What did I just buy? I tried to use New York’s first NFT vending machine
It’s easy to miss the storefront that is home to the “world’s first NFT vending machine” in Manhattan’s financial district. Squished between a sandwich shop and a tailor, the windows are bathed in pink neon light, with glowing letters that announce “NFT ATM.” When you walk through the entryway, you enter a tiny booth with the vending machine, filled with rows of little paper cartons, looking almost like cigarette packs. There are only two products: a “color” for $5.99 and a “party pigeon” for $420.69.
I was here to spend some of the Guardian’s money on an NFT, or nonfungible token. NFTs are based on a blockchain feature called the “smart contract,” which is kind of like a virtual vending machine. Send some of your crypto to a smart contract, and it’ll print a unique token – basically a digital receipt – that says you now own this cat pic. Anyone else can still right-clicksave and share Mr Whiskers, but you’ll know, and anyone else looking at the blockchain will know, that the image is yours. Or so the logic goes.
The main problem facing users is that blockchain is too complicated, according to Jordan Birnholtz, the Chicago-based co-founder of Neon, the startup behind the vending machines. When he called me, the 30-year-old introduced himself by telling me he was using a skillet to heat up green tea, because he doesn’t have a pot or a kettle. (“I think my ex took them when we broke up,” he explained.) And just as you can boil water in a frying pan, Birnholtz is determined to prove you can buy NFTs without crypto.
Birnholtz, who used to work in progressive politics (a “totally different” side of his life), said Neon’s target customer doesn’t want to get into “19th and early 20th century lessons about economics,” they just want to support artists they like, and in return get a little token of “conspicuous consumption” they can show off, like a digital version of a band T-shirt. Neon’s stated goal is to make buying an NFT “as simple as buying a toothbrush” – which means using an old-fashioned credit card, and instead of fiddling with smart contracts: a literal, physical vending machine.
I didn’t think my editor would be thrilled with the pigeon, so I bought a color. This, it turns out, meant a piece of paper inside the carton with a randomly generated code that would allow me to “mint” an NFT, claiming ownership over one of 10,000 different colors. Birnholtz tried to clarify: “It’s impossible to own a color. What you own is a ledger on the Solana blockchain that represents that particular color. And we allow people to collect those colors to trade them, and sell them.”
I still don’t fully know what that means, but I wasn’t about to let those silly anxieties get in the way. As if buying a bag of Cheetos, I punched in my selection and tapped my credit card. The machine beeped, the metal coil began to turn – and then, nothing. My NFT was stuck. I banged on the glass, but it refused to drop. I noticed two security cameras watching me, and felt self-conscious. Was I the first person in the world to lose money while physically buying an NFT?
Without other options, I bought another one to push the first one off. Now I had the first one, but the second one wouldn’t drop. I didn’t want to keep buying them, so I left the second one there. I knew in my heart that I owned it, but I had no real way to prove it.
I told Neon’s co-founder what happened. “That sucks, I am so sorry,” he said. “Vending machines remain, um, not perfect.” He offered to send me a refund if I sent him an email with the approximate time I had made the purchase and the last four digits of my credit card number. I began wondering if crypto would’ve been easier.
There was another snag when I redeemed my prize. I scanned my QR code, which directed me to a website and told me to create an account on the Neon marketplace. Then I had to enter a 12-digit sequence on my little slip of paper to mint my NFT. But instead of getting a color, based on a random sixdigit “hex code” used by web designers, I got a five digit string that resulted in a blank square.
“That’s embarrassing, it sounds like you might have got a misprint,” said Birnholtz. But maybe, I suggested, the flaw could make my NFT more desirable? “Yeah, perhaps future generations will look upon your error in the same way they looked to numismatic errors with joy,” he offered.
Other than list it for sale – and I wasn’t convinced anyone would buy it – it didn’t seem like there was much else I could do with the NFT. “That is correct. You are buying it to show it off,” the cofounder told me, adding, “We make no promise of future value. I would never sell something to someone as, oh, this is a great investment. That’s bullshit. I think you should buy something if you like it and you connect with it.”
On the topic of investment: Birnholtz’s company has received $3 m in seed funding. The co-founder said he plans to open more vending machines in half a dozen cities over the summer, probably including Las Vegas, Chicago, LA and Miami. The idea is that the machines will attract enough attention to turn Neon into a bustling platform. “Like, people having fun, collecting things, showing off their taste, flexing, and connecting with other people online. That’s awesome. It makes me happy. I get up every morning excited to talk to artists who want to sell on Neon.”
I wasn’t sure who I could flex to, though. As I lingered outside the ATM for about half an hour after my purchase, on a busy street during lunch hour in FiDi, hundreds of people walked by, but only one other person stopped to look at the booth. “Oh my god,” he said, snapping a picture on his cell phone. I approached and asked him if he owned NFTs. “A few,” he replied, but he was already walking down the street.