Copyright has nothing to do with any of this. This is an entirely new paradigm based on provable cryptography, not nebulous legal matters with jurisdictional boundaries.
I'd argue that it's important to talk about copyright. Many people I've discussed this with are under the mistaken impression that owning an NFT means they have some sort of control of distribution and use of the art they own the NFT for.
No, not all reasons. I was pretty specific about this - there is a direct connection with the artist that exists with physical art that is not reproduced with copies. Holding the strat that Hendrix played the Star Spangled Banner on at Woodstock is going to feel very different to a fan than holding a replica strat . . . even if the replica is objectively a better musical instrument (better wired, holds tune better, better paint job, better dressed frets, etc.).
Sure it's scarce, but that's not what drives the value. It's the connection that a fan feels that drives the value.
It absolutely is the scarcity that drives the monetary value of such an item. You are almost there proving my point for me. Let's take your Hendrix example. Let's say you can create an exact duplicate of the stratocaster that Hendrix used to play the Star Spangled Banner to the point where everyone that wanted one could have one. The emotional attraction and "connection" to such an item is still there for every owner of the item that wanted one. That doesn't change. But because everyone that wants one has one now, the monetary value of such an item diminishes because of the fact that everyone has their own. So I'd argue that scarcity is absolutely critical to the monetary value of artistic works and it is the combination of people's emotional value and scarcity of such works that drives the monetary value of art.
Right, scarcity plays into it obviously . . . but scarcity on it's own is useless. Every leaf in the forest is unique and therefore scarce. Nobody is willing to pay big bucks for one though, because there's no emotional connection driving the value.
So it then stands to reason that by creating authenticity of digital works of art so that you can authenticate an original work as well as providing proof of ownership of said work of art, you've now created monetary value for digital art work that wasn't possible previously.
You do not create authenticity with an NFT. A copy of digital art without an NFT is exactly as authentic as a copy of digital art with an NFT. They're identical in every measurable way. All you've really done with an NFT is shown proof of sale.
To be clear, you don't need a centralized marketplace to have an NFT. This has been my criticism of the current form of NFTs at the moment that I've been trying to explain. Colored-coins, for example, were around with bitcoin far earlier than NFT buzz and markets ever were, even though NFTs and color-coins are functionally the same. These centralized marketplaces just allow for the trading of these NFTs between marketplace participants where price discovery can take place. I can take my work of art (or any document or piece of data) and hash it and embed it into a bitcoin transaction. I now have a cryptographically provable timestamp that the work of art existed at that point in time and that I (by virtue of holding the private key behind that transaction) am the owner of it at that time. This is functionally equivalent to an NFT. The missing piece, since hashes are irreversible encryption, is displaying the digital work of art in a way that it can be hashed by others (verified) so that others can validate the authenticity of it.
I mean, in theory no. In reality though, yes . . . you absolutely need a centralized marketplace to have an NFT. Otherwise there's no real means to create, advertise, trade, or sell the NFTs. And that's the whole point of them, right? Nobody gets an NFT because they care about art. They can get the art without the NFT in the overwhelming majority of cases . . . they get an NFT because they want to make money from the art and think this sales receipt will help them do that.
At the end of the day, NFTs are supposed to benefit artists. Most artists are not going to become genius level crypto/NFT traders able to jump through a million hoops to do all of this manually. They need to be able to create, buy, and sell in a very simple way if you ever want this to catch on. Which means there needs to be a centralized marketplace in reality.
In the same way that I can digitally sign a message that proves I own a certain amount of bitcoin, someone can cryptographically prove they're an owner of a given work of art. Yes, if an NFT hasn't been created for a piece of art before, someone other than the artist can create one first. But that's beside the point. If the artist cares about NFTs, they have authority to create an NFT of their art before anyone else because they're the ones that created the art.
I feel like we're glossing over a pretty big problem here.
I can create an NFT for my own art. Then I can create another one. Then I can create a third. There's nothing at all to prevent me from doing this and selling all three. Then you can take my art and create your own NFT for it. Again, there's nothing to prevent you from doing this. Once the NFT has been recorded into the blockchain, it's immutable.
Sure, someone could do forensic digging and eventually find out that NFT1 predates NFT10000 . . . but all these NFTs are still going to exist. They're still going to be verifiable on the blockchain showing that the owner of each NFT is the owner of the art. They will therefore require massive human intervention to prove that the NFT you've got is the
real NFT. So they don't seem to offer any real verification at all.
If the actual artist themselves is saying I'm the owner of their work of art, that certainly carries value due to that scarcity.
Does it though? Touching Hendrix's strat that was used while he was playing a concert is a direct connection to the artist. If there are 1,000,000,000 identical strats and Hendrix used one at random, I buy one of the 1,000,000,000 and Hendrix sends me a sales receipt saying I bought one . . . does that really carry the same kind of connection? My guess is, maybe yes for a collector and probably no for a music fan. It's better than nothing for digital art I guess, but doesn't seem like it would ever be as desirable as the one strat that Hendrix used. Maybe this simply indicates a fundamental difference that will always exist between digital and physical art.
Scarcity is what drives the monetary value of just about all things in life. If everyone can get their hands on something, no one would care to pay money (which is really just a value representation of our time and hard work) for any such object. There are of course different forms of value. Something are "priceless", meaning that no amount of money could replace the immense emotional value of something. Somethings can hold emotional value be also be worthless monetarily speaking, if there is no scarcity behind it or if no one else holds the same emotional feelings behind the object as you do. So it is important that when we talk about the value of art and the value of NFTs, we're talking about the monetary value of art here and why scarcity is absolutely important in that discussion.
NFTs create a forced, artificial scarcity though. It remains to be seen if this is going to be valued long term for digital art. So far it doesn't seem to have caught on in a big way.