What does non-fungible tokens (NFTs) ownership mean?
In understanding what NFT ownership means you need to understand what NFTs are. If you don’t then please check out our article here.
In answering this question we are purely looking at what NFT ownership means for NFTs in the art industry.
NFTs in the art industry contain a piece of artwork. This is almost always a digital file such as a JPEG.
Read the NFT Description.
Every NFT is unique which means you need to read the description of the NFT to understand what you are buying. Let’s look at a few examples.
Single Edition NFTs – with no other market
A Single Edition NFT with no other market is an NFT which contains the only copy of the artwork available for sale. This means owner of the NFT owns the digital file of the artwork and that the artist and curator will not sell any further copies of this artwork.
Apex by Seeress is an example of this. Take a look at it here. See how the description describes what you get:
- Unique artwork by Seeress which is only available as a single edition NFT.
- Only one copy of this artwork will be issued as an NFT.
- The artist also undertakes that no digital copies or printed copies of this artwork will be sold making the artwork held in the NFT unique.
- The unwatermarked artwork is protected in the NFT’s unlockable content and can only be access by the owner of the NFT.
Commercial Rights NFTs
Commercial Rights NFTs gives the buyer some commercial rights. These rights can be wide ranging so it’s important you understand what rights you get with each NFT. Take a look at Tortured Minds by Michael Paul Bennett here. See how the description clearly describes what you get when you buy this NFT:
- This NFT is the original JPG file with an image size of 13500 x 9000 pixels and a file size of 21.9 MB.
- The owner of this NFT will have international commercial rights to the digital image with the watermark removed via a link in the NFT’s unlockable content. No further copies of this NFT will be minted and ownership of this NFT does not allow the owner to mint NFTs containing this artwork.
- International commercial rights means you can reprint and sell the reprints and you can sell digital copies of the artwork. You CANNOT mint another NFT containing this artwork.
- Once this NFT is purchased we will no longer sell the digital image but the original artist will be permitted to sell a small amount of printed framed art in the UK only.
The description makes it clear that the buyer can profit by selling reprints of the artwork. Alternatively they can keep the artwork for their own enjoyment making it rare. The artist retains the right to sell a small amount of framed images in the UK.
Limited Edition NFTs
Limited Edition NFTs control the amount of artwork in circularisation. The lower the number – the rarer the artwork. There are many ways in which an NFT can be limited. They can be “bulk minted” at the same price or an individually numbered NFTs can be separately minted.
A good example is Kinetic Ballerina by Michael Paul Bennett. This is not only a limited edition NFT, it also gives the owner of the first edition, price protection. It also makes it clear that the artist can sell the artwork as a direct download (non NFT) until all of the NFTs are all sold. Take a look at the key terms:
- After this NFT is sold, no more than 20 copies of this artwork will be minted on any NFT platform and no digital downloads will be sold making this a rare piece of artwork.
- Issue 1 (#1) will be minted and initially sold at the lowest value which will give it the opportunity to gain the greatest increase in value.
- If an offer above 0.2 Eth is accepted for issue #1 then no further copies of this artwork will be minted and no further digital downloads will be sold.
- Download Artwork will direct all interested buyers to the digital NFTs via its website to promote the internal NFT market of this artwork.
An interesting feature of this NFT is it enables a buyer to come in at a price of 0.2 Eth. This ensures that there is only one NFT Edition of this artwork and the only way for anyone to own this artwork is to buy it from them. The buyer also benefits from “free marketing” as the artwork will be continually displayed on Download Artwork’s website.
Do I own the copyright of the artwork?
No. The copyright of the artwork will always remain with the creator. This means they can do anything with the artwork unless the NFT stipulates they won’t. It is therefore imperative that you read the description/ terms of the NFT to understand the Artist’s rights.
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Please contact us if you have any questions about our NFTs.