It’s probably a little late to write this post. NFT’s moment in the sun has come and gone, and that’s probably for the best. But I have strong feelings on this topic, and now I have a blog ;)

This will (hopefully) be a short post. I will argue that, once we attend carefully to what ownership and scarcity actually involve, NFTs don’t create either. At best, they give us a somewhat cumbersome mechanism to track ownership and perhaps an inconvenient for small groups of people who care about them to communicate ownership.

Very briefly:

  • A blockchain is simply a way to keep digital records. Think of it like a very slow database. It has a few special properties. It’s append-only: you can add to it, but you can’t delete or change existing data. It’s distributed: it’s stored on lots of computers and the official version is whatever a sufficient majority of those computers agree on. That means it’s safe from unilateral changes by any user without requiring a central authority to keep track of the official version. Cryptocurrency happens to be the major use that blockchains have been put to, but it’s not part of the definition.
  • A Non Fungible Token (NFT) is simply a chunk of digital information stored on a blockchain. It isn’t non-fungible in the sense that it can’t be precisely duplicated or copied—it easily can—but in the sense that the blockchain uniquely associates it with one particular user. It can be transferred from one user to another, but it can never be associated with multiple users at once.

In the early 2020s there was a lot of excitement around the ideas that NFTs provide “digital scarcity” or “digital ownership” and that this will somehow revolutionize the way we interact with the internet. Perhaps particularly the way digital artists sell and profit from their works.

I believe this is all fundamentally misguided on a basic, philosophical level. To see why, let’s unpack the notion of ownership. We’ll ask three questions:

  1. What does ownership involve?
  2. How does one come to own something?
  3. When is it useful to own something?