The free market has spoken.
Earlier this month, the National Post quietly deleted its “Invisible Hand Society” non-fungible token (NFT) auction and erased most traces of it from the internet after selling just one NFT for US$22.
The webpage that appealed to would-be investors to bid for the NP’s limited-edition NFTs and that explained their rationale for the project now leads to a 404 error message.
Downstream references to the webpage and links to it on internet archives have also been deleted.
The auction and webpage were up for nine days and sold just one of the six “Invisible Hand Society” NFTs, which consisted of cartoons featuring prominent “free-market” ideologues like former British prime minister Margaret Thatcher and economist Milton Friedman.
NFTs are digital objects, often images, that can be traded online, typically using cryptocurrency. NFT schemes have been described by one critic as "emblematic of capitalism’s growing retreat from productive activity."
The auction was part of the NP’s “Capitalist Manifesto” series, which aims to mark the thirtieth anniversary of the collapse of the Soviet Union by celebrating capitalism through a series of opinion articles and columns.
Other figures honoured by the NFTs included economist Friedrich Hayek, philosopher Adam Smith, novelist Ayn Rand, and “Captain Industry,” an imaginary superhero who was supposed to embody “the business leaders who amassed great personal wealth to the everlasting benefit of their nation.”
Attempts by The Maple to contact Postmedia employees who were involved in the project were unsuccessful. Postmedia is the parent company of the NP and many other major daily newspapers in cities across Canada.
Despite its celebration of free-market economics, Postmedia received approximately $35 million in government bailouts and subsidies in 2021, with CEO Andrew MacLeod telling shareholders that “government support” was now a “key pillar” of the company’s business strategy.
Cryptocurrency analyst and journalist David Gerard speculates that it likely cost Postmedia more to make the NFTs and run the auction than the NFTs were actually worth. CBC data journalist Robson Fletcher recently suggested on Twitter that the short-lived auction cost Postmedia a net loss of US$163.
Gerard wasn’t particularly surprised that Postmedia pulled the auction, stating that the public response on social media was quite poor. “The public really hates this stuff,” Gerard told The Maple.
“The people promoting cryptocurrencies and NFTs claim this stuff is useful, but it’s really investment at the gambling level,” he continued. “They’re basically saying ‘you’re going to get rich for free,’ which for most people is unlikely to occur.”
Gerard likened NFTs to “magic beans.”
“Right now the only people who are really into buying NFTs are other cryptocurrency and NFT promoters,” he explained. “In this respect, it functions just like a Ponzi scheme in that early investors make their money off of later investors.”
An individual with the social media pseudonym “dannycase.eth” acquired the Friedman NFT, the only one that sold before the auction was cancelled.
The buyer told The Maple they stumbled across the NP’s NFT sale on Facebook, and immediately bought the Friedman token. They didn’t read the NP article explaining the “Invisible Hand Society.”
“[I] saw that the NFTs were mostly all auctions, but one — Milton Friedman — was listed as ‘buy now,’” the buyer explained. “I figured some were for auction and maybe a few would be ‘buy now.’ There were also duplicate pieces at one point, so I wasn’t sure what the deal was with the collection.”
dannycase.eth ended up buying the Friedman token for 0.0068 Ethereum, a form of cryptocurrency, or around US$22 at the time of the sale. The cartoon hand is currently valued at 420.69 Ethereum, equivalent to approximately US$1.3 million, according to NFT marketplace OpenSea.
Asked what the allure of the Friedman token was, the buyer explained the cost was relatively inexpensive and that it was part of the first NFT collection offered by a Canadian newspaper or media organization.
“My interest solely came from the novelty of this collector's item, not from any sort of political alignment,” dannycase.eth explained.
Gerard remains unconvinced of the Friedman NFT’s value: “NFT is so stupid it’s actually hard to explain,” he said. “It is like you purchased a receipt. You have purchased a token that points to a picture.”
Though Gerard and dannycase.eth might disagree on the value of NFTs, the latter agrees with Gerard’s assessment of what likely led the NP to cancel the auction.
“They were getting destroyed on social media over it,” said dannycase.eth. “I was hoping they’d persevere through the backlash, so I am disappointed that they deleted all the articles and the website about it.”
Gerard is critical of the NP for getting involved in NFTs in the first place. He argues that there are very real financial consequences for those on the losing end of the bets.
“Values can fluctuate by as much as 10 percent in a day, and the exchanges are completely unregulated,” he explained.
Gerard pointed to the collapse of Canadian cryptocurrency exchange Quadriga as a prime example of what could go wrong in the world of NFT speculation.
Quadriga was determined to be a Ponzi scheme by the Ontario Securities Commission, who said the company's deceased founder, Gerald Cotten, had committed fraud.
Of the approximately $215 million that Quadriga owed to 76,000 clients, only $46 million was recovered.
Taylor C. Noakes is an independent journalist and public historian from Montreal.