It’s easy for a famous entrenched artist who mass produces their work thanks to legacy infrastructure to talk down on this but I’m seeing lots of independent creator artist friends making some money for their work
What property of NFTs has suddenly made them make money where previously they weren't? Like how did adding NFTs to the mix suddenly make their art start selling?
The problem I think, is that their art still isn't selling. NFTs aren't art, they are effectively trading cards referencing art.
These trading cards are, somewhat mysteriously, selling, and that does get money into the hands of artists which is good, but they're not doing it by encouraging people to buy art or tip artists, and it's hard to see how "everyone can just print trading cards referencing things" is a sustainable anything.
I don't have the impression people buying NFT art consider there to be much difference between the art and what you call a "trading card" referencing art. (sure, many probably buy for speculation, but that happens with meatspace art too)
Thought experiment: if they sold a digital art piece in traditional terms, would you consider the printed licensing contract (which is our usual legal tool represent selling a file) to be a "trading card" and the art itself to be not sold? (the legal meaning of an NFT is less defined, true, but I suspect people will tie licensing contracts into that soon enough)
Especially in art, a lot of this comes ultimately down to social convention of what people do consider to have value, and as long as enough people agree it doesn't really matter what the rest of us thinks. (I think I get how the logic works for NFTs, but it doesn't work for me in the sense that I currently don't consider owning an NFT to be meaningful to me, unlike owning other kinds of (representations of) art)
> if they sold a digital art piece in traditional terms
People do sell licenses to digital art, yes. I've both bought and sold such licenses, primarily on TurboSquid (https://www.turbosquid.com/), a digital market place which has been doing that for over 20 years.
That's neither a trading card nor the art itself, but it's certainly closer to "art" than "trading card", because I get specific legal rights to do specific things with the art, such as use it and reproduce it in a book, website, computer game, etc.
It is worth, I think, asking what is being offered by NFTs that TurboSquid (and it's endless competitors and equivalents for other media types) don't offer. Scarcity? Nothing stops such marketplaces from selling exclusive licenses, and some have tried, although I don't think it's ever been popular.
> the legal meaning of an NFT is less defined, true, but I suspect people will tie licensing contracts into that soon enough
Well, yes. People might start selling some sort of "NFT + rights" package at some point, but they don't come with any now, hence the "trading card" digs. Even if people start adding rights in the future, it's not clear that these rights will be (or will be seen to be) an integral part of the NFT. If I can sell an NFT of my 3D model now, and I can sell the right to use my 3D model in a game now, why would I combine these in a package and not just keep selling them independently?
(Now, one interesting thing is that the rights attached to NFTs would presumably be transferable, while licenses to digital art are currently overwhelmingly non-transferable. That is a big change. But...we could sell transferable licenses now; you don't need NFTs for that, and the concept is currently not popular. I rather think that rather than NFTs true value being that they enable transferable licenses, the transferability of licences attached to NFTs will be a drawback.)
> Especially in art, a lot of this comes ultimately down to social convention
That is true. Art prints are an interesting example; you're basically paying for 1) the right to reproduce an artwork on a single piece of physical media and 2) paying for the artist to do that reproduction for you. Both are legitimate services, but it's odd to find them packaged together like that so frequently. And yet, art prints are a huge and very well accepted part of the art market. If NFTs become widely accepted, they will seem less strange, to be sure.
The turbosquid comparison is fair...basically NFTs are recreating that, but without the need of turbosquid.
To your other point many NFTs already include these additional legal rights, it’s articles and forums like this where people are talking about NFTs as if they are all just digital baseball cards.
Just look at decentralized domain names as the obvious counter examples (Unstoppable Domains and/or Ethereum Name Service). You aren’t just buying an NFT for a domain name, the NFT includes the rights to the actual name. I use both companies as examples, because even if this new space they are not offering the same rights over the underlying domain and it’s incumbent on the user to understand what rights they actually get with the NFT.
People pay for mods and skins all the time. People will pay secondlife furniture. They will pay to be be able to display it in their VR houses. They will display it like badges on their forum avatars.
The speculation and whales will being the capital to generate a steady market and build out the partnerships and incentives for customers. Once people are used to digital wallets, sending a few bucks for instant delivery of some unique design is easier than etsy.
> People pay for mods and skins all the time. People will pay secondlife furniture. They will pay to be be able to display it in their VR houses. They will display it like badges on their forum avatars.
All of those are neat ideas which do not require NFTs, and are not enabled by NFTs. People already pay for Second Life furniture.
And advantage I see is the shared protocols and blockchains offer quick and seemless ownership validation even after the original merchant has gone out of business or stopped selling. And for the merchants, its painless and seemless to sell and delegate ownership without having to manage that inhouse, or pay a large fee for the service.
That still doesn't make any sense to me. Would anybody have paid for a physical certificate of authenticity for a digital file pre-NFTs? If the NBA started selling certificates of authenticity for video clips that didn't come with any intellectual property ownership or exclusive ability, people would have laughed and would have never paid millions for them
Exactly. What would you say if I told you I have a famous painting and a certificate of authenticity and am willing to sell you the certificate for $$$ and keep the painting?
Suppose I own a game on steam. I pay a friend to write me a certificate saying whoever owns the certificate owns the game. I sell you the certificate. You pirate the game. Do you own it?
If the NFT doesn't come with conventional legal rights, you don't own the thing the NFT points to in the real legal system. If it does, it's redundant.
If first sale doctrine is ever fixed, your friend could sell you their copy that way.
I don't know why all your examples involve third parties stamping sweet nothings onto a piece of paper. Of course something made by a non-author and with no ownership is useless. I said that in my first comment.
> If the NFT doesn't come with conventional legal rights, you don't own the thing the NFT points to in the real legal system. If it does, it's redundant.
An NFT needs to have some kind of rights in the contract or it's a scam. Notably you at least need exclusivity!
But that doesn't make it "redundant". It's a way of making a contract, not a replacement for contracts.
> If first sale doctrine is ever fixed, your friend could sell you their copy that way.
Yes, but NFTs claim to get similar effects without changing the law.
> I don't know why all your examples involve third parties stamping sweet nothings onto a piece of paper.
The third party is the blockchain. Because the blockchain can't enforce that you actually hand over real ownership rights to correspond with the NFT ownership.
> An NFT needs to have some kind of rights in the contract or it's a scam. Notably you at least need exclusivity!
If I own a piece of paper my country's legal system will accept as meaning I own something, why would I also want a piece of virtual paper that a bunch of people on the internet will accept as meaning I own some sort of rights to something.
> But that doesn't make it "redundant". It's a way of making a contract, not a replacement for contracts.
What NFT can I use to make a contract that any real legal system will accept?
> If I own a piece of paper my country's legal system will accept as meaning I own something, why would I also want a piece of virtual paper that a bunch of people on the internet will accept as meaning I own some sort of rights to something.
So you can buy and sell it easily, and show everyone that you own it.
That's much better than paper!
> What NFT can I use to make a contract that any real legal system will accept?
Surely they have terms of service? That's where the legal system ties in.
Well for one, NFTs on art create a unique money laundering strategy.
Drug dealer buys an art NFT for $1k (using legit money), sells the NFT plus a bag of drugs to someone for $10k. They just made $9k in "artwork" profit, which is clean money....and since the value of art is always subjective, it can't really be questioned. On top of that, all monetary exchanges and transactions can be handled via smart contracts, so this reduces risk to everyone involved.
Access to markets. Like it or not, there are many, many wealthy cryptocurrency holders. NFTs are a way of exposing the new artist class to the new rich.
I suppose the reality one would have to buy in to is that people were previously sitting around with tens of thousands in disposable cash ready to spend on art, but were held back by the fact that ownership of the art could not be proven digitally.
This is exactly what I don't understand. If it's the same art, why does it matter if the art is in an NFT or in a physical representation? Like, why are people buying pieces of art using NFTs?
Digital art doesn't have a natural physical representation, and people find it interesting to get rid of the requirement for creating and maintaining one just to make it a thing to exist as art. I.e. fundamentally digital art pieces are today often sold as part of installations which are a pain to maintain long-term. Or as physical media, which also are difficult to maintain long-term, or if you don't require the specific media to be preserved you get into the chaos of which later copy is an "original". That really only works at an expensive high end.
Or you don't create exclusivity and sell it cheaply, but while people do buy e.g. music that apparently doesn't work as well for other art forms (artists certainly have tried).
Limited/unique prints apparently do work (as in people are willing to spend money on those), but limits you to static 2D media.
In principle nothing stops you from selling digital art with licenses like we do sell software with licenses, but that hasn't caught on, for whatever reason. (I'm actually expecting that to be added to NFTs soon-ish)
Enough people do seem to be currently willing to accept the concept of an NFT representing ownership of a digital thing to put a price on it, and that price is noticeably higher than what they pay for non-exclusive digital art. For many artists, that's reason enough to use this new avenue to sell their art.
Previously there was no way to credibly sell an "original". You can produce a commission for someone, but the nature of a digital artwork is that anyone you show it to has the whole thing.
To a certain extent this was already the case with photos, and IMO that's part of the reason that prices for photographic artwork are much lower than other media. You'll sometimes see photographers selling a series of 500 numbered prints (or whatever) as a sort of a way around that, and NFTs are kind of a more digital version of that.
No, the NFTs are a separate thing which apparently has some sort of sentimental value. The digital artwork is still whatever it was before. I could sell an NFT for my cuckoo clock. It has nothing to do with my cuckoo clock.
It's akin to a certificate of authenticity for a numbered print in a series. Anyone can make another copy of the print, and it doesn't really matter which copy a certificate goes with, but without the certificate the print is worthless.
One amazing use-case is recurring revenue on secondary market sales by coding royalties into the smart contracts. Artists used to die poor and their family saw nothing as their work skyrocketed in value. Not anymore with NFTs.
