The Lies of Non-Fungibility

I’m Marc, the community manager and lead developer at Guild Artists. For years, art selling and buying has been controlled for artists, rather than by them. Our plan is to change that. We’re cooperatively building a creative portfolio and commissioned art selling platform. This means that our member artists vote to determine how the platform changes and work directly with developers to make the platform a better place.

Part of my job is to look ahead on the current art trends. I work with our artists to create a platform that allows them to run their business. I’ve worked closely with our community members to help write this article.

In this article we explain why NFTs are harmful to artists and won’t ever be incorporated into our platform. (Spoiler: It’s a lot more than the environmental impact!) We'll also be discussing how we can make selling tokenized artwork work sustainably for artists in the future; and how you can help!

What’s an NFT?

The “T” stands for “token.” This “token” is a receipt that reads something like: “I bought this!”

Think of it like the receipt you’d get after buying something at a store. The receipt is “proof” that you purchased an item.

Sometimes NFTs can be receipts for the purchase of art, merchandise or other things. But usually they don't recognize the purchase of anything: Usually they are receipts for nothing. Imagine going to the store and spending $40 just to go through the checkout register without buying anything. Later in this article we explain why this is the case.

This receipt is saved on a big list called a blockchain. Once something is added to the blockchain, it can’t ever be removed. The blockchain is public, meaning everyone can read all the receipts it stores. This way, the receipt is stored forever (theoretically).

Common Misconceptions

Imagine a future where everyone spends the majority of their time in a virtual reality world within the internet. Might seem far away, but Facebook is making it real right now.

In this virtual world, buying & collecting digital art is difficult, since anyone can copy it and “own” it just like anyone else. However, NFTs supposedly change this: they allow people to “collect” virtual art and really be the only owner. Supposedly, they allow a purchaser to certify that the artwork they purchased really belongs to them and only them.

The truth is, that’s not how NFTs work at all. To back our claim, let’s debunk a few common misconceptions.

Misconception 1: Exclusive Ownership

Some believe them to be a certificate of ownership for a unique piece of artwork. However that's not how they work, let me explain:

Hypothetically, let’s say you own an NFT of a sheep.

Trick question: Tell me, if you owned the NFT for the artwork on the right, do you also own the one to its left?

Answer: No. Even if the two images are exactly the same, they’re not necessarily the same NFT.

The two sheep are from the listings of a real marketplace seller by the name "Clone NFT". And there are 9,998 more sheep exactly like them. For a price between $30-50, anyone can own one of 10,000 identical “Clone Sheep!”

I'm oversimplifying a lot, but basically you can think of NFTs as being a very big random number. It has nothing to do with the image that it's supposedly "tied" to. It’s just a random number that a seller says is a "collectible version of some artwork." Then, that artwork is "saved" so it can be traced back to this random number.

Here’s an NFT you can buy right now of the first ever tweet:

Functionally, the one above is the same as the original which sold for millions! What makes the first one unique is only that Jack Dorsey sold it.

However, if I bought a hand-drawn piece of original art from my favorite artist and hung it on my wall, it would be very expensive and difficult for someone to forge an exact likeness of it. It would be very difficult to have it professionally certified as legit, unlike an NFT which anyone can mint!

Yes, someone could screenshot an NFT’s artwork to “steal” the artwork. Obviously, this wouldn’t “steal” the token since that isn’t part of the image. However, in a few minutes, the thief could make a new, perfectly valid NFT of this screenshotted artwork and no one could tell the difference!

NFTs are like receipts, but anyone can make a receipt for anything. The only thing that makes them valuable is who sold it and what they sold it for. On their own, they are worthless and prove nothing!

Misconception 2: Rights to an Artwork

When an NFT is purchased, it's rights are not legally transfered to the purchaser.

Unless an artist gives you license to use their artwork by written contract, the artwork does not belong to you legally. The art still belongs to the artist, even if you own a token for it. Besides using this artwork as a desktop image, you can’t do much with it; much less sell it to someone else!

This is why most NFTs are like buying a receipt for nothing. The artist isn't really selling the artwork or it's use, thus buying such a token is like paying for a virtual piece of paper that the artist can easily reprint and re-sell.

Misconception 3: NFTs Support Artists

Marketplaces like OpenSea are overrun by art theft. As we’ve explained, NFTs rely on their real-world history to have value; thus, these tokens of stolen artwork have no value, because they are not approved and sold by their original artist.

Since they are decentralized, this means that anyone with enough money can steal original artwork and create a new valid NFT of it.

There is no policing of this tech, and no way to prevent such theft due to their decentralized nature. As a customer, unless you get into contact with the original artist or you can verify the seller bought the original, you can’t ever be sure that you’re buying the original token or a fake!

Furthermore, there’s a great article by the NFT’s inventor, Anil Dash, about how they are money-making tools for the multi-million dollar art industry, not artists themselves. And this makes sense: the only valuable NFTs are the ones selling for hundreds of thousands of dollars by celebrities.

Misconception 4: Sustainability

Cryptocurrency, and the tech that relies on their infrastructure, are very bad for the environment and unsustainable. This topic has been covered extensively by experts, so we won’t go into more detail here.

What should I do as an Artist?

When you post an image of your work online, add a watermark with a link back to your website/social media. This way if your art gets stolen, or someone poses as you online, people can still find the real you. Most art thieves won’t take the time to remove watermarks from an image.

You may think it’s too little too late, but art theft will come back in another form in the near future, as it has in the past. Stolen art is still sold on t-shirts and other places. The unfortunate truth is that art theft will always stick around.

Share a “no-repost statement” on your website. In this, you should state one or more of the following:

• That NFTs of your artwork are stolen, unofficial, and valueless
• That your art may not be reposted without prior permission
• Under what condition your art can be reposted
• Where your art is legally available

Although this statement won’t deter thieves, it will let others know when your artwork is stolen and can be used to initiate DMCA takedown requests.

If your art is physical, make sure to sign it!

This goes without saying, but signatures have been around for hundreds of thousands of years. The uniqueness of your signature, still often difficult to replicate, has and will continue to certify the legitimacy of your artwork.

Signatures offer your customers something collectible, unique, non-fungible and provide a better alternative to NFTs.

Adding a signature, or sending a small personalized card with your artwork is a small gesture that adds to your customer’s experience and makes you more memorable. Often, signatures increase the value of a print or physical piece of artwork considerably. In addition, it can help return customers.

Some additional tips:

• Avoid signing business cards, as business cards are small and can often be accidentally thrown out.
• If you exclusively sell smaller goods like pins, consider sending your signature with those too.
• Unless your customer asked you not to, always sign original pieces of artwork if you can. It’s your art after all.
• For things like prints sold in-person, or when your customer might not expect a hand-drawn signature, ask them to be sure
• Consider running collector edition, hand-signed and numbered releases of prints

The Future of Digital Art Tokenization

I anticipate that several years in the future, when the technology has had time to mature, we’ll be re-evaluating a new generation of alternative technologies for use on our platform.

NFTs have shown that even with all their flaws there exists a large market for this kind of technology. Art tokenization is likely here to stay and they will continue to impact the future of the art community at large. Artists should take note of the current state of these technologies as it becomes a question not of "If" but "When should I start selling collectable versions of my digital art?"

For us, this new generation of art tokenization technology must meet the following requirements:

• It must be environmentally responsible
• It mustn’t rely on a decentralized economy (like a cryptocurrency)
• It must be defendable from theft and fraud
• It must very accurately fingerprint and identify likeness of an artwork
• It must support numbered releases
• It must be stored on a public ledger so anyone can verify the authenticity of art
• Art must always be acreditable to the original artist
• Licenses and rights of ownership must be verifiable and transferable
• It must be easy to share and display proof of ownership

If this doesn’t exist further down the road and our community decides we need it, We'll begin work with industry experts to design our own sustainable alternative to current art tokenization. No crypto involved. Certified, artist-approved digital art tokens. My dream is to make this tech sustainable, centralized, affordable, user-friendly, and safer for both artists and their customers.

If you are an artist that runs a small business, please consider joining us!

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