectors.
So in some ways it's interesting because it's, even for non NFT participants, there's a huge opportunity that has opened up, that people who would normally not be considered for staff, or agency jobs, freelance staff, are getting calls. And in some ways, that's good, it's a hole that's opened up with that, maybe it means that rates can move up, maybe all of a sudden because there's more people there and there's more of a demand. The supply is even lower than it was before. You can charge more, or you can be more selective about what you work for, or you can get a shot at being more senior than you maybe would have right now. And you might be able to make it two or three or jumping your career just because of this moment in time where there's just not people available.
On the flip side of that, studios are also watching and studios are taking notes at the same time. And I wouldn't say that people are being blacklisted, but I've had more than one studio say that they've had people on hold, they've had people booked and they've been ghosted. They've just been just ignored. Whether it's not returning a phone call or not completing a project because there's this gold rush, "I've got to get there. If I don't hit my stuff this weekend, if I don't have my hustle, if I'm not doing my marketing, I'm not in the clubhouses, I'm not looking for collectors. I'm going to miss out on the million dollar ticket." And people are just disappearing. It's not happening everywhere, and not everyone's doing it. But there is a salty taste in some of the studio's mouth just about this whole thing in general.
And then when people get out and say, "I'm never going to do client work again," or even more braggadocious about what they think about doing that type of work, like they've retired from the industry. If it does bottom out, if it does just turn into a Kickstarter or a Patreon, where it's a platform to create patreons, to create fans and create supplemental income, or take the work you do for your one a days and make it a way to become passive, that's all awesome. But what happens for the people who've been saying like, "Screw the way we've been working for the last, how many years." That's also being watched.
There is almost, to a certain degree, a certain sort of mania. It's almost like there's like a zombie virus going on that's just caught fire, and some people are getting effected by it by just wilting, just feeling the pressure and just being like, "I don't know if I want to do anything anymore." And then there's other people are going the opposite direction, but the same amount of, I wouldn't call it hysteria, but the same amount of, "This has changed my life and it's always going to be like this." That is an interesting perspective that I don't think it's talked about very much right now.
Joey Korenman:
Yeah. EJ, I'm curious because I know we've talked about this at School of Motion. What Ryan's talking about, I think that's a really obvious bad thing to do, is to burn a bridge with one of your clients because you think, "Oh gosh, I'm never going to have to work with this person again because I'm about to go get rich selling art," which I think for the vast majority of artists, is not the case. But also, we are a very close knit industry, and what is this? I rifts like there's obvious ones between the people who are worried about the environmental impact, and those that are selling NFTs and not concerned. But I think there's some other kind of weird dynamics happening too where I think on the other side of this, there will be artists where their reputation won't be the same. What do you think about that end of it?
EJ Hats and Pants:
Yeah. Yeah, I think there's, like I was mentioning in these Clubhouses, you'd go in there and you're just like, "All these people are delusional." I think one of my biggest issues with all of this is, I know far too many people that just, they make one sale and they're like, there's this sense of entitlement in them now, where it's like they cashed out, they've made like 20 grand on their first drop and, Holy crap, that's amazing. And you're like, "Good for you, man, blah, blah." And then the next drop they do, it's sitting there for five hours and they're like, "What the hell! Why am I not making another 20 grand?" It's like, Whoa.
So there's a lot of inflated egos, there's a lot of people that are... It's like any type of... You're going to have your people that are too full of themselves, you're going to have the people are in the middle and then they're going to have the super humble people. And I've seen a lot of humility, I've seen a lot of people that are just really getting high on their own supply, I guess you could say.
Joey Korenman:
Sniffing their own farts.
EJ Hats and Pants:
Yeah, just really like, do you smell it? No, you don't smell it after you're in a house for that long. So there's a lot of that. I just think a lot of the problem is lack of perspective and lack of empathy. And one of the things that bothers me about this space is-
Joey Korenman:
Ding, Ding, Ding.
EJ Hats and Pants:
... is the things that people are doing that turn other motion designers off, that they solely do because apparently it's more attractive to collectors. So all of a sudden, all of these people are throwing caution in the wind, and just not even caring that they're pissing off everyone else in their Twitter feeds. So, an example of that is, the reason why you see all this hype, the reason why you see people listing the bids that they're getting, the reason why you see people re-tweeting all the time and the reason why you have people pimping everyone's other work and tagging collectors, and sucking up the collectors. Is that is what the people that have sold a lot are saying to do. And that's what collectors, from what I understand, are also saying like, "This is what we look for."
So, we're totally doing all of this stuff, we're listing prices which like, do we list prices of... I always like to relate this to if it was a client job. If we landed a job and some amazing artists, Ariel Costa, or somethings like, here's some work I did for Microsoft. By the way, I made $100,000 on these suckers. You're not doing that. It's about the art, they're showing the art. And I wish it was more about the art and less about the money, the price attached to it. Because I think there's a lot of, and I think we see a little bit of this, where people are wasting work and it might be an old piece. But they're also telling a narrative that's like, Wow, I didn't know that this person made this at a really tough time in their lives, and they just hold up and learn some new stuff. And that's what got them through a difficult time in their life.
That's super cool to learn about one of our friends. I think there's some of that that's just totally made up. Like, here's the sphere, and this represents my, The Duality of Man, and blah, blah, blah. But I always like to... Like, if this was client work, would you do this? Would you post something on Instagram like, here's some work I did. And then if immediately a client didn't email you a few hours later, would you just be beside yourself like, "Why isn't a client hitting me up? I posted this work, I think it looks great, blah, blah, blah." So I just think that's... if you relate it to how this industry was before, it's just ridiculous. Post tweeting saying, "For the love of God, will someone hire me?"
Joey Korenman:
I'm sure that exists. And Ryan, I want to get your take on this, Ryan, because this is one of the things about this that's is really foreign to me. I've learned a little bit since all this started, about the traditional fine art world and how this relates to it. And one of the things that I've noticed, and I didn't know why it was happening, but now I get it, is exactly what EJ said. Your client becomes these collectors. And they're not buying the pixars, they're buying the story. It's bragging rights basically. And so you have to put on this persona for them in order to really be successful. And I've seen artists that all of a sudden, they're talking as if they're Damien Hirst, or something,
Ryan Summers:
Well, they talk in a way that everybody normally makes fun of creative directors talking when they pitch, like that persona you have to put on halfway, but it's just for the moment. Or like, "Oh, you have to do all this fancy writing, you have to be eloquent." Now all of a sudden, it's like, we're literally seeing people change their names to capture this new persona. It's a unique way of like approaching something we never used to do really well.
Joey Korenman:
On the one hand, I think that there's real value there, whether anyone listening gets the value of buying a grid of 5,000 images for $69 million, somebody found value in that. And spending $25,000 on a looping GIF with some audio. There are people that want to buy that, and they get true value in some way from being able to publicly, in an ostentatious way display their collection and all of that. And that's cool. And if you can turn yourself into the artist that they want to purchase art from and make a million dollars, that's awesome. And really, seriously good for you. I wouldn't be able to do it. And I've watched Beeple, and some of my friends do this and I'm like, "That's amazing. It's incredible." The issue I see coming, is artists who try to do that.
Ryan Summers:
Yeah. Exactly.
Joey Korenman:
And most who try, will not make a living for the rest of their life doing that. It's just, I don't think the money will stay.
Ryan Summers:
No.
Joey Korenman:
And then what?
Ryan Summers:
Yeah. I think that's where I am. The movie exit through the GIF shop is actually a really salient-
Joey Korenman:
It's perfect.
Ryan Summers:
... movie to watch now for anybody who's just out on the sidelines, they not get it. Because it gives you a peek into... We always say we should think of ourselves as artists more than just like people who are making stuff. Christo, years ago made the bricklayer comment, we all got upset and we're like, "No, we should think like artists." And there's really just a handful of ways you can start to do that. You can be an artist who explains your process and you sell products. Let other people do that. You can be an artist who tries to tell a story by doing animated shorts, or make a comic book, or do a podcast, and you create fans. Or, what we're really entering into is, you enter into the art industrial complex.
Art is an industry that is a business that is tied to money, that is tied to all the other things. And we have an even more complicated version of it because it's also tied to this currency that's super volatile and not fully understood and not really sanctioned anywhere, and the same in different places. We're not even mentioning the fact that this entire NFT craze is completely inaccessible to a large portion of the world, because they can't even get into the game and get to the currency, to even be able to do it. So, that is a whole other argument that it's not creating an equal play field just because of that alone. But if you start talking about like the art industry or the art industrial complex, think about graffiti and think about Banksy. Someone deemed that Banksy's worth was sky high because we didn't know who it was, we didn't know the story. And is it a real Banksy or is it not a real Banksy? Where did he come from?
And someone somewhere elevated that. It's not hard to say that Beeple, whoever it is that's doing that, whoever's deeming that value and trying to auction things off, that that isn't the next thing with Beeple. That there is a gold rush even on the art industry side to say like, "Okay well, here's Beeple, who's the other Beeple?" There's a Banksy, there's two or three other people like that, are they real artists, or are they people who are going to chase it and manufacture that to catch that heat? Because if you can create that, now all of a sudden, everybody who's doing graffiti could be a millionaire. It's the exact same thing motion design. Here's this latent field of really talented, really passionate, really lurking confidence group of artists, that are just primed to be taken advantage of, primed to be, sell the dream and then make money off of everybody chasing the dream.
Whether or not that's actually what's happening with everyone, there definitely is a certain amount of like, sell a dream and then find all the platforms or brokerages or exchanges to allow people to create more, sell through more volume, more exchanges to then make it bigger and bigger. And then where it goes, who knows? Does it stabilize? And now it's just this stable platform built on occurrence that people understand, or does it just, Poof, and disappear for the next thing and the next thing? And then everybody's left holding the bag.
I don't know, but I think it's important to just look at, if you do want to consider yourself an artist, look what other people in other industries that have had a similar kind of boom, and then crash, have gone through. And at least try to learn the lessons from that. Learn the financial lessons, learn how to guard yourself emotionally, understand the struggles that they went through because it's the exact same thing that we're all dealing with. There were communities of artists inside graffiti that all turned on each other as they all chased. Whatever industry that money comes into, that's an art based community, there's lessons to be learned. This has happened before.
Joey Korenman:
Yeah. And like Seth Godin, Gary V and Christo, actually just put out a really great video on all of this, and offered his opinion up. And I think I'm right in line with him basically, and we'll link to it in the show so everyone can go watch it and hear it from his mouth, but basically what he said was, if you can... This is a unique time, this is a bubble. I don't know if he used that term, but Gary V and Beeple have called this a bubble too. And the bubble is, the demand for these things, these NFTs, is nuts. It's driven by a gold rush, I think. It's not driven by everyone realizing all of a sudden they really want to own digital art. And when that pops, somebody will be left holding something that's not worth anything anymore. And that's going to feel pretty shitty.
Ryan Summers:
And there's a track record with cryptocurrency, not necessarily associated with NFTs or art, but cryptocurrency has huge positives and huge opportunity, but there have been in the past, cryptocurrencies that have basically cratered or disappeared. And people have literally been left holding investments that they have no idea how to do anything with it, how do you actually access it, convert into fiat, do anything with it. Not that that's going to happen here, but you're living in a world where it's all unknown right now, and it's all rapidly changing. We could put this out and two days from now, half of what we talked about can be invalidated because something new happen.
Joey Korenman:
Yeah. So EJ, there's a lot of common, I guess, criticisms of this that get thrown out, especially on Twitter. And why don't we talk about the environmental one, because I think that's probably the one where people have been making the most noise about this. There's been the articles written on both sides. I'm curious if, what you've learned about that end of it.
EJ Hats and Pants:
Oh yes. The dueling medium articles from people we've never heard before, that have an agenda.
Joey Korenman:
Exactly. Yes.
EJ Hats and Pants:
So, I don't know. I'm on the side of, I sure there's an impact. There was a video that came out that basically, I think the number they're attaching to the actual, not even NFTs, but the ecological impact of just cryptocurrency is like 0.02 of all emissions or something like that. And then NFTs are 0.006. And I don't know how they get these numbers or whatever, but they weigh it out in a way where it's like, this is actually really small. And I think the problem with all of this is the transparency. We don't know for a fact how much emissions are attached to Amazon, how much emissions are attached to Dropbox. Apparently Dropbox is terrible for the environment, but people aren't naming and shaming people for using Dropbox.
So I think people are just attacking the NFT thing. And yes, it uses electricity, but so does rendering, and we do that all the time. You'd be shaming someone because they worked on a personal project that took three weeks to render, and that's a lot of electricity for something that they're not even making money off of, they're just posting something on Instagram. And-
Ryan Summers:
Did you watch the new justice league? Because I wonder how much that costs to render all those $7 million [crosstalk 00:42:00].
EJ Hats and Pants:
Yeah. How much did that cost? Are we going to boycott Pixar because you think you use a lot of render power. Buckle up, cowboy. because they have a lot of computers over there at Pixar, and they're rendering a lot of render-intensive stuff. And even the energy attached to things like, Okay, if you're rendering and you live in an area that it's all coal plants and crap, that's way worse. Using electricity in whatever capacity you're using electricity, that's bad. You could also be living in Washington state and it's all hydroelectric and very clean. I know there's a render farm up there, a Pixar plow. And they have some of the lowest rendering rates because their electricity is so cheap and so clean. So not everything's made equal in that respect.
But, there are just different sites popping up, that run off of clean cryptocurrency. And my question to you I guess, both you Joey and Ryan is, if everyone just tomorrow, everyone flipped a switch, everyone's just selling off clean NFTs, is everyone just going to be okay? Or people are going to still have problems? I think I'll bet that everyone's still going to have a problem. And I think a lot of people, they see the medium article, they already hate it, they don't understand it. I've seen that, because I wrote an article on School of Motion and people were hating on it already and they didn't know the ecological impact.
It's just another thing they can pile on. And I think if we get to the real issue, that's when I think we'll actually make some headway and have a conversation about it. But I don't see any conversations being heard, I don't see anyone... It's just naming and shaming, and you're just not going to have a conversation if that's going to be the way you approach things.
Ryan Summers:
I feel like it cuts to the core of any, again, any creative arts field or community where success is found by few, but it's rapid and it's hard to understand why they got the reward or they won the ticket. There's the eternal question of selling out, it happens everywhere, we see it over and over, obviously music, you see it in film. Someone makes an indie film and they get hired to make a marvel of it, they sold out. You see it in video games, you make your own personal indie, one man crew video game, and then you sell it to Microsoft, and it makes $4 million, a year sell out.
That is like I think, to a certain degree, like you said, once you get past the ecological impact, if a flip does get switched or whatever happens. Ethereum is no longer the currency dejure and there's a clean currency that everybody jumps to, for whatever reason. How many people find a new reason that they didn't stay before to be against it? Is it because they never were going to participate anyway? Is it because they think it's wrong to try to sell your art for hundreds of thousands of dollars or millions of dollars? It's a loaded conversation.
I think the ecological argument gives an easy out, a legitimate out, like a legitimate out. I'm not going to do an NFT until I have a clean option. I've just made that personal decision. I would love to, I think it'd be very fun to try to express your own art and find a way to do it and encourage others to do the same thing by an example. But for me personally, but if that flip gets switched and there is a viable way, I'll do it. But will other people find a new, I think you said that, what if other people find another thing to be against it without understanding the full spectrum of it?
EJ Hats and Pants:
I'm in it, and I've made money off of it, but like I am also, self-aware where I know I'm annoying probably a lot of people, every time I post like, this is my new drop, blah, blah, blah. So, I see things that annoy the hell out of me that have nothing to do with the ecological costs, and so I've realized that.
Ryan Summers:
But EJ, let me ask you a question though, if you were doing the same thing, same amount of whatever you want to call it, spamming, shilling, promoting, whatever term, marketing, hustling on that side. But what if-
EJ Hats and Pants:
We try to make it marketing and do a little mini tutorials. So that's my little spin.
Ryan Summers:
Yeah. You're giving back while you are doing it. But if you're doing that for a kickstarter or a Patreon, or you're doing something where you're using your characters and you're creating a product, do you think you would get the same blow back? Do you think, within the motion design industry, would it have the same amount of trepidation and the same amount of people pushing back and saying, "How dare you?" Or "You're on a cancel list now?" What is it about the NFTs that's creating this massive amount of pushback or loud pushback? I don't know if it's massive but loud pushback from some people.
EJ Hats and Pants:
I think it is because of... I know the one thing that annoys me is like, dude, great for you, but I don't need to know that you just made an insane amount of money on that. And I was already feeling FOMO before, and I was already questioning my like, should I make a skull render, I guess? Because I guess that's what these collectors want. And it's like you really start to question "Oh, I'm not valuable now because I don't do a weird thing like that person just did."
And so you can feel depressed, you can feel angry, go through all the emotions. But I feel like I've started to see this a little bit more with some people where, like I said before, I want to hear more about your art and not the price attached to it. I think if it was always about the art and focused on that, and the techniques, and the software use or whatever, I think there would be less of an issue. But I think because there are certain group of people out there, that all they do is they post their video and all it is, available on this, reserve is this, hey collector, tagging collectors. And that has no value to our community because we're not buying it. They're not marketing it towards us. It's of no value to us.
But if it was something where it's like, Hey, this is listed on this site, not even going to mention the price, but I'm going to tell you how I... Here's some behind the scenes, here's something I realized through this process, here's some influences. Just showing us a little bit of the story. Because, I think it is cool to learn a little. I've learned a lot about some of the people that I looked up to in the industry, some negative, some positive where it's like, "Well, I didn't know that about you, I didn't know that you had a background in fabrics," or something like that. And that's really cool that that influences your work. So I love hearing stories because a lot of us are just... You don't get to know a lot of these artists outside of just what we see them post on Instagram. You don't know the story, their story. And I think that's cool. And I think if everything just kept more about the art and less about the price and tagging collectors and the shilling, I think people would have less of an issue.
Joey Korenman:
Ryan, I have a question for you. I think because of your background, you'll be able to answer this. And this might be a little bit conspiracy theory too. This is a little tinfoil hat, but I've read some articles that suggest this, and it actually makes sense to me. There's so much money being put into this right now. It's insane. And you really have to wonder, why are these collectors doing this? And I know that in the real world, in the fine art world, collectors do this actually as an investment. You buy a painting, you don't even hang it anywhere, you stick it in like-
Ryan Summers:
You have an warehouse.
Joey Korenman:
Climate controlled warehouse or something.
Ryan Summers:
Exactly.
Joey Korenman:
It's like tenet, the end of tenet. But if you buy a painting in dollars, and that painting is worth a little more and you sell it. Cool, you made some money. With crypto art, there's this different dynamic, you are buying it in Ethereum, and then if there's a lot of demand and more people want to buy, the price of Ethereum goes up. And so you can actually win both ways. You can buy an NFT that might appreciate, but even if it doesn't, if you own a lot of Ethereum and you've created this hype around it, the price of Ethereum goes up, which that's a different dynamic that doesn't exist, right?
Ryan Summers:
Yeah. That's why I keep saying, when we are getting caught up in these beautifully, emotionally loaded words of collectors and platforms, things that feel safe, things that feel new, things that feel clean, but really if you replaced every time we said, collector in this, with investor, and every time we said platform with brokerage, like a brokerage, a stock brokerage, an options trading brokerage, then you really feel like you can really start feel like Ethereum is the thing that's at play here, the artwork is just a vessel for that. And I think that's why initially, the initial skepticism we always heard was, okay, there's some kind of ecological damage, we don't know the true number, but also is this money laundering? Not even Ponzi scheme or like Pyramid scheme, but is this a way just to stick your money somewhere under the guise of a collector, and it being art, and there's different tax write-offs and different way. And it's just going to sit there, hoping that it gets to a certain place? And then-
Joey Korenman:
It's more like a pump and dump than a Ponzi.
Ryan Summers:
But people who love crypto will get mad at me because there are so many great things about NFTs and just cryptocurrency in general. But you can't fight the fact that there has been a dark nefarious side at times with crypto. And I'm not an expert in every single angle, but it doesn't take long to start researching cryptocurrencies and ICOS and all this other stuff to see that there's something else at play. And now we're caught into it because of the emotionally loaded, "You have value as an artist, you never had that before. Don't you want to be an artist? You said you're an artist, but have you really felt like one? Now you can be one. And there's this pool of anonymous people with lots of money that want to collect your work." Where were these people before when they could just have called us and commissioned work and had a literal one of a kind on a wall of people.
Why does it take people doing [neo however 00:52:13] many of those for 13 years and putting them on a tiny little montage for it to have value of $69 million. So, I think there's a lot of worthy conspiracy rabbit holes to go down. How did the Clubhouse seem to come out at the same time that we needed to have an engine to churn all of this interest, with other people who are VC funded tech guys, that are also the same ones that seemingly are suddenly interested in art all of a sudden. But only digital art that is only transferred in NFTs or Ethereum.
Joey Korenman:
On blockchains.
Ryan Summers:
Yeah.
EJ Hats and Pants:
And those people can be anonymous.
Ryan Summers:
They're the only ones who really... You can be anonymous, I guess as an artist too, but it doesn't seem like it has a lot of benefit if you're trying to promote yourself and find things. But the transparency is really heavily on artist side. We carry the psychological burden of the transparency, but the collectors or investors seemingly, the platforms themselves, don't have to be fully transparent. And if you really start getting into their terms of service and the, I'm not an expert on this either, but the technology that's riding behind these platforms, it starts getting into a slippery slope in terms of, what are you really buying when you buy the NFT? Are you buying the NFT? Are you buying the token? Are you buying the Pixars? If one of the platforms disappears and someone buys the URL for OpenSea or something. They go bankrupt because somebody made IP, that they got sued by Disney's lawyers and they had to shut down or whatever happens. What happens to all of that?
There's a lot of arguments about the stability of the platforms, ability to sustain the imagery and the ownership beyond the lifespan of that one company, all that stuff. It's all happening all at once. It's all like, that's why it's so crazy right now. And I think that's why everybody feels like, "I got to get in, I got to get in before it goes away." Because I think we all know it's momentary. We haven't been paid millions of dollars for our work, all of a sudden, here's this blip, how long is it going to last? There's a bunch of different ways it could go away. The collectors could go away, the platforms could go away, Ethereum could evaporate. There's a lot of different ways, it could get shut down because of IP restraints. So it's like, I get why people want to get in. Joey, have you felt for a move to make an NFT?
Joey Korenman:
No. I'm in a different situation. The way I look at it, I'm a human and I'm an entrepreneur and I totally get the desire to buy a lottery ticket and try to make a lot of money. And those things I've done in my password that were similar like for a while I got into day trading, because I thought, "Oh, this is cool. I knew someone who day traded and did really well." And I felt, "Oh my gosh, look." And they told me that it's easy. Well, no, it's survivorship bias. They got lucky, is what they did. They bought a, I forgot, [chipotle 00:54:47] at the right time or something. So I've done silly things like that. In hindsight, that was silly, I shouldn't have done that. I lost a few thousand bucks. What's worked for me is grinding, sticking with it. And look at the number one artist in crypto, how did Beeple get there? It's not by being lucky. He's lucky that this moment in time happened 15 years into his every days, but other than that, he's worked literally every single day for 15 years, and managed his artist persona better than anybody. I mean like-
Ryan Summers:
Oh, my God. Yeah. He didn't craft the story, he had the story. There's a reason why Christie's and all these other people found Beeple. He, we talked about positioning and branding and marketing all the time. He was doing all. He doesn't make it seem like it on the surface, he makes it seem like he's the, Oh golly gee shucks I can't help it, I just got to make my art everyday guy.
Joey Korenman:
Yeah. He's brilliant.
Ryan Summers:
But slightly under the surface, there is a mastermind like computer brain working there on all the stuff that has nothing to do with the art. That side is probably the least talked about side of his brilliance. But I think it's also part of the promise, people are like, well, people made a one a day that's super easy to do every single day. He just showed up, but I work every day. I show up and go to work for a studio and a client and agency. And EJ, I'm sure you see it, but the amount of people that like, "I've put my time in, I deserve this, where am I sales? I'm not finding my sales."
EJ Hats and Pants:
Yeah. Yeah.
Ryan Summers:
And then coupled with the number, if they actually even do make a sale. I've seen countless Twitter threads or medium articles where people like, the scale... I think people don't understand the difference between 20,000 and a million, let alone like 69 million. Just the scale of that difference. So like I spent $70 on gas fees and I sold it for $80, what was it worth? What are my taxes going to be? I'm going to lose money on this? That's again, there's just this gold. It's like a tulip fever back in the day. Tulips were rare and all of sudden people started buying them, and then they weren't rare, there's a crash. It feels like it has the potential for all of that, but you don't want to say it because artists are finally feeling good about themselves, or seeing the potential to be good about themselves. So you don't want to like squash it.
Joey Korenman:
I want to hear it. So this is something that... And we joke about it almost every day now, but one of the things... And just to tie a bow in my little conspiracy theory, I'm not saying, I'm not insinuating that that's actually while this is happening, what is interesting is a lot of the behavior we're seeing in the industry and artists makes no sense. And frankly, the behavior of collectors makes no sense. But knowing that there's this extra market force of like, if you own Ethereum and you can make Ethereum go up in some way, by making it more valuable, more demand for it, then you win whether or not the NFT you bought appreciates in price or not. That's interesting and it explains a lot of the behavior. So I just wanted to throw that out because I think people should be aware.
Ryan Summers:
And Joey, you had the complication of Beeple owns a percentage of essentially the fund, the token that he was rewarded with. Right?
Joey Korenman:
Right.
Ryan Summers:
He was given a certain percentage of the, I think it's B20 or whatever. I don't know the specific ownership capability of it, but there was a reward for that. And now as long as he stays in, and that has perceived increase in value, his value increases as well. All parties are tied together at the hip with this. There's [crosstalk 00:58:08]
Joey Korenman:
Which is interesting. And you can look at that as this nefarious thing. After we're done ragging on this for a little bit longer, I want to talk about maybe what this looks like in the future, because I think that same thing could be a positive actually. That could be how this turns out to be the most amazing thing ever. But EJ, what I wanted to talk to you about was, one of the things that we joke about, and it's probably the first thing in this whole saga that gave me pause, is that there's this kind of culty aspect to this, the language people use in this space. I've never heard someone say, in this space before. All of a sudden, everybody's saying it.
I'm so honored to be in this... It's like bending the knee to the collectors and all these kinds of things. And to me, it just looks like pandering to the people who actually have the money to pay for this. Is there something more to it that I'm missing? Because I know you're selling NFTs and you have a lot more friends than I do, selling them and doing well. Is there any authenticity to that? I guess, is my question.
EJ Hats and Pants:
About as much authenticity as someone DMing me saying, "Hey, love your tutorials, you're great. By the way you got that foundation invite." Like[crosstalk 00:59:29].
Joey Korenman:
Got it. Got it.
EJ Hats and Pants:
It's tough. And again, I go back to our perception of this whole space is really, it's the product of the actions of collectors and who we see as being rewarded for whatever. So if we see someone really hyping people up and tagging people and saying, this is the best thing, and recruiting other people to get in, and hosting Clubhouses and stuff, of course. I almost feel like someone brought up this conspiracy theory before, and I don't know if there's any truth to it at all. But it's like, okay, all these platforms, these brokerages, they all gave money to these anonymous collectors and say, "You know what? Pump money into this doesn't create hype to use our platform. We're just to be in this NFT market because we need some hype that we need to build here."
And if you think about it that way, that's the only... I can't think of another explanation for these arbitrary. We're talking tens of thousands, sometimes hundreds of thousands of dollars that are just given to people. We all know people that they sold two pieces for one Eth. It's not bad, that's good. That's about the average, I feel like, for most of the people. But kind of-
Joey Korenman:
Not retiring off that, but-
EJ Hats and Pants:
Not retiring off that, but that's nice residual income. But then a person made a series of three, first two sold for 1000, the third one sold for $50,000. Is that smart? And we're talking like the bids. There was a bid for one Eth, and then the very next bid was $50,000.
Ryan Summers:
Right. Why wouldn't you go two, why wouldn't you go five?
EJ Hats and Pants:
If you're a savvy collector, why would you do that?
Ryan Summers:
[crosstalk 01:01:24] it's investing. It's not-
EJ Hats and Pants:
Why would you bid much higher? So-
Ryan Summers:
If you want to invest, you want that value. You want to be able to say, "Instead of doing a two year long tale of, Okay, I bought this at five, I'm going to cultivate this person's personality, bring exposure to them as an artist, create heat and then maybe I'll sell it for 10. And then in a year from now, I'll still be sitting on two of his pieces that are then worth 50. They want to say, I bought it at one, it's at 50 and have somebody buy it for 100, because it's happening right now. It's almost like houses. It's almost like flipping houses where if you're the first to a market before everybody else, you buy five, you sell the first one, you get enough capital to buy the second one. But by the time you get to the third one, you're there when everybody wants to be there. That's called investing. That's called flipping.
It's not like, "You know what, I have some extra money and I really want to help the plight of artists. And I think if I could elevate these artists, look how beautiful the collection I have that says who I am as a person with taste, and I have an aesthetic quality that nobody else has, go to my Showtime page and see what I collect, I'm really an amazing." That's not what's happening, I don't think. I think people are selling that, I think people are saying that out loud, but when you go for, like you said, from one to 50,000, that's crazy.
Joey Korenman:
So, we'll start to land the plane here. To everyone who's still listening to this and you're thinking, okay, either Joey and EJ, Ryan have lost their minds or whatever. The main reason I wanted to have this conversation with EJ and Ryan and put it out publicly is, there are things I'm seeing that I know are going to hurt individual artists in the long run. I'm convinced that this is a bubble, and not NFTs and not even art being sold via NFTs. That will be around forever. Crypto arts' been around for years, it's just now we're all aware of it.
I think, like that story EJ said where an artist puts NFTs up for the first time, and one of them goes for 50K. And that's not retirement money, but that's life-changing money. And the problem is, that might also convince you, Shoo, maybe I don't need that job, that nine to five job, that's hard. Maybe I can just do this, like sell three of these a year and be done. The bubble will pop. And on the other side of that, there's going to be artists who have been given some really bad advice from people who already made a million dollars and really don't need to do client work anymore.
And that person told this artist, "tell Nike to go screw themselves, unless they give you 50% of what you..." Stuff like that where... sure, Beeple can ask for that, and some of the other high profile artists can ask for that. But the freelancer that happened to have one of the collectors pick them and make 50 grand, do they now get to tell everyone else, "I'm worth this, go pound sand. I'm not going to..." Don't return the studios calls, even though they have you on a hold. That's happening. And on the other side of this, there are going to be a lot of artists, I think, that have to like swallow their pride and say, "Oh, I guess I am doing client work again, because now selling an NFTs worth 500 bucks and I can't pay the bills and doing that."
So I just want to raise the red flag a little bit and say, okay, I think everyone should be cautious and try. Go out there and mint these things if you want to, and good luck. And maybe you'll make a ton of money, maybe you'll make so much. You never have to work again. There are people that have done that. If that's you, sweet. But don't count on it, because I've seen this before. I've seen this movie before, it doesn't end Well for most people.
Ryan Summers:
Do a little research on like crypto currency volatility, look up capital gains taxes, so you understand that, if you hold Ethereum for a little while and it goes up in value, a significant amount, and then you cash it out, you owe money on that Understand the difference between kit being considered a hobbyist by the IRS or an actual professional artists, in terms of not your work in motions, but selling art for your living. That's how you make your money. At least protect yourself in the meantime before a crash or a huge spike happens, to understand what the ramifications of all this actually are. It's not just, sell it, make the money and spend that money.
Joey Korenman:
I think if anything that's good, it's maybe artists are finally thinking about investing in stock markets and stuff. I think this could be a good podcast sometime in the future of just how many of motion designers actually have any retirement saved up or anything? Because I'm seeing a lot of people that maybe, because you have to buy Ethereum, you have to hold Ethereum to sell and buy and transact on these marketplaces. And maybe people are, for the first time, experiencing the rollercoaster ride that is the stock market of star. And that's a hell of a roller coaster, Bitcoin and Ethereum. And a lot of people just like everything else in the NFT space lose perspective. You gotta take the wide angle view of what's not happening just today or last week, but what's going to happen in the future? What happened a few years ago? And just the main... If you just know a little bit about investing, you're not going to freak out about Ethereum. You just know that that's part of the course, this is what to expect. I've talked with a few friends of mine that were legitimately freaking out because Ethereum dropped $100 dollars in a day. And I'm like, "Yeah, it's called a Tuesday."
Ryan Summers:
It's built for that.
Joey Korenman:
That's what happens.
Ryan Summers:
Yeah, exactly.
Joey Korenman:
But it's just if you just know basic stuff about the stock market, it's like you can't time the market, you can't time Ethereum. When I sold my first NFT, it was actually back in October, when no one gave a shit about any of this. And I made one Ethereum then, it was worth $500. Just a couple of weeks ago is worth $1,900. So I'm like, "I'm glad I didn't cash that out." So, my advice to anyone that has Ethereum and has made any money in this, that are debating like, should I keep it in there, should I take it out? It's take the reverse of, you don't time the market, you just average your gains and losses by just putting a little bit of money in the stock market, no matter what the price is. You just put a little bit of money in.
Sometimes you'll put money in when it's high, sometimes you'll put it in when you're buying the dip, but it'll all average out and you'll always get the gains. And I would recommend that if you're freaking out about Ethereum, just take a little bit out every month and sometimes you'll take it out when it's 1900, sometimes you'll take it out when it's 1700, but it'll average out. So don't freak out, it's investing. And if this is your first time investing, try stable mutual funds too and put the money.
Ryan Summers:
Yeah. Buy an index fund for God's sake.
Joey Korenman:
Yeah. Get an index fund, put your money someplace else, start saving for retirement.
Ryan Summers:
Well, you're doing all that really good maintaining financial perspective stuff too. If you can try to maintain some sense of professional perspective as well. Because this happens in the VC funded startup world all the time. A new company comes out of stealth and all of a sudden, there's this whole new vacuum of taste-makers, of gatekeepers, of deal flow like electric cars. Now, everybody who has anything to do with any of that world, all of a sudden, there's a rush to get to the leadership level. And sometimes it's done in a healthy way, and sometimes it's done in a damn the consequences way, which I think that's what you're getting at Joey.
And right now, I feel like we're seeing a lot of the the damn consequences, because I'm going to get to the top while there's no one at the top. And that's what a lot of the Clubhouse world feels like people trying to profess expertise because it made two sales or trying to be buddy buddy with a collector that's bought a couple of things, and then they go away. Just understand you don't have to be beholden to studios and agencies, but just understand that there is some perspective we had at the same time.
Joey Korenman:
Yes. Yes. So, all right. Let's talk about the future of this. So here's my prediction, I think the bubble burst, there will continue to be artists like Beeple and frankly, some of the people we're friends with who have really learned and done an amazing job at being an A, artist in the eyes of the collectors and the art world. And I think that there are people that won't ever have to do client work again, they'll just be artists. And I think that's really cool. I think there will also be a huge number of people who thought that they were going to do that, that didn't. And now they're going to be dealing with a really tricky situation where, hopefully they haven't burned the bridges, but I've already seen bridges burned. It's like there are already people that have been blacklisted by studios.I know this.
So now, this is I think more interesting now, NFT as a technology and Ethereum as technology, opens up some pretty amazing opportunities. So this is what I've been really geeking out on when I learned about it. And so I think that there will be a way for motion designers to utilize this in a more sustainable way. And so I've been looking into it randomly. I got connected with a drummer of a band I really, really liked because he was curious about NFTs. And this same conversation is happening in every creative industry right now, music, the art world motions and everything. And I think things like royalties-
EJ Hats and Pants:
Yes. That's [crosstalk 01:10:46]
Joey Korenman:
... are going to be done through this. So this is a very... I'm glossing over a lot of technical stuff here, but the difference between Bitcoin and Ethereum, from what I understand, Bitcoin is just a currency. Ethereum is a currency, but you can actually embed essentially computer programs in the transactions themselves. It's called smart contracts. And so an example of that, I think is the way royalties work on NFTs now, you sell one, if the person you sold it to sells it, you get a commission from that.
That can be programmed directly into the transaction and it's automated. And so you could also do things like sell your album, but let your fans buy NFTs almost like stock in the album, and have a smart contract where if your album does well, the fans get a little piece based on how much NFT stock they bought. And then on top of that, now your fans are promoting the album for you because they have a financial incentive. And I think with motion design, there's use cases that people could come up with selling motion design stock.
I think once there are devices that are tied to NFTs in the physical world, really high-end 8K screens that in Vegas, lobbies of hotels, and now they can license Beeple's for a month and stuff like that. I think stuff like that is going to be pretty amazing and really cool. I would just stress to the everyday motion designer out there, that right now, yes, you could win the lottery and you could be rich forever. And if you're going to go for it, go for it, but know that it probably won't happen. And on the other end, you'll still have to do work. It's like I can feel the wet blanket. I'm launching it right now.
I won't be able to be realistic because I've seen some things on Twitter where I'm like, "That person is going to regret that, I know they will regret saying that publicly. I know it will come back to bite them.
Ryan Summers:
Yeah. All that stuff is the stuff we're not talking about. It's strange we're getting to the last 10 minutes of this conversation that really exciting stuff is coming out like being able to have a proof of ownership for digital art, like every GIF through some permutation of NFT technology could theoretically be provable for ownership. And imagine the residuals if you made a GIF that has 10 million uses, and you can track that back, the ability to have the residuals tied to it. I think that there's a world where credit cards at one point, were a brand new technology that people did not understand. ATMs and debit cards and all that stuff was a foreign concept to someone who kept a checkbook and wrote out a check to get groceries. And it was like, now no one talks about the underlying infrastructure underneath what drives financial transactions.
NFTs at some point in the not too far future, are going to be, or a permutation of NFTs, will essentially be like that. ATM's will be driven by Bitcoin. You can buy a Tesla right now with Bitcoin. That stuff will slowly change to where it's not this like rebel way of working with money and transferring money throughout different jurisdictions, but it also feels like digital files. Why can't there be a world where your After Effects file can be transferred over through something with an NFT, and people can use the work within it, they can manipulate it. But if it ever gets handed over to the next person to the client, the client hands it off to another agency. Wouldn't it be great to be able to have proof of ownership over that? And when you work as a freelancer, as a studio, you're licensing that work to those people, rather than just saying, "Here you bought my time, here's this," but the time is really just a cipher for the work you made, that you never see anything from.
It doesn't just have to be personal work, it could be like your work shows up in a feature film, that feature film makes $70 million. Well, you get half of half of a half of percent of that. We're living in a world where it's at least traceable now. The infrastructure to trace that and understand where it went right now. And you'd make some sense on the Ether, and people can do whatever they want. That's what's exciting to me is that the future of this has huge implications for the day-to-day lives of artists.
EJ Hats and Pants:
Yeah. I'll go back to something I talked about in the article on School of Motion, that if you're totally new to the NFT space, you don't get it. Definitely check out the article on School of Motion. But it's a lot of just, we're we make all this art, we put it online and we get nothing from it. But the companies like Instagram, they profit off of all of our images. They like, if you read the terms of service, Instagram can do whatever the hell they want with whatever piece you did, could sell, use ads with it and you don't get a dime. So my ideal vision of this whole NFT thing is that hope, I don't know. I feel like all we're seeing is this getting more and more fractured, there's more and more marketplaces. And I don't think that really helps.
I think once this all consolidates to hopefully artist-backed marketplace or something like that, where it's like, it is an Instagram that is mainstream. Because right now it's just so nichey and people just laugh it off, is like, "Oh, it's a JPEG. Why would you buy JPEG, blah, blah, blah." But if we get to a point where it's a NFT Instagram, and every time that we put our work up there, a company can like license it out, and it basically, it's just residual income for the artist, versus we're always getting screwed when we see someone stealing our art and either claiming it's theirs, or using it in an ad. And it's like, "I didn't, Wait a minute." Or copying the concept and using it in their own ads.
I think once it gives power back to the artists, just like with the musician example that Joey said, I think everyone's going to win. And it was funny, I had a conversation with my wife where she's just like, "How is Beeple, he sold a JPEG?" And I'm like, "Well, if you think about it is like, if van Gogh, did art on a computer, how else would he ever make money off of his art?" I think if you just think about it like that, it all makes sense. There's got to be why shouldn't Beeple or a very talented artist make money, or not make money because they're just making pixars on a screen. There's got to be some facilitation to reward the talent that's just happens to be using a mouse or a Wakeham tablet versus a paintbrush and a canvas.
Joey Korenman:
People buy stories. That's what Meta Covin... Who knows, I'm sure that transaction probably has all kinds of layers to it. But it's bragging rights, it's feeling a connection to an artist you like. That amount of money is monopoly money to most people. I can't even imagine looking in my bank account seeing that much money. But there are a frightening number of people where that's really no big deal to drop. I'm sure it's not nothing to Meta Covin, but it's probably the equivalent of like, "Ah I think I'm going to buy like a new guitar or something."
Ryan Summers:
It's investment. It's an investment. It literally is like, he did it for a bunch of different reasons, but was first to do it. It's bragging rights, but it's also being on put like a flag in the sand and say "More people come and do this after me." You're always in history going to be the one who brought digital art to Christie's and made living artists the third most valuable person. And he works on a computer. He's the one who, if he didn't do it, it wouldn't have happened theoretically.
Joey Korenman:
Yeah. The musician that I talked to, the Strammer, I had a great conversation with him about what... He was really looking at it from the perspective of, he loves visual art. He's a drummer, so he's like a musician, that's his art. And he just loves looking at this stuff. And it's so cool. And there was something about what's going on that told him, "All right, I need to pay attention to this." And I watched his... His band actually floated a little test bubble, I guess, like a trial balloon to their fans to see like, "Hey, these are what NFTs are, what do you think about that? And they got backlash instantly. And backed away from it. And I think that, aside from the technology and it's core use cases, the world is also going to have to change a little bit.
I think we're a decade away from things like that being mainstream, where even the idea of like paying for music is weird right now. But that would be a great use case. If you could pay for the music you want and the band gets paid, which is what you want, but also the people, maybe the fans that helped kickstart that album also get paid a little bit. That's made a lot easier by all of this, but it's also going to require people to pay for music again, which is not really a thing at the moment.
Ryan Summers:
But then it's like you said they're not paying for the music, they're paying for the patreonage. That's why I keep on thinking at the end of the day, this becomes another version of Kickstarter Patreon, but it allows people who wouldn't normally have access. If it's all on the open up, and there's nothing nefarious to it, it's just new and we're figuring out how to manage it, then it's really exciting, especially once you get past the ecological damage side of it, and that's figured out. People who've historically not had access to art in general, because they don't have a museum close to them, or they don't have the education, they've never been trained as an artist, they don't have art history. It allows them to have access to the material, but also to participate in collecting if the prices are something that are normal.
Right now there isn't a place for someone to say, "You know what? I really want to go buy a nice piece of art, and I want to put it on a cool screen, and, Oh, what would be cool in my living room? I can have five artists whose work say something to me when I put them in a collection." It's like a visual playlist at that point, where you have pride in like, "I was the one who had the taste to put these things together and look what I made." And it becomes a conversation piece when people come over or you share it online.
That actually is an exciting cool way to bring something that's been so high brow and bring it to everyone. And then it also becomes more accessible for motion designers to find those fans or those patreons or musicians in a way that, like you said, they're not paying for the art, they're paying for the person either to be a fan or to say, "Oh, guess what, if I buy enough of these, or enough people do, you may not have to do so much client work and you can make more art that you never normally been able to."
Joey Korenman:
It's the story you get to tell people, "I helped fund that. I helped that person, I'm connected with them." Honestly, I think that's a beautiful thing. That's what it's all about. The idea of patreons is really cool to me. And maybe this is an easier way to do it.
Ryan Summers:
That's the coolest side of calling it. I've been disparagingly saying a lot of times that this is client 2.0, but in the real world, the best clients are the ones who fancy themselves artists, or they have tastes but they never went to school. And they want to be a part of the process. And they almost hire you, if you're lucky enough to have it. The hire you to be able to say, "Look, I have a need, but I'm also helping you grow, giving you an opportunity or a platform or a product to try something new." And then they're part of your story. Those are the clients that are the best because they want to be involved in a helpful way. Not in a like, "No I'm telling you what to do way, your my hands. So they could give that to more people.
Joey Korenman:
EJ, any final thoughts on the saga before you dive back into your-
EJ Hats and Pants:
Minting. Yeah.
Joey Korenman:
... open additions and your drawing into the space.
EJ Hats and Pants:
The dope drops. It's funny because you are mentioning about how like, Oh yeah, it'd be cool to have all these screens in your house, that's curated and things that you bought. And it's like, in the future are we going to go to hotels? And then there's like, hotel NFT are. That you just have Shutter stock photos that's on a screen and that's... Everything's interesting and the NFT, or you said about the Kickstarter, I think that's like hopefully that's another Avenue. And I'll say that this is a lot like the YouTube whole boom, where you'll have someone that drops a YouTube video and they get 1000 views in one day. But with everything for most people, it's a slow burn and don't give up.
You never got paid to do personal work before, and you still did it. So don't let this discourage you from doing that. And just know that there's a majority of people who are not making any money on this at all. Some people are even losing money on this. So, don't lose track of why you do this in the first place, why you're in this industry, why you create and just keep doing it. For me, it's been really hard to shut everything else out because it's so distracting. It's constantly in your Twitter feeds and stuff like that. But it's always perspective. And just know that I personally know a lot of people that are not making a lot of money out there and probably never will. And that's fine. We're just going to continue to create and continue to support each other. And if I have any closing thought about all this, is just remember what made this community great in the first place.
And please don't lose sight of that. And the next time you wanna call someone else out, or the next time you want to just throw someone's else's concerns out the window, think about what happens after this is all a memory. Are you really going to feel good about treating that person the way you did? Because I feel like right now, we're not thinking about that. We're just so absorbed in our own thoughts and feelings that we lose sight of what happens when we go to the next event. I think even that plays into this all, where if you had to see everyone tomorrow at these big events, would you really say what you just did or treat that person the way you just did? So-
Ryan Summers:
Would you brag about the way? [crosstalk 01:24:35]
EJ Hats and Pants:
Yeah, would you brag about this? So, #perspective.
Joey Korenman:
Keep it real. Look, all of this is just our opinions, and maybe the three of us have gotten this completely and utterly wrong. There's nothing to worry about, and the world is now your oyster if you are a talented motion designer. But my gut is telling me that something is going on right now that isn't really sustainable. I think there will definitely be a place for NFTs in the industry that makes long-term sense for artists. And I do think the technology itself unlocks some pretty cool possibilities, that we'll start seeing over the next year or two. And what I'd like to say to anyone getting wrapped up in the hype is this, good luck. I really hope you're incredibly successful, but I would urge you to approach the NFT game with a bit of skepticism and perspective, on how things like this historically ended up. We're in the very early days of this, it's still basically brand new. And we will be talking more about NFTs in the future. Please let us know what you think about all of this. Hit us up on all the socials at School of Motion. And thank you so much for listening. See you next time.