Early NFTs with NFT Archaeologist & Rug Radio Host Adam McBride
A transcript of key takeaways from our fireside chat with Adam McBride
Introduction (0:00)
Chris Tse: Hello Cardstack community. My name is Chris Tse. I’m the founding director of the Cardstack Project coming to you from the land of the Web3. Today, on another episode of our fireside chat series, we’re going to talk about NFTs, a very big component of Web3. Today, I’m with Adam McBride, NFT archeologist who apparently discovered some of my early NFT work through his community. We’ll go down that fossilized rabbit hole and see what’s going to happen. Welcome, Adam.
Adam McBride: Chris, it’s great to be here. We’re talking about my favorite subject, so this is going to be awesome.
Chris Tse: Yeah, it’s so interesting to have a break in this amazing journey of NFT. We can catch our breath a little bit and say: “So how did we get here? What gave us this opportunity to both dream and have nightmares at the same time? And what was the idealism surrounding it all?” I was lucky to be in the beginning of it, and I can share a slice of my story. But I’m actually super curious about your role as our resident professor of archeology of NFT arts. What is the thing that got you into looking at the fossils of NFTs?
What got you into NFTs? (1:09)
Adam McBride: It’s interesting because there’s this art aspect and then there’s just this other part of NFTs themselves. For people who aren’t familiar with the history of NFTs, they were built by artists who were looking for ways to create provenance for their art on blockchains. I’ve been into tech and Ethereum for some time. I built coins back in 2017, 2018. I’ve run businesses my whole life. I tried to start a blockchain business back in 2018, but it fell flat on its face — never made one sale. Back last year in March 2021, there were these rediscoveries of old NFT projects: Moon Cats, Curio Cards, CryptoCats, and ETHEREAL. All within one week, four projects were found.
I was around all of them because I was on Twitter, and I knew about CryptoPunks. I knew about NFTs, but it hadn’t really clicked for me. At that moment in time, it did something viscerally in my body, like, “oh my God, there are all of these old projects that are sitting there just waiting to be found and they have value.” I spent literally 10 hours per day for the next six months just digging through Google and blockchains and whatever I could find. I searched literally thousands of contracts to dig up old projects and relaunch them. Personally, I’ve relaunched a dozen or so old projects and brought them back to life to varying degrees of success. But getting to learn this history and the different things people were building — which have led to modern NFTs — has been one of the great thrills of my life.
What was the weirdest thing you found during your search? (3:12)
Chris Tse: That is amazing. When I was scrolling through the discoveries on your podcast, it was very clear that there was so much variety surrounding NFTs. This is something aligned with my own personal experience, having done an early NFT project with the creator of the NFT concept, Kevin McCoy, who was a co-founder with me when we turned Monegraph from an art project into an incubated venture. I was CTO and co-founder for that project. There is so much variety in NFTs and in what people are trying to do. I like using this analogy: you go to a supermarket and you see 10 produce aisles and they have maybe 100 different plants. But that is not the universe of all plants. We’ve narrowed down on squash and broccoli and that’s about it. In the early days, it was really just wild germination. So what was the weirdest thing you found?
Adam McBride: It’s infinite. There was so much experimentation. When I say I’ve gone through thousands of contracts, it’s literally thousands. So many of those had all of these (what I call) ponzinomics, but you might call them tokenomics. You would list something and if somebody bought it, it would immediately relist at a higher price. This was so common on Ethereum. They thought all this sort of stuff was a great idea at the time, but it completely contradicts what we think of as a modern NFT, which is ownership. I own it. You can’t take it away from me unless I want you to.
Of course, the early efforts on Namecoin have what we would consider now a bug. But at the time it was considered a feature, where they expired after six to eight months. The people who were building Namecoin thought that was a great idea — it’s like a URL marketplace, a Google.com that will eventually expire. So if Google doesn’t renew it, somebody else can buy it, creating a vibrant marketplace. They thought that was a good idea for NFTs. You get all of these crazy experiments and I look at it as all just bricks on the road to get us to the modern NFT. No matter how much we like it right now, the modern NFT is going to change over time and we’ll look back in a decade and go, “they were crazy to do that back then.” But that’s where we are right now.
Building Monegraph (10:52)
Chris Tse: When we were building Monegraph, we had the Bitcoin blockchain. This was prior to Ethereum, so we couldn’t use Ethereum — not because I didn’t want to. I actually went on the stage in San Francisco at a database conference to talk about this new database called blockchain that can only source 25 gigabytes. Of course, this was a conference where the average size of these databases are like 10 terabytes. I was like, “I heard about Ethereum, you should keep track of it.”
Adam McBride: No, you were like, “this is going to be amazing! You should watch it!” You called it, man. I hope you got in on that ICO. Because you must have killed it.
Chris Tse: You know, the thing about weak hands is you sell too early.
Adam McBride: Everybody does. I encourage your listeners to watch that video if they haven’t yet. It’s a slice in time where you quite aptly laid out the way blockchains currently work with heavy data storage. Maybe IPFS was just starting back then but you laid out that structure, which is now the way most of the stuff is going. Who knows where it’s going to go in the future? But it was a great talk. I was stunned to see it. Usually people don’t get it right. But you really nailed it.
Chris Tse: Sometimes it’s easier to look at something in the beginning to see what it ought to be. What I saw was that blockchain was about these tiny bits of records that are the parts you need to exchange and trade like a Bitcoin, or in this case, an NFT. Then there’s a second part which is like, what is it about? It’s kind of like a wall text, like when you go to a museum and the artwork has a description, artist bio, year of production, etc. That is like a document. That’s what we’re using The Graph for: when you use the OpenSea API to access the metadata — the traits of the thing itself. Then there’s the actual media itself and that’s terabytes of petabytes of data. So we would talk about gigabytes for the blockchain record, terabytes for the metadata and petabytes for the actual media themselves. That was the reason I presented at the database conference, because when you’re building Web2 applications, you think about these things.
I was so excited about it all, and this was when I was meeting different people like Joe Lubin, his son Kierin, and Vitalik and listening to what they were saying. Obviously, that was still early on. When I took the job to be CTO of Monegraph, I was like, “well, I need to build something tomorrow.” What I did was use Bitcoin as that gigabyte database and then use Stripe, the payment solution, for OpenSea buying and selling. So every single time you buy an NFT, you’re paying the artist as if they were an Uber driver. And then they have those funds in the balance and they can pay someone else using a credit card. It was piecing together that stuff. But you can’t really play money games with it because you’re quite restricted in what you can do with these credit card-based marketplaces. In a way, Monegraph Commercial was a marketplace. We were so excited when one person uploaded an artwork for $500. We were like, “$500! That is so much money!” And now you see a PFP selling for 100 ETH per day — what is going on?
The idea of provenance (27:00)
Adam McBride: Actually, I have one question for you. This is something in my community — the historic NFT community — that we’ve discussed a lot. So with Quantum — it expired. Then Kevin reissued it on Ethereum and it was purchased by Sillytuna. He’s a super nice guy. I actually just did a collaboration with Sarah Mehoyas, maybe you’ve heard of her from Bitchcoin. We put together a gallery and he allowed that work to be shown and it was great. But the idea of provenance. So it did expire, and somebody else claimed it after it expired, right? I’m not saying you have the definitive take on this, but what’s your take on that? Because Bitcoin or blockchain maxis will go, “the chain is the chain.” But I would love to know your take on the provenance record.
Chris Tse: The provenance network in that particular sense is the legal definition of the statement that Kevin wrote, which is whoever possessed the token possessed the right to the artwork. That’s a legal contract. What we are asking is not whether the Namecoin was transacted or whether the ERC-721 was minted once sold at Sotheby’s. It’s more about what is the meaning of that sentence? It’s similar to how a constitutional lawyer debates a well-regulated militia. What do those words mean? What does “token” mean? Does it mean Namecoin token? Does it mean a token that can be replaced with another token in the same way I can have a bill and shred it and then the Federal Reserve gives me a new one with a different serial number? Is that the same thing? If I print out a new contract with the same signature or digisign, is it the same? That’s the interpretation. What’s interesting about this is that it was not a debate about the actual record. If you can renew that Namecoin name, then you possess that thing. It’s just whether that thing they possess on the Namecoin record translates to ownership and it depends on those legal terms. So it’s wetware again.
Adam McBride: It’s complicated. That’s what I like to say.
Chris Tse: It’s complicated. And it’s no different than what Packy got in trouble for on his podcast Not Boring, talking about blockchain and buying real estate and titles. Sure, you can have a blockchain record, but does that correlate to this building? With the courts: the court martial or the police evict the person who’s trespassing if you buy the thing. There’s no getting around that other than purely digital stuff where the whole thing is locked digitally. For example, you need to possess this token before you can encrypt or decrypt this file, and anybody who has the token can decrypt it. That’s a little bit easier to enforce. But the enforcement is some sort of legal contract from Soetheby’s or Christie’s or something like that. Then at the end of the day, it’s this lawyer duking it out in court again.
Adam McBride: What I’ve become comfortable with is answers not being entirely given — there is no solving. There’s going to be some people on one side, some people on the other, and this is just what it is. There’s a whole swath of things related to NFTs that fit into this category. When I have the chance or a lucky opportunity like this, I always like to talk to one of the OGs to get their opinion because we’ve run into it a lot. I had Harm van den Dorpel on my podcast, who is an early German digital artist. He was one of the first artists to ever sell to a gallery using cryptocurrency, he may have been the first selling with Bitcoin, and they were putting art on Bitcoin using ascribe if you remember ascribe.
Chris Tse: Yes, Trent’s project. Monegraph described them as one-time like B.F.Fs but like enemies at the same time.
Adam McBride: Frenemies, right? But then ascribe obviously closed, and they turned off access. You couldn’t get it. And if you didn’t pull your art off before they closed, there’s no access to it. But we’re working and trying to reset this system and working with Trent from ascribe to see if we can get it set back up again so the artists can get their works back. But many of these artists have already reissued those works on Ethereum. I’ve asked the artists what happens to the collector who collected the Ethereum art if they get the originals back. There’s all these very interesting questions which don’t have simple answers. They’re not simple answers at all. The history of NFTs is complicated, no doubt about it.
History of NFTs as history of ownership (32:00)
Chris Tse: The history of NFTs is also the history of cultural ownership — the idea of what is canonical? For CryptoPunks, which one’s canonical when you reissue something? Generally speaking, I would say that the canonical one is the one with the value. But where does it begin and when does it end? That’s why I’m so excited about NFTs that actually do something on-chain. Let’s say you have an NFT that allows an owner to get one third of all the revenue processed by this music NFT marketplace on-chain. The owner gets a lifetime revenue in the same way they’d get TV rights or music rights from the performance arts society. That is pretty clear. Whoever owns this token gets a cash flow, assuming this is allowed in terms of security law. I like these use cases better.
We were brainstorming in the Monegraph days once we shipped the MVP — which was about exclusivity and limited editions as the number one thing. We were saying, what kind of rights can we also sell? Our approach was that every subright should be its own token. So you have the title of the work. That’s a token. Whoever owns it owns the title, but underneath a title you can use this in a commercial way. It comes with it or it doesn’t come with it. Then there is the receivership right, which is that if it generates revenue, do you get a percentage? If so, how much? So even when we were doing the Bitcoin version — and this was stupid from a transaction fee point of view — we actually created a Bitcoin OP_RETURN token for every single one of these rights. Then we can transfer those rights to the first collector who bought it as an exclusive art and they can choose to resell a portion of those rights. I don’t think that has been done since.
Adam McBride: Early, man. You guys were early. You know, it’s so funny because you think about what happened last year and the explosion of Bored Apes. What did Bored Apes do differently? They gave ownership of the copyright to the holder of the NFT. That’s all they did differently and it completely exploded. I’m not saying that was the only thing that contributed to that explosion. But it was a big thing. Sometimes you’re too early.
Chris Tse: Way too early. The number one thing is copyright. Next is title, license, offer, consignment, work-for-hire, terms of service; clauses: usage rights, resell rights, sublicense rights, receivership rights. Then media source files, preview media.
It’s very different recreating the After Effects file versus just viewing the beautiful thing. Then there’s the payment processing: one-time payments, ongoing payments, and the fees owed by owning creator royalty. That’s like 14 things — those are all tokens. It blows my mind that we still don’t have any of them as tokens other than title. I don’t even know if it’s title. It may not even be title.
Adam McBride: It’s one step forward, two steps back. You never know what’s going to be the thing to click with people. I’ve done enough business, and you have too, to know that we just never know. You give it your best shot, and you guys were obviously trying to do maybe too much at the time.
Chris Tse: Oh, for sure. We felt the obligation to think through all the things that NFTs could be, from distribution to social media. We came up with an interface — we didn’t build it — where you can bid on something like OpenSea. We saw the importance of that marketplace and that liquidity and that bidding and automatic fulfillment infrastructure. But it’s a lot to build on Bitcoin and Stripe. Our understanding of NFT as a specific concept is still early. But the amazing thing about it is that the infrastructure is mature. When you have early implementations of a concept but very mature tools like computers and the Internet, eventually those concepts will come into play. Maybe archeology is all about rediscovering an old way of doing things in a new way.
Adam McBride: That might be true.
Chris Tse: It might just explode. Your study may not only identify the ingredients, but also maybe the imperative to do it again.
What will make the general public totally understand NFTs? (43:53)
Chris Tse: This is something I want to ask you about: as we build on top of this layer, what do you think would be the type of innovation or clicking moment that will make NFTs take off? So that more than 2000 or 20,000 or 200,000 people get this. I’m still asking this question. I think with Bored Ape and stuff like that, it’s still an exceedingly small number of people on Earth. You may be among one in a thousand of the NFT community. What do you think is the thing that will click for people in NFT in general, maybe for the future?
Adam McBride: Well, there are so many things that need to happen first. The first thing that needs to be solved to bring in more people is the way wallets work. It has to be not only dumb/easy, but also recoverable. I know there are people working on these social recovery systems and stuff like this, and that has to happen. I don’t let my brother hold his ETH in his own wallet. He holds his ETH on Coinbase. Not his keys, not his coins. If he had his own keys, he’d lose his money. He needs that on Coinbase. That’s how most people probably are, myself included. That’s just something that has to be solved first. It’s going to happen and it’ll get layered on. It sounds simple, but it’s really not.
Chris Tse: Not at all. We have a dedicated team of five people working on a Web3 wallet. We are doing it a little bit differently than MetaMask. We’re doing it entirely on top of smart-contract wallets, using Gnosis Safe, which people use for storing high-value stuff. It’s designed almost like a bank vault or something like that. But here’s a cool thing about software. The same software that people use to hold NFT collections that are worth billions is available to you for free to manage your $3 mint that you did yesterday. Hopefully it’ll become 300 ETH someday. We are just trying to figure out how to use this Gnosis Safe infrastructure with the best of mobile development to make this stuff easy to understand. We have to approach the usability of Coinbase without the custody risk of Coinbase. It’s possible. We don’t think it’s just going to help NFT. I think we’re going to help GameFi, DeFi, …
Adam McBride: You’re going to help all of crypto. It’s not an NFT issue. That’s a crypto issue. And obviously, you’re working on it. You recognize the value in it. The company that solves that is easily a billion-dollar company, without question. Just look at what MetaMask does. They’re by far the most widely used and yet they’ll still let me spend 2 ETH in gas on a failed transaction. How on earth is that possible? How on earth is it that I could by mistake spend 2 ETH on a failed transaction? It should be impossible in MetaMask to do that. They should literally not let you do it, but they still do. I know a lot of people that say, “MetaMask has already won.” I’m like, “No, they haven’t. No, they have not.” There is room for somebody else to come in and eat their lunch.
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