For our first post on the JBR blog, it feels natural to address the elephant in the room. We are a brand for artists, trying to help them achieve financial independence, in the midst of the largest crypto boom in history. So certainly we have a hot take on NFTs, right? Well, the truth is a little more complicated…
There are a lot of controversies, myths, and general bad blood related to NFTs. To start this off, let’s get some basic definitions out of the way:
Non-fungible tokens, or NFTs, are essentially a template for a contract that allows the transaction of digital goods. More simply, it allows you to buy and sell the ownership of digital art. There is a commonly spread falsehood that NFTs were created as a one-off project for a hackathon, but in reality NFTs were one of the first use cases for the blockchain!
The first contract template for NFTs, ERC-721, was made for the Ethereum blockchain. But nowadays, virtually every blockchain available has some variation of a NFT contract. The contract contains two addresses (the buyer and the seller), and the metadata of the original image (the who/what/where of the art). Oftentimes a contract also has a pointer back to the original producer as well, so that the producer can own royalties on future buying and selling of the art.
The most common criticism of selling NFTs is the same criticism that selling digital art used to have – that is, the “right-click” problem. Why would you bother buying digital art if you can just save a copy of it online? Well, back in the day there was no good answer for this, and hence digital art was perceived as worthless – the only way to make money on digital art was to print it to be physical or otherwise make money on commissioned art. With NFTs, however, the assumption is that the value is not in the copies, but in the original ownership, which is defined by the contract. The contract, which cannot be copied due to the functions of a blockchain, essentially prove that you own the rights to a given piece of work.
And this is where NFTs begin to fall apart.
You see, art by default is a weird product. While most things give a straight-forward, tangible economic value, the value of art is in esoteric concepts like beauty, narrative, and emotion. In this case, a copy of the art will give you just as much value as the original! This is the same reason why we’re fine putting up prints of Rembrandt in our house as opposed to the original copy – any version of a piece of art (provided its not stained with a watermark or at some untenably low resolution) will give you the value that you want.
In addition to this, “NFT bandits” – people who put up NFTs of copied work – have found that the contracts have massive, concept-ruining loopholes. Remember when I said that NFT contracts stay on the blockchain forever? Well, if you make a NFT of art that has not yet been posted onto the blockchain, you can fix it to look like yours is the original and every future upload is a cheaper copy! At that point it becomes an issue of he-said-she-said, and it is a lot easier to create a forgery of digital art than physical art.
So, in conclusion, NFTs are a cool idea. If there ever becomes a day where its possible to buy and sell digital art easily and legitimately, it will be of great benefit to artists and consumers alike. And while the blockchain does get us closer to that path, the technology is simply not there yet for it to be viable. It is for this reason that JBR does not recommend its artists to use NFTs as a point of revenue.
For more information on NFTs and the terminology used in this article, the OpenSea NFT Bible is the current de-facto document for NFT knowledge. Please note that OpenSea is an NFT marketplace and thus the article has a slight bias towards pro-NFT behavior, but it has been vetted as an overall neutral publication.
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