Art Blockchain, Digital Art, the Art World and the Value of Non Fungible Tokens (NFTs): The Devil Truly is in the Detail…

Know what your rights are when buying NFTs. Desert X 2021 Exhibition.

The Rise of NFTs

Established art gallery, Pace, recently announced the launch of its NFT platform “…for showing and selling…” digital art non fungible tokens, set for launch in September 2021, with its inaugural offering being “… a series of NFTs from…Lucas Samaras’s “…archive of digital works…”. The Platform promises both primary and secondary sales, and, interestingly, to include “…digital Samaras prints…offered as physical tokens to accompany the purchase of the NFTs…”.

A Legal Perspective

A good place to start in understanding the value in NFTs, digital art, crypto art, or whatever you want to call it, is in its emerging legal definitions.

Bitcoin as a Controllable Electronic Record

The classic example of a controllable electronic record is Bitcoin.

Not All Records are Made Equal

While Bitcoin may have inherent value and a bunch of them worth millions of dollars, with other records, whether physical or digital, what rights the record conveys depends what it says.

Sweeping up Non Fungible Token misconceptions. ‘Big Sweep’ by Claes Oldenburg and Coosje van Bruggen. Aluminum, stainless steel, and polyurethane resin painted with acrylic polyurethane sculpture. Denver Art Museum.

Value in NFTs

But legal definitions are not enough. We need to understand how NFTs are structured. This detail is often not clear when we see NFTs on digital art platforms like Nifty Gateway, SuperRare or others.

More to Metadata than an Image

But while the image (and its scarcity) is crucial to defining value, so are the rights that the NFT conveys to you.

Moral of the Story

Is really: look under the hood when you buy and sell crypto art and ensure, not only that the NFT is structured correctly so that it truly is a limited edition or unique work of art and is not susceptible to ‘link rot’, but also that you are giving or getting ownership in the exclusive limited edition or original work of art, as a collector would expect in the real art world.

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Sam Miller

Sam Miller

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Founder: TheFineArtLedger.com, blockchain powered fine art title and authentication platform, art collector, Rimon P.C. corporate finance attorney. Venice, CA