Right. Buying the NFT gives you no IP rights. Therefore you can “right click, save as” for free and get the same value as buying the NFT, which is zero.
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The market for investment grade NFT art is not zero.
Most of it is still zero. Most artists do not know the difference to make a better approach at value.
Buying a canvas gives you no IP rights. That is nothing new. A few artists have value when they paint. Most do not have much value in their art.
You can copy The Mona Lisa with a right click that does not mean anything to the value of The Mona Lisa in the Louvre. Same with Picasso paintings.
The qualities that make art valuable are ephemeral yet the investment in some art is intergenerational. Most people can not grasp that. More people can not figure out how to make money off of it.
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That’s because the original painting is physically different from all the copies. That is not true with digital art. Digital art is not physical, it is virtual, composed of digital information. A copy of that information is identical to the original. Since the original is indistinguishable from the copy, there should also be no difference in value. This means that unlike the Mona Lisa, the ability to right click copy digital art eliminates the value of the original. The only thing of value in digital art is the copyright. Ownership means nothing.
Consider as an example the Declaration of Independence. The original work is clearly distinct from the millions of copies made. That gives the original its value and explains why it is kept under such high security and care. Imagine instead if the original Declaration was a pdf file electronically signed by all the delegates. All the copies made of the original pdf are indistinguishable from the original. Given that, why would anyone care about the original pdf?
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I never said other wise. Not sure who you are trying to educate. I have been a digital artist now since 2014.
The point is the substrate for the art has value. The canvas is selected as the token is selected to be a one off.
The difference between the digital copy on a particular token is the token ID or hash. You can not take that away no matter how you try. Since digital work is not like physical work you can not use the Declaration of Independence to make a difference that matters. It is different. But it is a one off.
When the Martians finally take over they wont care what the one offs were. Only mankind cares. You are not changing that about NFTs. You are just picking a down market to try to make a weak case.
Not even sure what this means. My point is that because the nature of digital art means that copies are identical to the original, owning the original has no value. I’ll give you an example.
Here is the website where one can download Beeple’s ‘Everydays: The First 5,000 Days’, the 3rd most expensive art NFT every sold. The owner has waived the copyright protections.
Since one can now download the artwork with the copies indistinguishable from the original, does the original have any value? Do you or anyone else have any desire to see the original file, and if so, why? Would anyone here now pay money to own the original?
This differs from the Mona Lisa painting. No matter how many copies are out there, people are still willing to pay money to see the original.
That is the curious nature of digital art. Once displayed, it can be copied. Once copied, the value of the original declines. The NFT ownership doesn’t really matter. What matters when it comes to money is the copyright. That being the case, it is difficult for me to see the value of owning the NFT for investment purposes.
But I am probably missing something.
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I cannot avoid thinking about bottles of “Holy Water” from the Jordan River or the spring of Fatima or… In my reality the water is H2O with mineral impurities that no one will ever test because irrelevant to being HOLY as strongly proclaimed by the label on the bottle, and so it is the label on the bottle wherein the value lies…
Weird. And I have never bought any.
david fb
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@btresist What is it baseball cards printed prior to 1971 were in different supply than baseball cards made after that date.
Dont ask me why human beings collect baseball cards.
Same with art. And is becoming the same with NFT digital art. Regardless of this down market.
Does not make it logical but the CARG of oil paintings that are investment vehicles (not most oil paintings) is 25%. If you need logic start with the annualized average return but do not assume a bad market point in time is the last word on it.
You may actually be right stupid stuff. But if your massive corporations is going to be gone 150 years after your passing the nature of the life of a corporation they all disappear eventually, then think of your art collection as a few chips on the table that will be here generations later as an excellent investment. That includes some NFTs.
Then think, NFTs matter to younger very monied collectors. Who are you to say? It is not your call.
Yeah I have never owned a bean baby. I dodged a bullet. Mind you Bean Babies have never been collectable high end art.
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Leap1
No problem with your POV. I have been collecting art (mostly oil, some high end graphpics) and my CAGR for the whole shebang is in excess of 20%. The stuff I bought with no intent of anything but pleasing myself has outperformed that insanely. A set of original Tom of Finland “throwaway” calendars (one for a Finnish Motorcycle Club) has skyrocketed beyond all credibility. I used to hang it in private parts of my home but now have it locked in a humidity controlled vault.
(I knew Tom and helped establish the Foundation)
My two Max Beckmann limited edition prints that cost me about $1200 in 1987 are now, well, literally invaluable.
Human desire puts odd twists on economics.
david fb
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I am not gay but I would kill for a Max Beckmann.
Beckmann was not a gay person. But he was tough, in himself as well as in appearance.Oct 5, 2016
It is not so much that I like the style that much. But the style screams out fine art value.
I will add…
Fine art is a period of meaninglessness. Koons and Hirst’s perfect commercial compositions with no meaning or import, then into the Chinese quagmire with no chronology and back to Beeple’s retrieving of western history in a chronology back from the Chinese intrusion but of a dirty meaningless world. Finally the Bore Apes and Cryptopunks are cartoons with no meaning.
Noting a massive generational shift that is final. NFTs have come of age but are down badly for these couple of years.
Why my art? Animations are a new value in the NFT world that are suppressed by the troubles of rendering with GPUs. The split between game videos outtakes, sports outtakes and fine art animations on the high end leaves animation projects that need exploring. That is what I have done. Will it sell? Anything online can sell but ads are ultra competitive in nature to get that to happen. The more competitive the ad in effect the less costly the campaign.
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I think proven wrong they will just find something else to argue about because after all everything is a Tulip to them. 
Andy
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I don’t question that people collect things. And I fully understand that art, whether physical or digital, has value. What I am questioning is the value of the NFT when it comes to digital art.
There is one fundamental difference between physical art, such as the Mona Lisa painting, and digital art. The Mona Lisa cannot be totally duplicated, at least not with existing technology. The original painting remains unique and identifiable no matter how many copies are made of it by whatever techniques one wants to use. The original being distinct from the copies is what gives the original added value. That’s why an original Picasso is worth a lot more than even the best copy of that original.
This is not true of digital art. One can copy digital art completely such that the copies are indistinguishable from the original. That’s a big difference from traditional art. Suppose I create digital art that lots of people want that is registered as an NFT. Suppose my artwork somehow gets posted online and now a milliion people have a copy that is identical to my original. The original now has no value even with an NFT registration showing my ownership.
It was said earlier by syke6 that “Buying the NFT gives you no IP rights.” In other words, ownership of the artwork NFT and ownership of copyright are two different things. As far as I can see, only the copyright ownership is economically relevant with digital art. Therefore, I can understand why an investor in digital art would want to own the copyright. I don’t understand why an investor would care about the NFT.
But once again, I am probably missing something.
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There is a huge market for it. Right now that market is flimsy.
The difference in the top end of the fine art market is 4000 families of huge wealth in the main stream old guard gallery system verses 30000 wealthy individuals often younger but not necessarily as wealthy who are in the NFT market.
There is too much greed for you to dismiss it rationally. The greed will be manic again at some point in the next two years.
This isn’t about why people buy NFTs. It is about what they are buying.
If I buy a statue from an artist, I get a physical object. With ownership I can do whatever I want with it. I can put in on my roof, paint it yellow, dress it like a clown, or give it to a friend. What I can’t do is make copies of it and give it away because I don’t own the “concept” of that statue. That intellectual property stays with the creator until he/she gives it up in a separate transaction. Despite this limitation, having an original Rodin in my front yard has tangible value.
With digital art, there is no physical object. The artwork is itself a concept that only exists virtually in the form of organized information in an electronic file. The ease of copying computer files means that if I buy digital art without also obtaining IP rights, I can’t post the artwork on my facebook page or email it to my friends to see without potentially violating copyright laws.
In effect, with digital art the intellectual property IS the artwork. Owning the NFT is to own very little, essentially limited to the right to look at the artwork offline. The value comes from owning all or part of the intellectual property, a legal agreement that as far as I can see is NFT-independent.
If all this is true, then who cares about the blockchain? If I want to invest in digital art, I am going to get a lawyer and make a deal with the artist to buy the intellectual property rights. Old fashioned economics using old fashioned accounting and traditional dollars.
The assumption seems to be made here that digital art is dependent on NFTs. It isn’t. NFTs are just claiming to provide improved functionality for the trading of digital art. Perhaps it does, but I am not convinced. The ownership and IP issues appear to me to be too complicated to be handled by blockchain.
But I am probably missing something.
If I own a cable network or now a streaming service and we license a TV show it is not a physical property. But look at how much money is involved. Those digitized programs have value. Licensing is a form of ownership for the artists as well.
Digital products have value.
Next you will say this is not about value but you are kicking the tires on the values.
Not true the DMCA allows for the free transmission of digital images and music on social media, search engines and the internet in general.
It is not true and you are just going on and on. The collectors care about the blockchain. You do not care about the blockchain.
It is the use of the network/streaming service by a paying customer that makes it (the network) worth anything. A TV show is a performance by one or more people (can be cartoons–but people created the works), so the viewers are watching (paying for) that performance. Number of copies is irrelevant because the viewer PAID (one way or another) to view each performance. Thus, buying the VCR/DVD/whatever copy for yourself/your family is still paying those who created the performance. Kids DO watch the same thing over and over again. All that does is mean the cost of ownership (buying vs renting) is lower for buying.
And that seems to work really well for all parties involved without the use of NFTs and blockchain. So based on your own analogy, why bother complicating things with NFTs?
That’s the main question. Is there any evidence that the average artist has significantly benefitted from NFTs? Those who sold works during the bubble did, but is there any indication of a sustained benefit for most of the art community? Afterall, NFT fees are pretty high so there needs to be considerable bang for the buck.
Great. But as soon as the digital image or music gets posted on a public website it can be downloaded for free by right-clickers. How do you think that would impact the value of the original?
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It makes something that’s near worthless even more worthless?
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Worth is in the eye of the beholder I guess.
I’m certainly no expert on this issue, but it seems to me that the valuation of a work of art is based on two factors, popularity and exclusivity. The exclusivity of a physical painting is based on the difficulty, if not impossibility, of creating an exact replica of the original. The original will always be physically different from its copies. In contrast, the popularity of the painting is indicated by how frequently the image is copied and seen. Munch’s The Scream is so often displayed that it has become an international symbol of angst. That popularity enhances the value of the original painting (sold in 2012 for $120M).
Compare that with digital art. The ease of making exact digital copies creates a very different dynamic. Now copies can be quickly made that are indistinguishable from the original. The more such copies produced, the less value the original will have. Exclusivity would seem to require limiting the public availability of the artwork, but then how does the artist generate demand?
Music has similar challenges and this was solved by the development of streaming services that make songs available to the masses while paying royalties to the musicians based on song popularity. That seems like the most effective business model for digital art, a Spotify for art (Spotifart?).
Note that the music solution seems to work well without NFTs and blockchain. Not clear how either would improve the music business model.
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Does not matter at all.
The Mona Lisa is everywhere. Picasso images are everywhere. It makes no difference.
Fresh air and polluted air are everywhere. Makes no difference to The Mona Lisa.
What makes a difference is what people are willing to bid. Yes the NFT market is bad right now.
The two observations are related.
One version of the NFT story - the one where NFT’s aren’t beanie babies or just a scam - is a story of technology. Art investors believed that NFTs were (or could be) the technological solution to the scarcity problem for digital artworks. Digital artworks can be perfectly reproduced, which enormously complicates establishing uniqueness and provenance. NFT’s are demonstrably unique. Thus, it was believed they could be used to efficiently solve the problems inherent in demonstrating ownership of digital works.
However, as the technology was put into practice and non-tech people started learning how it actually worked, it has become apparent that NFT’s aren’t a solution to this problem, and likely can’t ever be. The NFT is unique - but the NFT can’t establish ownership of the digital artwork. Note that I’m not talking about IP or copyright or any of the other rights that are not normally transferred by an artist when they sell a physical painting: just ownership of the piece of art itself. The NFT can’t establish that ownership. That has to be done using off-chain information, and pretty much the same type of information that’s normally used to establish provenance.
Since NFT’s don’t solve the problem that people thought they would be able to solve, they’re not going to play much of a role in the digital art world - or in society at large. Which diminishes “what people are willing to bid” for them.
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