Ownership: The difference between NFTs and traditional physical art

Author: Mandee McFerren

                                        Image source: https://unsplash.com/photos/oLhTLD-RBsc

Throughout history, artists and art dealers have made moves to increase the value or scarcity of certain works – such as Parisian galleries limiting the number of certain prints sold in the 19th century, or artists keeping a section of their work off the market to increase the scarcity and price of their other works. As we have entered the digital age, this has become more difficult, as digital copies of art or digital artworks are often easily accessible, saved, and shareable.

In the past the price of a piece of artwork has been determined by multiple factors, including an artist's exhibition history, sales history (if any), career level, and size of the artwork in question. This led to a fairly predictable art market, at least in how sales were made and prices determined, following the simple economic rule of supply and demand. There is only a certain amount of art on the market at any time, with the scarcity, popularity, or uniqueness of an artwork helping determine its value.

For a long time, this meant that artists who created within the digital realm would not reap the same benefits as a traditional painter or sculptor, because the element of rarity was not there. People could search, see, and save that art without spending anything, leaving digital creators far behind on the earning scale.

In the past decade, the digital, economic, and art world have all started to collide. Digital art is more prevalent than ever, and creators were looking for a way to monetize their work.

That's where NFTs come in; NFTs are certificates of ownership of a unique digital item such as a video, recording, or cyber artwork that reside on the blockchain. Once NFTs are “minted,” with a unique corresponding code for the digital item being permanently woven on the blockchain, the NFT can be bought or sold using cybercurrency on a variety of digital marketplaces.

The ownership of NFTs have created waves in the traditional art market, bringing up a variety of questions regarding the ownership of art, how owning an NFT is different from owning a physical piece of art, and how this changes the art economy.

So what’s the difference between owning a piece of physical art and a NFT?

That depends on how you look at it. In both cases, if you pay for the piece of artwork, you own the art. However, ownership becomes a bit more complicated with an NFT as it is a digital asset, meaning that it is available digitally to others even if you own it. If you own a painting by Picasso or a rare baseball card, you can choose to keep it hidden and only show it to select people. The same is not true of an NFT, which can usually be easily found on the web. While the item still belongs to you, the same ability to keep the work private does not exist.

What’s the point of buying an NFT if anyone can see it?

Many proponents of NFT art see it as more of a form of patronage– a way to support your favorite artist monetarily. The ownership exists in bragging rights and the ability to sell the ownership to the work in the future if you so wish. Your name is also attached to the work while you are the owner, much like if you owned a painting being displayed in a public museum– while everyone could see the painting, your name would be on the plaque below it indicating you as the owner.

Why would you collect NFTs over physical items?

A variety of collectors exist in the world, and NFTs are simply adding to the ways and things that people are able to collect. While digital, NFTs are still a collectible asset, with the ability to be bought and sold the same way as a physical item. As technology progresses, people are consistently owning digital things – music, movies, books, and photos are available on our devices – making the concept of owning something digital less foriegn. Art collection through NFTs gives people the ability to own unique digital assets while also supporting digital artists and creators. It doesn’t have to be an “either/or” in that a person must choose NFTs or physical item collection. You can do both!