A few weeks ago, the dance floor of The Grand nightclub in the Seaport District moved to the beats of two truly unique DJs ― digital apes displayed on a large video screen.
What might not have been immediately clear to the crowd was that the dancing animals were really NFTs, or non-fungible tokens, that cost the club’s owners nearly a half-million dollars.
NFTs are digital files — in this case, of cartoon apes — created, or “minted,” using blockchain technology. Because they are one-of-a-kind assets, they can be used to authenticate ownership, much like a deed provides proof of who owns a home.
“We felt like we were making history that night,” said Randy Greenstein, co-owner of Big Night Entertainment Group. ”The truth is that 98 percent of the people there had no idea what was going on.”
And understandably so.
Although NFTs have grown in popularity, many people still can’t fathom what they’re all about, let alone why anyone would buy them. They’re most often associated with expensive digital artwork ― some have sold for tens of millions of dollars ― but companies like Big Night are using them in other ways.
Big Night’s investment reflects a larger effort to usher in a new era of nightlife in Boston, a time when people will pay for drinks with cryptocurrency, bid on NFTs that double as concert tickets, and go clubbing in the “metaverse.” It makes sense that nightclubs are embracing these trends; technology has long been a part of their identity.
Greenstein thinks it will help the company, which has 18 venues and restaurants in the Boston area, remain relevant in a future where people spend even more time immersed online.
The Grand’s dancing apes belong to Greenstein and Big Night co-owner Ed Kane and come from the Bored Ape Yacht Club, a collection of 10,000 unique digital apes whose characteristics range from having pink fur to lasers shooting out of their eyes.
Owning an ape doubles as a membership to an exclusive social circle. It gives people access to a private channel on the instant messaging site Discord, a virtual “bathroom” where people can doodle on a digital wall — like they do in an actual club or dive bar — and parties and events.
But the supply of Bored Ape characters is limited, and they’re expensive. Transactions require cryptocurrency, and the floor price for an ape is about $200,000.
For Kane and Greenstein, it was about more than socializing ― they saw a business opportunity.
“It was a no-brainer,” Greenstein said. “If you’re going to do something with them, Big Night is going to make them DJs.”
To make it official, the company “signed” the apes as artists in November. Since then, a team of more than 20 people — including music producers, illustrators, and 3-D animators — have created digital personas for Kane and Greenstein’s jpeg files.
The DJ and producer duo, called Escape Plan, is made up of ETHan and zeETH, whose names are a play on the word “ethereum,” the cryptocurrency the owners used to buy them. The two apes have a few hundred followers on Instagram and Twitter, a 30-minute mixtape, and a merchandise line.
Travis Lowry, a venture partner at Vinyl Capital, said companies experimenting with NFTs usually take a physical asset, like a pair of Nike sneakers, and try to recreate them digitally.
“Big Night went the other direction . . . which is, ‘Let’s start with a digital asset that has built a following and a community around it, then create physical experiences off of that,’ ” he said.
Other companies also are using digital tokens as conduits for real-life experiences. Buffalo Wild Wings sold three NFTs during the Super Bowl that came with the rights to a year’s worth of wings, and the Coachella music festival is using NFTs to sell lifetime access to its concerts. Big Night created VIP ticket packages, called “NFT Experiences,” that people can bid for with cryptocurrency on the OpenSea platform.
Michael Collins, a 41-year-old wealth manager in Boston, bought crypto for the first time when he saw Big Night was auctioning an NFT that could get him four Snoop Dogg concert tickets, a meet-and-greet with the rapper, and a $250 dinner at Guy Fieri’s Tequila Cocina. But there were a few hurdles he had to clear: Buy the cryptocurrency ethereum, download a crypto wallet, link his ethereum to it, and create a profile on OpenSea.
It took a few days, but in the end his winning offer amounted to about $1,000.
“For me, that’s a tremendous value,” Collins said. “I would have bid another $500 on this.”
Companies are using NFTs for these types of transactions partly because they are a way to prove ownership of an asset, whether it’s digital art, chicken wings, or concert tickets.
“We could have sold a meet-and-greet with Snoop Dogg via Ticketmaster or our website, and you could have clicked on it and paid US dollars,” Greenstein said. “At the end of the day, all NFTs are is a contract.”
Collins said buying the package in US dollars “for sure would have been easier,” but now he has a digitally verifiable token that proves he won the VIP package. Whether that is valuable beyond becoming personal memorabilia is debatable, but Merav Ozair, a blockchain expert and fintech professor at Rutgers Business School, said there could be scenarios where owning NFT-based tickets makes more sense than buying them with hard currency.
“If it is an NFT and it is authenticated, and [if] it turns out that this event was the first time Michael Jordan did a dunk . . . now it has real power,” she said.
Like any investment, a digital asset could grow in value over time, or also become worthless, she said.
Big Night also now accepts crypto for bottle service in the VIP sections of its clubs. John Keenan, director of Big Night’s VIP clientele, said customers had been asking to pay in crypto over the past few years, especially those who got into bitcoin early.
“There were days last year in which people’s net worth went up by massive amounts,” Lowry said. “You can imagine a situation in which someone says, ‘Let’s go buy expensive things and use cryptocurrency to do it.’ ”
Nightclubs, he said, seem like an environment where crypto culture would thrive.
“If you’re someone who’s in the VIP room . . . it’s pretty cool to pay with crypto, [and] the people around you probably think so, too,” Lowry said.
Keenan pointed to a more practical benefit: Almost every weekend, customers’ debit and credit cards get declined at Big Night clubs.
Not so with crypto, he said. Customers can scan a QR code at the bottom of their bill and transfer digital funds to the club’s crypto wallet. Since the option has been rolled out, just over 100 transactions have taken place.
Big Night’s business is still grounded in real life, but it has plans to build its nightclubs and restaurants in the metaverse, an emerging immersive digital space where humans might interact through digital avatars.
Maybe people will don virtual-reality headsets and dance in their living room, instead of going to The Grand. Afterward, they might order a mac-and-cheese burger from a virtual restaurant, and the real thing will show up at their front door.
“We’re fortunate to have our base 18 venues,” Greenstein said, “but the future is everyone’s going to be on their devices hanging out in the metaverse.”