Fashion designer, author, and photographer Bobby Hundreds has been playing at the forefront of culture for 20 years now. His streetwear brand The Hundreds has helped define a model for community and the mainstreaming of cultural mashups. (The Hundreds recently celebrated its 20th anniversary with a Warner Bros. collection juxtaposing Looney Tunes and DC Superheroes and rereleasing old designs referencing cult classics such as Kentucky Fried Movie.)

So, Hundreds’ initial interest in NFTs made perfect sense, as did his timing before the beginning of the hype cycle. He first got interested in NFTs in late 2020 and, at the time, he saw them as a way to offer digital collectibles to fans of The Hundreds. He and his team developed what’s known as a profile picture (PFP) collection inspired by the company’s logo character, Adam Bomb Squad. But by the time that the NFT collection launched, the sector had already changed from the digital underground to the center of popular culture. Bored Apes were trading for hundreds of thousands of dollars, and would-be investors were on the hunt for the next big jpeg collection that they could quickly flip for to turn an astronomical profit.

The market has obviously cooled considerably since then. Hundreds valiantly fought for artists rights last year (helping earn The Hundreds a nod as one of the most innovative companies in crypto), but the market has largely moved to a model that doesn’t prioritize compensating artists when an NFT is resold. The overall interest in NFTs has dropped precipitously, as trading has dried up—NonFungible Data shows that daily NFT sales are down 83% since January 31 of this year, and that’s after a precipitous decline in the second half of 2022 amid the larger retreat into crypto winter.

Through it all, Hundreds was taking notes, writing a series of essays that reflected his thinking and the evolution of digital collectibles. Those essays will be published on May 16 as NFTs Are A Scam/NFTs Are the Future. Fast Company caught up with Hundreds to discuss the future of NFT technology, what building a community really means, and where things went wrong for speculators looking to make a quick buck.

Fast Company: These essays represent your thinking over a period of about 18 months. At the beginning of the book, you say that some of your early theories didn’t bear out. What are some things you misjudged?

Bobby Hundreds: In late 2020, I was really hopeful about—and I still am—about how this new technology could change the relationship between brands and consumers. I also saw an opportunity to change how we treat artists and reward them properly for their work. I think we’re still seeing the first one: The Nike dotSwoosh program is one to watch because they’re doing something interesting when it comes to rewarding the community. People submit their designs, and if one of their designs gets produced, they will receive royalties for that work.

On the second point, when it comes to artists receiving royalties from their work, I was more hopeful in late 2020, early 2021. I also thought that we would bring a lot more people into the NFT space over the last couple of years than we actually did.

FC: Why are you less hopeful now?

BH: Almost all of us were under the impression that Web3 tech and the culture was predicated on this idea that we would use smart contracts to ensure that creators receive royalties forever on their work. That was more or less a promise, if not a social contract, with the marketplaces. But as soon as the bear market hit crypto, the marketplaces essentially rescinded that promise. They—I’m talking about some marketplaces like OpenSea—decided that creators would get zero royalties in order to preserve their bottom lines. That was pretty disappointing.

FC: Was the idea that buyers would save money by not paying royalties?

BH: So, collectors have to pay 4% on every secondary sale of one of our Adam Bomb Squad NFTs. Some marketplaces started letting people pay 0% in royalties, and buyers were leaving OpenSea for those to save money. In a bull market when everything is going well and you can buy a jpeg for $100 and flip it for $5,000, everyone was happy to participate. In a downturn, when people were losing money, they didn’t want to pay creators anymore.

This is bad for the longevity of the space. You want to pay artists and creators, because if they’re not being incentivized or compensated for their work . . . why would they continue working on projects? Eventually, they’re going to leave the space because they can’t or don’t want to work for free.

FC: How has your NFT project—the Adam Bomb Squad—been affected by the downturn?

BH: We launched during Bored Ape Summer, so summer 2021, but we’d been working on our project in February. In that time, a lot had changed about what people expected and wanted out of an NFT. At first, they—and we—were just like, “it will be fun for our community to have collectibles.” We saw them as membership cards to reward our community.

But by the end of the summer, there was an influx of people who had collected Bored Apes or made a lot of money from trading CryptoPunks. Our project of 25,000 NFTs sold out in 40 minutes. These high-profile traders had come in and scooped up a bunch of them. Because everyone can see what’s happening, others started buying them thinking that the project was going to make them rich. That’s not what we ever intended to do.

We’ve built brands that have taken decades to mature, and we were looking at NFTs the same way and hoping for organic growth. That was antithetical to what people wanted out of NFTs at that time. A lot of day-trader types left immediately when they realized that they weren’t going to make a quick buck overnight, and in the end a lot of our endemic community stayed.

FC: How do you feel about the collection now?

BH: The Hundreds is more or less just a brand that continues to build in Web2 and Web3. I think with time those collectibles will become more rare and valuable. I’ve watched sneakers do this, where for 10 years no one cared, and then all of a sudden they do. I also collect cards and fine art. The biggest factor in all of this is time.

FC: People in the NFT space often talk about being part of a community. What does community mean to you?

BH: Overnight, after we released the NFT collection, we had about 8,000 unique collectors in our “community,” and if you went onto our Discord you had thousands of people in there. But that wasn’t really our community. People conflate having high numbers with having loyal supporters, but many of the people who joined were just opportunists.

The biggest trap I see in marketing and branding over the past few years is everyone talking about community when what they really mean is their customers. For me, community can be just one person I have a connection with. We’re on a first-name basis with a lot of The Hundreds’s strongest advocates and loyal supporters. That’s community. I don’t have metrics, but I know that every time we open up a shop or do a drop, I’ll be out there greeting people who I know by name.

FC: Some companies like Starbucks or Nike are using NFT technology but calling it by another name, like digital collectibles. How do you feel about the level of abstraction?

BH: I think it’s totally fine and fair. The term NFT carries a lot of stigma, and some of the brands who really believe in the technology and see the power of it just don’t want to be associated with that stigma. I mean, a digital collectible is a lot easier to understand than a non-fungible token. It might be useful for people to start using a different terminology.

FC: You alluded to the fact that early on, NFTs seemed like a way to bring more marginalized identities into the tech space. How do you feel about that now?

BH: I thought NFTs were kind of a side door into tech and finance communities. When I started with NFTs, I was being invited to dinners with tech executives for the first time in my life. We’ve been sold this lie that artists need to be struggling and starving and poor. I thought for the first time, through NFTs, minorities or marginalized communities could come in and steal some power. That’s what it looked like in the beginning. You were seeing a lot of minority founders and female founders start projects like World of Women.

It turned out to be a lot of virtue signaling. People would buy a World of Women NFT and be like, “I have this NFT, I love women,” and then behind the scenes they were just being trash toward women.

FC: You’ve used NFTs for ticketing purposes. Are there any practical applications you’re excited about?

BH: I think token-gating is really cool. Tokenproof, the leader in token-gating mechanics, did a project with Adidas where anyone who came could get an NFT that you could mint on site and, once you had it in your wallet, you would get a discount code for when you shopped on the Adidas website. That’s a very practical use of the technology that people can understand as consumers.

FC: Tell me about the title of this book: NFTs Are A Scam is pretty provocative.

BH: The title of the book is NFTs Are A Scam. It pissed off so many people in the NFT community, including some of my closest friends. I’m asking them to promote the book, and I can tell they just hate the title. We’ve done a couple of pranks—buying a billboard in Times Square that says “NFTs Are A Scam” during NFT NYC—and then staging a fake protest the following year. We wanted to disarm people. It really struck a nerve. I think if you can say, “Yeah I get it, some of this is pretty silly,” you’re going to convince more people to be on your side than basically being an NFT bible-thumper.