Non-fungible tokens, or NFTs, are a relatively new concept making some people a lot of money and hitting that FOMO in a lot of people. It’s billed as the next big thing after cryptocurrencies that the everyday person can get involved in, providing real value by making unique digital products that can only be owned through the NFT.
The thing is, NFTs are not what they are marketed as, and not what people think they are.
In fairly high end collectibles, you will, often, get some kind of certificate of authenticity along with the collectible. But with physical objects, you get that object and that certificate. You can display this object and say “Yeah, it’s real, here’s the proof”.
Now imagine if all you got was the certificate, but not the object. That’s NFT. You get that authenticity certificate, but not the art, media, or other digital asset all to yourself.
In the art world, copies of art do exist, but they are not perfect copies. There’s an entire field around authenticating art as authentic by studying the work itself to determine if it’s the genuine piece or if it’s a copy. But in the digital world, that piece of art can be copied perfectly. The binary 0s and 1s are the same. There’s nothing to distinguish the two files. Cryptographic checksums are the equivalent of those art analysts, and they will tell you they are the same.
That $10,000 NFT you bought? I can have that same art asset for free, right now.
Now, some might argue that purchase of the NFT transfers ownership of that work to the new owner, and this is not entirely true. Prefacing this with the fact I’m not a lawyer, copyright or otherwise, the way that I understand how copyright law works, that transfer can be revoked at any time for any reason (albeit, likely through a tough uphill legal battle) and you have no legal recourse. Additionally, this type of licensing of art has existed since the concept of copyright has existed. NFTs don’t change this.
Additionally, the new “owner” of a NFT can’t really stop copying of “their” art. Only the copyright owner can take any action.
A NFT is literally just a token that says “yep, this is legit” but anyone can have the work. It’s quite literally just a certificate of authenticity backed my cryptographic technology. It’s not the work itself. When you buy a NFT, you’re buying a cryptographic signature, and that’s it.