What could possibly go wrong? The financialization of life.

Salvatore Iaconesi
8 min readDec 17, 2021

Some time ago, I had published an article here on Medium about the blockchain as the perfect example of the drive towards what I had called the financialization of life.

Turns out that the process is ongoing: enter NFT, Non Fungible Tokens.

I won’t explain here what blockchains and NFTs are: if you don’t know what both of these are, go and study that first, so that you can form your own idea, then come back here.

Again, as in the previous article, I will not make a technical discussion here, but one that is psychological and cultural: a discussion about who we are and what we can become, a discussion about where our cultures are going.

For this, I need to extract a few elements from blockchains’ and NFT’s definitions:

  • blockchains host transactions;
  • blockchains try to automatize trust (or, saying it in a different way, aim at being able to operate in a trustless environment);
  • there can be infinite blockchains, private, public, sidechains, etc; multiple blockchains do not necessarily speak with each other;
  • NFTs are one type of these trustless transactions, among the many types that are possible on blockchains, often called smart contracts;
  • NFTs can be associated to anything at all, from digital images, to songs, to physical objects, trees, medical data, apartments, etc.;
  • NFTs need not be directly attached to the entity they mediate; for example the digital images for which they stand for are not on the blockchain which hosts the NFT itself; an NFT is a certificate which is unique for that image or other entity, even if that entity circulates freely; it is the certificate which is unique;
  • thus, NFTs can transform anything into a trustless transaction, into a smart contract.

Media are not neutral

Media are: books, TV, radio, social networks, blockchains and many, many more.

Of course: you can decide to use them “for good” or “for bad” (whatever that means). It’s an interesting thought, and everyone should do that.

But this is only part of the issue we’re dealing with. Because media are not passive (or neutral) entities and, in the process of establishing relations with and through media, there are things that happen even before using those media. These are due because of how that media is shaped, what are its affordances, what type of content it hosts, and more: all things that contribute to determining how you can use that media to express yourself and other things in the world and, thus, to determining what your world becomes.

This is perfectly clear to those who study Information and Communication Sciences, Mediology, Media Theories, Psychology, Cognitive and Neuro Sciences. Contributions to all these and other sciences by Shannon, Debray, McLuhan, Bourdieu, Flusser, Benjamin, as well as cyberneticists such as Bateson, Mead, Wiener, Maturana, Varela, and up to the present contributions by Barabasi and the many more recent contributors to Network Sciences agree that media is not neutral. Media, as the word says, mediates exchanges and, thus, translates/interferes and introduces noises, imperfections and transformations in occasional and systematic ways that transform the ways in which we perceive, understand and interact with our world.

This means that before you even think of using a certain media, that media has already changed you as a human being. The human being that you were before does not exist after. When cars start existing, you begin having a completely different conception of distance. When TV exist, you have a completely different conception of time and space. And so on.

Blockchains are a media: they are means through which information and communication circulates and is exchanged.

To be on a blockchain, anything must be expressed as a transaction.

In Cambridge’s dictionary, transaction means:

an occasion when someone buys or sells something, or when money is exchanged or the activity of buying or selling something

Similar results appear in different languages, pointing at some form of exchange, almost always involving money or some form of other financial instrument.

Therefore, this is the translation that blockchains force us to perform whenever we need to describe some entity in the world: we are forced to express that something in terms of a transaction, of a monetary exchange, of a financial exchange of some kind.

This a fundamental notion. Since blockchains cannot host anything but transactions (financial exchanges), if we want to describe anything in the world on a blockchain we would have to describe them in these terms.

Another thing worthwhile noticing is that this phenomenon happens in the realm of sensibility: the domain of usage has not even started. It’s like when you have to learn another language, or a new device. Before using it, you have to experience it. Does it have a have a handle? How can I hold it? Can it contain something? Of what shape? Is it resistant? How can I use it to describe/express myself and my world? For blockchains it turns out that we have to describe/express everything in terms of transactions: this is a notion that shapes our whole relation with this media, even before using it.

McLuhan has sometimes been described as a little too techno-determinist, but his inspired message about “the media is the message” — then refined and expanded up to these days by the researchers after him — describes an important phenomenon: no matter what content you use on a certain media, you will not be able to bend some of its fundamental characteristics. This will change your messages — no matter what content it contains — as it will transform the way your messages are able to describe the reality you want to describe. And that will change your experience of the world, and the capacity to relate to it.

If you have to describe everything in terms of financial transactions, you will start living in a world which will progressively be able to experience only in terms of financial transactions.

Enter NFTs, again.

NFTs are certificates on blockchains. Thus they represent financial transactions.

Let’s leave alone for a second the fact that they are not attached to the actual entities they represent (here’s an NFT for the Trevi Fountain by user toto62, clearly inspired by this movie).

The important fact here is to notice the types of entities that we’re connecting to NFT certificates. Not only artworks, music and other forms of digital art forms, but also to the birth of the Internet, to athletic careers, to communication spaces, to the fight against climate change, to recipes, to medical data, to bodies, to real estate, and more.

People and companies are progressively inventing ways to associate every aspect of our lives to NFTs, to the expressions of our culture, to our bodies, health, creativity: we are transforming every aspect of our lives into a financial transaction.

What’s wrong with it

Nothing, really.

New, interesting models for artists, designers, creatives, and also for businesses and communities are popping up everywhere through NFTs. We (I and my research center) are very happy and intrigued by all this inventiveness and creativity, and we study it closely, we provide advice, and we experiment on our own.

But we must take note that on a psychological, cultural and social level this has consequences.

Here are some of them:

  • interpreting everything in terms of financial transactions brings enormous ethical implications; the “everything” we are talking about are our bodies, communication, cultures, health, education, art, emotions, careers, biologies and rituals of our daily lives — eg: life — this will lead to a morbid society in which everything has a monetary value, and can be purchased, sold, consumed, without a thought; that’s if you have the money, of course;
  • transactions are coded; this means that informality becomes progressively impossible; when everything tends to become coded (and, thus, normated and normalized) transgression becomes harder; conflicts become normated and normalized, as it is happening right now, as even movements thinking about alternatives are coming up with the idea of “banks”; it’s capitalist realism into effect; thinking something different from “bank” and “finance” is becoming progressively impossible; when transgression and informality become harder, innovation also becomes harder;
  • public realms progressively disappear; and public realms are the places where our fundamental rights and freedoms are defined; we must ask ourselves what will happen when these places where we define our cultures, conflicts, fashions, health, education, arts and lifestyles are pulverized into millions of blockchains, sidechains, providers, platforms and become subject to financial transactions;
  • labour becomes even more precarious; jobs and even welfare become progressively more unstable, temporary and exposed to financial oscillations, transferring entrepreneurial risk to billions of dramatically underpaid algo-workers, who are slaves in the machine; this is what is commonly referred to as farming, mining, and in multiple other ways; its a pure extractive model; and who knows whether my $300 job playing games will be still up or not tomorrow morning, or if the financial operator will decide to break the entire operation for its financial outcome; we are becoming even more fragile;
  • communication, “winner takes all” and biased success model; media narratives tell about millions of dollars in auctions; almost none of the NFT operations bring these outcomes; on the contrary, only the very first pioneers succeed and, after that, only those who have the power and resources to energetically mobilize communication, financial resources and the rich friends achieve results; all the others play the role of the payers of the fees, because as communication about these incredible successes become known, a biased success model forms, and marketplaces collect high number of fees from the many who wish to try and replicate that model; the market(place) always wins;
  • trustless means “without the need for trust”; trust is in the peer-to-peer network, in the automation, in the algorithm; this means that institutions and other people disappear, replaced by an algorithm; when trust is everywhere, diffused, in the peer-to-peer network, it also means that it’s nowhere, and in nobody; only the “procedure” exists; the algorithm takes up all of the existential space; when institutions disappear, replaced by other, trustless ones, responsibility also disappears, because the operators of trustless/financial markets don’t have anything to lose (for example, they also have the possibility to bet against markets, through futures and derivatives);
  • the previous point also has a follow-up, which is extreme fragility; we don’t know whether NFT will be a thing next year, two years from now or what; even if it was 5 or 10 years, it would be a minimal time, and to short when we are talking about the desired impacts for investments in culture, education, health, art and the use of public space; they are perfect for financial speculation, where the objective is to use limited access to knowledge to buy at the minimum and sell at the maximum, and/or to use communicational firepower to make markets levitate.

This is in no way an exhaustive list and, luckily, more studies are popping up about these and other issues.

Why should I care?

  1. I would love if you told me :)
  2. As I wrote earlier, we study these and other technological phenomena in ecosystemic ways. Ecology is the study of ecosystems, which are systems of “things” in complex, dynamic relation, such as environments, media, markets. Another thing that we study a lot is “imagination”, or, better, how imagination develops and evolves in ecosystems. From our observation point, for example, the idea that the way towards empowerment and innovation in arts, cultures and cities is a “bank” (although distributed) and “financial transactions”, hides something serious. This realism is an obstacle that blocks different imaginations about what is possible and desirable. We would love discussing it with others and possibly promoting initiatives about these topics. As of now we are promoting a wider action that also includes these same issues, which is called Nuovo Abitare. Feel free to contact, propose and exchange.