What is an NFT?
NFT or commonly called NFTs are all the rage. Why?
Many people discuss NFTs as if they are the IMAGES that are in the profile pic (PFP) projects. That is not specifically accurate, and more importantly, it depends on how the project built the NFT on what they actually pass upon purchase.
That is CONFUSING JOSH!
I agree. So, I want to break it down for you a little. An NFT is a document that conveys title of ownership*. This could be of an image or of a physical thing, depending on jurisdiction. The law makes this a bit squirrelly, but ultimately think of it as a digital title.
But, I bought an image!
Yes, kind of… But what you actually bought was the title to the image, and that may not have conveyed any property rights of publication. But maybe…
See, squirrely. You are 100% getting the rights of the thing you think you got, the image, and you might be allowed to use it however you want, maybe.
This is where all of this gets super confusing and frustrating. I am regularly asked if they have the rights to profit from the image when a person or entity buys a NFT. And the simple answer is, if you are not sure, don’t do it.
Some projects do pass these rights to the end user. Most that do, specifically tell the buyer, you now have specific rights. And most will also reserve certain rights.
Josh… then why buy an NFT?
There are all sorts of reasons why people actually do buy NFTs. Some are art or collectibles collectors. It just makes them happy to “own” these things. Ownership is a real reason to purchase NFTs. Before the advent of NFTs, digital “ownership” was a license. This conferred NO ownership to the end user. So SOME ownership is vastly superior to NO ownership.
So, I can kind of own something, cool.
This is currently being battled over in the offices of old-timey lawyers, and licensing agents. What makes this interesting in the market is not waiting for these legacy rights holders. They are making new things and IP, that actually pass IP by ownership of the NFT.
I know this can go above the head of many readers, but I will keep doing write-ups on how this market works, and how I see it. Obviously spend some time researching what you are getting when you buy something.