NFT digital art tokens have rebounded a lot of echo around the world in recent weeks. Offering uniqueness and some cryptographic ownership to their holders. But let’s ask ourselves: what are people actually buying, buying NFT? It may be suggested that in the case of the NFT, a new type of cultural economy is emerging – built around one of the oldest forms of cultural production: patronage.
NFT tokens – economic and legal context
Regarding the theory of property rights, economists tend to speak of property rights not as a single thing, but as a set of separate rights subject to law, contract, and even custom. For example, you can own a property without actually owning it. You can own an asset without the right to transfer or transfer it. Or, you can control something without having the right to exclude others from using it.
Property rights are very specific. I can write an agreement to transfer my property to someone, but at the same time specify that I keep physical access to it or maintain a revenue stream from it. The art resale framework is a good example of building the idea of divisibility of these rights.
Buying a digital artwork as an NFT means owning the good without excluding others from using it – or at least having fun watching or listening to it. The pleasure a buyer gets from having something is the very experience of having it. How much is such an experience worth? These crazy NFT prices we can see right now are nothing more than the process of discovering the true value of owning such non-exchangeable tokens.
Hit or putty?
There is a long tradition in the art world of loaning to a (selected) museum for private and public enjoyment. However, some private art collections are kept away from the eyes of the public.
An artist who receives a single paycheck from a wealthy NFT investor is no worse off than an artist who receives a greater number of smaller payments from consumers of culture. On the contrary – he probably earns even more. An NFT-funded artist may also continue to work in an open cultural space. He can get fans on social media, sell his merch, or just share his art with as many audiences as possible.
Therefore, a major objection from the cultural community is that the NFT is a step towards an art market dystopia where only a few are allowed to use art and culture artifacts. However, this view may be wrong. NFT allows us to finance culture (and artists), while leaving access to the experience for everyone.
This is very similar to the traditional patronage model. But … It’s much more beneficial. NFTs offer the benefits of sponsorship at no cost. Wealthy people can still support the arts and enjoy the ownership experience (ownership of a work can be proven cryptographically). The art itself remains free (until you can get to know it) to the general public.
To fully understand the vision presented here, of course, we need to understand several dependencies. Artists and platforms must have a clear ability to provide merchants with their ownership of the work. Therefore, people who are assigned such property need appropriate tools and knowledge of the mechanisms of displaying a given work of art. When it comes to sharing such art, we need a widely accepted Creative Commons-style framework to set a standard of practice for the use and dissemination of works. However, it is in a digital world where copying content seems to have limitless possibilities that seems to be an extremely difficult task.
For now, the NFT standards provide the basis for exciting innovation in the financing and production of culture.