Owning NFTs: What Do You Actually Own?
NFTs have sparked a lot of curiosity lately — but they have also created quite a bit of confusion. Many people like the idea of owning digital items, especially digital art, but they aren’t exactly sure what it is they own in some cases.
What exactly have they got, and how has it obtained its value? Have they acquired a piece of intellectual property when buying the NFT? Let’s find answers to all these questions below.
NFTs and IP: Do You Become an Owner of Intellectual Property After Obtaining an NFT?
NFTs, much like other innovations in the crypto space, belong to the grey area of the law in the majority of jurisdictions around the globe. Therefore, it’s safe to say that you don’t actually own the intellectual property after obtaining NFTs.
However, this may change in the future, and it’s wise to keep track of the latest legal changes in jurisdictions such as the American or European ones, as they are the most likely to develop a framework to address NFTs and intellectual property laws.
Where Is the Proof of Ownership for NFTs? Where Do They Obtain Their Value?
NFTs are built on decentralized technologies, which follow their own laws and regulations dictated by the blockchain network. Once you purchase a non-fungible token, your ownership is written in the blockchain, a database that cannot be changed in any way. This allows you to become the sole owner of a certain NFT and have proof of ownership confirmed by the decentralized network. The same principle is used for fungible tokens — also known as cryptocurrencies (Bitcoin, Ethereum Litecoin, and hundreds of others).
The value of a particular NFT is determined by the NFT creator and the supply and demand at a given moment. Let’s take a look at a practical example.
Digital Arms is a company that has branding rights for many famous firearm producers. They have “NFTized” certain digital replicas of these guns, and their aim is to connect their business to shooting games since they are already using firearms in gameplay. Each NFT firearm might have a different starting price, but the cost will ultimately depend on the number of people who want to obtain it. The more interested parties there are, the higher the price of an NFT will be.
What Are You Supposed to Do With NFTs?
At this moment, many people are confused about the utility of NFTs. Simply put — just being a proud owner with bragging rights won’t cut it for the majority of the people around the globe.
One of the ways to actually use NFTs is in games. Many of them have already turned in-game items into tokenized assets, and the Digital Arms example is proof of this. However, you can even trade NFTs actively, just like you trade Bitcoin or any other cryptocurrency.
The good news is that people are finding different ways to use NFTs, besides games and trading. One of the most popular examples is renting NFTs, which is something Bulliverse allows you to do. Namely, this multiverse project has a feature that enables you to play with, earn, and own in-game assets. However, what makes it particularly interesting is that asset owners are able to rent and lease their digital items to other players in the game and earn profit while doing so.
Final Thoughts: Re-Do This Research in One Year
The legislative landscape for cryptocurrencies, NFTs, and many other aspects of decentralized finance and technologies is rapidly evolving. Even though there are many ways to use NFTs, many things are still unclear from the legal perspective.
That’s why you should monitor the current state of NFTs in your jurisdiction and check out from time to time to see whether something has changed. If you don’t feel like it, just review the same information in a year — trust us, the things will look completely different.
