Interdisciplinary Cryptoeconomist and semi-professional poker player | Bitcoin Tsundere | co-founder of InstaLiq DAO
OK, so I’ve just minted an NFT using the picture above (yes, it’s on auction). Notice my language: I have created a digital image and I have minted an NFT accompanying that image. The image and the NFT are not the same thing.
There’s still a lot of misconceptions about people’s understanding of NFTs. These came up very recently again with the Australian van-dweller who created a website for “pirated” NFTs.
So let’s start with…
What NFTs are not
First of all, NFTs are not art. They are a technology that is most widely used by digital artists, but there are all sorts of use cases for NFTs beyond just that. Or, to use a different example: you can use your computer to create art. That does not make your computer an art piece.
Secondly, they are not the art pieces they represent. Both “right-clickers” and, I guess, most of the people who buy NFTs, seem to conflate these two concepts in their minds.
The problem with digital art is that it can be copied endlessly. This is why digital artists use NFTs to monetize their work. Even with NFTs, the value of digital artwork is still zero, since they can be copied over and over again. NFTs on the other hand can hold value since there is only a finite sample for each art piece and the artist testifies that whoever owns the NFT also owns the art piece.
To use an example here as well: I have a beautiful replica of a Salvador Dali painting in my living room. But as much as it ties the room together, this neither makes me the owner of a Dali, nor does the ability to print cheap replicas lower the value of Dali’s art. In a similar way, the ability to “right-click and save” NFTs, not even the ability to create a website with Terabytes of NFT images, lowers the value of digital art NFTs.
What NFTs are
NFT is short for non-fungible tokens. In crypto, a token, as long as it’s transferable, is typically understood as something that holds value, an asset in other words. In contrast to fungible tokens (aka cryptocurrencies), where you can always transfer a Bitcoin for another Bitcoin and also break down a Bitcoin into smaller fractions, NFTs do not have this property.
You cannot simply exchange one CryptoPunk for another (unless both trade parties agree that they are equivalent in value). Also, you cannot break a CryptoPunk down (unless you wrap it into a fungible token for fractional ownership). This means that NFTs can be used to represent material things in the offline world, such as a car deed, house deed, insurance policy, or debt claim.
In the context of digital art, NFTs are used to represent the ownership of immaterial things, namely digital art pieces. I guess the easiest way to understand the concept of digital art NFTs is to think of them as authenticity certificates. This is really the one and only thing NFTs do. They certify that whoever owns the NFT, is the owner of the authentic digital art piece.
Interestingly, when thinking about NFTs merely as authenticity certificates, it doesn’t even matter that the images they represent are centrally stored, as the creator of The NFT Bay notes. When you get a painting certified, the authenticity certificate is not attached to the painting either.
Neither does the certificate ensure that your painting won’t get destroyed or stolen. You need to take other measures to prevent this. But if that case happens, you can still prove that you are the owner of the artwork. In that light, it actually does make sense to right-click and save any NFTs you own yourself - or, ironically, use The NFT Bay in case your NFT 404s.
The picture above is of course a twist on René Magritte’s 1929 painting La Trahison des Images (“The Treachery of Images”). The painting features a pipe, followed by the words “This is not a pipe”.
With NFTs, the treachery of images is now taken to the next level. What you see in the title picture is the infamous burning ceremony of a Banksy painting, to “turn the painting into an NFT” (yeah I know, it’s a photo of the burning…just shut up, René).
One might think that the words below the photo comment on the ceremony. As noted above, burning the painting has not turned it into an NFT, it just destroyed the last remaining physical copy of the painting.
Actually, the NFT speaks for itself. The picture on top of this page is of course not an NFT. It’s a digital image stored on Hackernoon. Even if you look it up on OpenSea, what you are seeing is not an NFT. It’s still just a digital image.
There is no possible way to see an NFT with your naked eyes. They are immaterial goods that you cannot see but own. NFTs are inherently treacherous and right-clickers, collectors, and artists worldwide are falling for their deception.