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he year 2021 witnessed the blossoming of both the global market of K-pop as well as that of NFTs (non-fungible tokens), and, by the end of the year, there came the merger of the two. Whilst the NFT economy, based on blockchain technologies, has been widely celebrated for bringing forth a future of “decentralizing” the art market, the emergence of K-pop NFTs has triggered a wide-spread negative public sentiment. Multiple online fandoms have furiously protested the upcoming actualiazation of K-pop NFTs, which, as they believe, would further worsen global warming. Such an inference is important and obvious: blockchain technologies (the technological foundation of NFTs) consume a huge amount of electricity, and thereby cause large carbon emission and atmospheric pollution. Meanwhile, others begin to caution the general public to the capitalist nature of crypto and NFTs. What the crypto market demands is not just fossil energy; it also calls for substantial technology literacy, strategic planning, and the money to make the first entry investment. Hence, it could be inferred that the K-pop NFTs (and other NFTs as well) will first and foremost contribute to the stratification of the technocratic hierarchy in the capitalist world. In the time when peer-to-peer transaction (the most well-known character of the blockchain economy) is widely labeled as a form of radical economic democracy, the two criticisms show that the real-life application of the technology and the economic model are reproducing the same set of problems of capitalism as the pre-blockchain era.
However, neither of the two criticisms has sufficiently decontrast the discourse promoting K-pop NFTs and its emergence thereof. For example, the climatic criticism of digital assets enables blockchain advocates to “resolve” the problem by claiming that new blockchain technologies will reduce their energy consumption as well as air pollution. The capitalist critique, on the other hand, is widely believed to be a “common character” for all modern-day business. At this point, instead of simply accusing the problems caused by blockchain economy have persisted ever since the era of “late capitalism,” we need a more focused and substantial analysis of the marriage of crypto and cultural industry, of how technology reconfigures, and is reconfigured by, social relations and politics in the capitalist world.
The incorporation of blockchain into the global cultural market necessitates this critical investigation of assumptions and hidden stories of the discourse of “decentralization” in the age of blockchain. In this essay, I theorize blockchain technology, NFTs, and cryptocurrency as “digital infrastructures” that provide the existential condition for the digital economy. In other words, the popularization of blockchain technologies and the crypto economy exhibits the convergence between the virtual and the material markets, which engenders new spaces for capital circulation at its best and updates the apparatuses of neoliberalism at its worst. Looking into the political economy of K-pop NFTs, I analyze subjecthood and sovereignty in the era of digital capitalism, and argue that the future of internet users will resemble nothing like the anarcho-utopian dream of “decentralization”, nor will it end up with absolute control by capitalism. Rather, I speculate that digital infrastructure generates a new ecology of capital circulation and labor exploitation, while it also opens up new fissures for resistance, struggle, and imagination. It is thus urgent for us to critically understand the fundamental logic of digital infrastructure and cultural industry, before denouncing their imminence.
K-pop NFTs: What is it? How does it work?
When HYBE, YG, and SM–three of the dominant K-pop management agencies in South Korea—announced their entry into the NFT market in late 2021, one of the key issues here was how this move would differentiate itself from other small-scale companies’ launching of the same product. According to SM Business Management, their invention of NFT products would include a self-developed digital platform where users can “recreate content and products into NFTs,” and where transactions between users can take place. Other two companies also expressed similar interests in building their own platform for NFT minting and trading. For all these willful power players, customized digital platforms based on blockchain technologies are the primary condition for developing K-pop NFTs. This common interest in self-constructed blockchain-based platforms is surely responsive to the current NFT market, where most transactions are mediated by Opensea, the digital marketplace where digital assets are transformed into NFTs and traded. In such a situation, inventing their own blockchain-based platforms will enable K-Pop companies to create a relatively “closed” network for capital accumulation and circulation, while they can keep pursing expanding a global market.
The self-invented NFT marketplace platform, however, is more than an embodiment of the companies’ unwillingness to let go of their control over the already existing global market of NFTs. Remarkably, what these companies really seize to control is the very entry into the virtual space. More specifically, the NFT trading platform operates on an interface between the real-world economy and the virtual one. This “interface” should be understood, first and foremost, as a currency convertor. NFTs are traded in cryptocurrencies, or, the fungible, interchangeable, cryptographic tokens whose value is not controlled by any central banking institution. Both NFTs and cryptocurrencies are transferred on the network of blockchain, which functions as a “distributed ledger” that allows every user to access the transaction records in the system. In this sense, the marketplace platform is the existential condition for NFT products, and all trades related to it. To buy and to trade NFTs, one needs to “enter” the blockchain network by converting physical money into virtual currencies—the cryptocurrency of the blockchain network. Also, as of now, “minting” (creating) NFTs needs to pay the platform a “gas fee” as the process of linking the digital asset with the blockchain through computation costs a huge amount of electric power. In this sense, despite the fact that the transactions between individual users are not channeled by banking systems and brokers, the company owning the NFT marketplace platform practically controls the users’ money and investment.
The invention of new NFT trading platforms does not just bring forth a new way to collectivize fans’ money; moreover, it is a significant expansion of K-pop companies’ encroachment of the underground fandom market. Quite like the second-hand market, K-pop related merchants are widely traded within the fandom, without any official intervention. Yet unlike the modern-day second-hand market, many K-pop related products are less valued for their materiality than for their symbolic and affective properties. One of the most popular merchandise in the fandom market is the photocard attached with music albums—some can easily be sold in a price of 1,000 US dollar. As images and audios are rather easily digitalized, they are perfect objects for NFTs. Once these products are replaced with NFTs, the independent and unofficial fandom markets will be fully absorbed into the company-developed trading system, based on the blockchain technology. In other words, although management companies cannot take every profit from fan trading activities, there is no doubt that these companies are now taking a share of these photocard trades as much as possible.
How exactly will K-pop management companies profit from their seizure of fandom market? The “smart contract” inscribed in the cryptographic code of each NFT will designate a certain proportion of the final price in each transaction to the original creator of the NFT. Hence, the one who “mints” the NFT, or the one who claims the rights to the intellectual property, will be the one that will be forever benefited once the artwork is out on the market. While in the existing fandom economy, photocard trades and exchanges register the desire to “possess” commodities; these are economic manifestations of parasocial intimacy. This form of affection of the fans toward their idols is private—but only for a time being, namely, before the popularization of K-pop NFTs. As soon as all products are digitized as NFTs, this intimacy will be capitalized than it has ever been. At this point, it is impossible to erase the big manage companies’ presence in the upcoming K-pop NFT market, as all future transactions are based on the platform developed by the companies that register their authenticity. What seems to be more “peer-to-peer” is the current independent fan market, which, foreseeably, will be absorbed into the dominating power of entertainment capitals.
The politics of digital infrastructure
Having noted the troubling relationship between management companies and fandom markets, how can we talk about all possible “resistances” in the era of the digital? How can we genuinely and critically understand the operational logic of the digital economy and its infrastructure, without falling into the illusion of decentralization and universalism?
South Korea has been eager to incubate a national economy of blockchain and cryptocurrency. By the end of 2021, South Korea has become the third largest market for bitcoin in the world (behind the US and Japan) with the size of its domestic cryptocurrency market reached 55.2 trillion won (est. 44.3 billion USD). While large business groups (“Chaebols”) have been pouring money into the crypto market, the newly elected president Yoon Suk-yeol has been public about a governmental interest in legalizing and taxing crypto-related business. Given this reality, one can hardly say that blockchain-based technology will lead to any form of economic democracy. Nevertheless, it would be too reductive to say that since the nation-state as well as dominant economic powers are major players, the blockchain economy will become nothing but a new round of repression and exploitation of the individual. On the one hand, the economic and political environment where K-pop NFTs are about to emerge looks much the same as every ongoing business in this post-Cold War, neoliberalist world. Yet on the other, this very condition is also subject to change once the supportive networks and materials—the infrastructures—function in a way that hasn’t been planned by the designers. And here is the critical question: what has been changed by the emerging digital infrastructure?
Digital infrastructures, such as the internet and software, always operate on, while causing effects to, the material world (Cubitt, 2017). Places and processes that are used to produce virtual commodities resemble those of the more traditional forms of industrial manufacturing, seeking for resources, producing pollution, and potentially damaging the environment (Ensmenger, 2018). The fact that the “digital” always comes to be known to the public as something “unreal” and “immaterial” unveils the artificiality of such a concept (Parks and Starosielski, 2015). In other words, the politics of the digital infrastructure, much as Jacques Rancière (2004) argued, is about the distribution of the sensibility. In this case, it is about how the digital infrastructure is perceived, embraced, and understood by modern subjects.
Digital infrastructures initiate various conceptions of space and time, or more precisely, they engender multiple temporalities and spatialities. The immediate transaction between two blockchain users occludes the very presence of the platform, which was primarily developed by commercial corporations or the nation-state. This shortened distance is a construction of modern capitalism and the neoliberalist state, yet this fact has been meticulously concealed by the discourse of decentralization. Moreover, the labor and energy consumed to produce such a sense of immediacy and intimacy are oftentimes invisible and neglected (Pasek, 2019). The transnational affective connection enabled via media consumption of K-pop relies heavily on the local computing infrastructures, transmission wires, and human laborers in power plants, all of which are, ironically, erased from the common knowledge about the internet and the digital (Lamarre, 2015).
How might digital infrastructures be altered? When digital infrastructures become complicit to the alteration and manipulation of our senses of time and space, does this mean we have already become the puppet of modern capitalist hegemonies? Such a deterministic view is surely undermining the complexity of the current situation. The K-pop fandom has been highly politicized by actively participating in various scenes of political movements, which have been quite separated from the artists and their companies. In May 2020, to show solidarity with the Black Lives Matter movement, K-pop fans hijacked the white supremacist hashtag on twitter, flooding it with K-pop videos. A month later, they also crashed the Dallas Police Department app with thousands of “fancams” – short clips of Korean idols’ performances. In other words, K-pop fandom, largely based on social media platforms and largely constituted by the technology-savvy Gen-Z users, knows too well how to utilize both the platform and the content for their own pursuits.
As Wendy Chun (2006) powerfully points out, “freedom” in the age of the internet cannot be reduced to the “free movement of a commodity within a marketplace.” The existing K-pop fandom also proves that the doomsday narrative of K-pop NFT ruining the planet and people’s life will be too paranoid to be convincing. The world has always already been “broken” (Jackson, 2004) and an insistence on the failures and the actual operations of technology will offer a more complicated dynamic between control and freedom. In this sense, the tension between the profit-seeking management companies and the media-savvy consumers can never be ignored or diminished when discussing the politics of digital infrastructures in the context of K-pop. And perhaps, the only way for K-pop fandoms to challenge the centralized economy is through the constant struggle that turns them into the unruly subjects.
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Qi Hong is a doctoral student in the Department of East Asian Studies at the University of Toronto, St. George. Qi is primarily interested in literature and media culture in early 20th century China, while they also keenly observe comtemporary pop culture and media infrastructure in modern East Asia.