What Do You Get When You Buy an NFT?

There has been some debate going on in the NFT world around models of ownership and Intellectual Property. This kind of working-things-out-as-we-go-along is all part of what makes the NFT space so unpredictable.

Sometimes it’s nothing but Discord degenerates flipping pixelated frogs, as the floor flies through the roof, and people start posting photos of the new Audis their profits solidified into.

Then a philosophical JPG collector, who may or may not be gangster rapper Snoop Dogg, will come along and ruminate about Baudrillard, and what art even is anyway.

And then, just to keep you on your toes, there will be an impromptu online legal seminar on Intellectual Property, and how you had better sell that Audi because you are about to get sued for copyright infringement.

In which case, we should get to grips with precisely what models of ownership are available and in use.

Creator IP

This means that you have bought a token on the blockchain showing that you own an underlying item, most likely (in the current phase of NFTs) an image of some kind, but you are not the Intellectual Property owner, because IP belongs to the creator.

When you really think about it, it’s a little strange: you have ownership of something proving you have ownership of something else. And, as copyright ownership relating to the underlying asset still belongs to the original creator, you cannot do much with your purchase other than look at and display it and revel in the joy of ownership.

However, if this sounds pointless and silly, then beware that you are entering into a deep philosophical vortex in which you will be required to discuss value, scarcity and authenticity, and you might end up concluding that everything is pointless and silly, but you would still rather own a CryptoPunk than not own a CryptoPunk.

And, by the way, this is nothing new. When purchasing traditional art, photography or music, you’ll run into the exact same legal issues around rights ownership and IP. In general, when you buy a work of art, whatever the medium, you don’t take ownership of the copyright.

My two cents is that a creator-owned IP only really fits a particular type of NFT. It is a conservative approach, identical to pre-blockchain, real-world standards. Don’t get me wrong, there is nothing wrong with conservatism, but in a realm as transgressive as crypto and NFTs, I’m not sure this model is the best fit. Or at least, it is only suitable for a few projects.

CryptoPunks might be a collection for which this model seems apt. Punks are, after all, the definitive blue chip, and derive historical value simply from being Punks. Perhaps the same applies to Fidenzas and some other Art Blocks pieces too, which seem close in character to the traditional art world. These are the kinds of items that can sell at Christie’s and Sotheby’s, and garner attention from art writers.

As stated, this is the normal world standard model, but NFTs are interesting because unlike (for the most part) with traditional art, there are some alternative ownership models being implemented, which are more conducive to flexibility, growth and adaptation.

Collector IP

With this model, when you purchase the NFT you don’t only get the token (giving ownership of the underlying asset), but you take ownership of the IP relating to that asset too.

As mentioned, this isn’t usual when you purchase art, as the IP stays with the creator. As such, transferring an IP to the collector might make buying an NFT seem more attractive, open to experimentation and potentially a lot more fun.

With this model, you don’t just have ownership of an image but also an asset that you are free to play with and utilize as you wish, should you want to get creative, and it could seem like you are getting more substance for your money.

As it happens, Bored Ape Yacht Club (currently the most hyped-up of any NFT project), utilizes exactly this model. And, there are several examples of IP ownership being put to use, such as BAYC-themed wine being made and sold independently of BAYC itself.

Creative Commons (known as CC0)

This essentially means that no one, not the creator nor the buyer nor anyone else, owns the IP relating to the asset. Being in the public domain, there is total freedom and maximum creativity, as anyone can use the imagery however they please, opening the door to endless derivatives. Nouns, Blitmap and Cryptoadz are big collections that were sold under a CC0 model.

This approach is the closest to the open-source radically libertarian philosophy that characterized the web in its early days, but that has been lost as power has been centralized around the Big Tech giants.

Personally, I’m not sure that it is entirely in keeping with the philosophy of crypto and NFTs. After all, while crypto (or Web3, if you prefer), is all about decentralization (and that is a great thing), it is also about immutable records of ownership and personal sovereignty over your digital identity and assets.

In the end, it comes down to the personal preferences of each creator, as they weigh up what exactly their project is intended to be. But, while multiple ownership models can concurrently exist, it should always be made clear, in the simplest terms, which category of ownership an NFT carries, so that collectors are always fully aware of what they are buying into, and what they can do with their collection.

Sometimes it’s nothing but Discord degenerates flipping pixelated frogs, as the floor flies through the roof, and people start posting photos of the new Audis their profits solidified into.

Then a philosophical JPG collector, who may or may not be gangster rapper Snoop Dogg, will come along and ruminate about Baudrillard, and what art even is anyway.

In which case, we should get to grips with precisely what models of ownership are available and in use.

Creator IP

Collector IP

With this model, when you purchase the NFT you don’t only get the token (giving ownership of the underlying asset), but you take ownership of the IP relating to that asset too.