Some debate that they can just copy paste a picture of a NFT instead of over paying for it.
Key difference between buying a NFT compared to copying its media file is that the NFT is connected to the blockchain from a verifiable creator making it non-fungible and can be treated as a collection or used as a utility.
Here is another way to look at it, if I go now take a picture of the Mona Lisa and professionally print it, I will not be able to sell it for $US 850 million. Because it has not been verified that it is the original.
Let us look into the details of why NFT is not vulnerable to be copied and pasted.
It is an Ownership Verified by its Creator
The first reason is because it is recorded on the blockchain which are immutable transactions. It means that no one can alter the information and creators can verify that these items of the collection are made by them.
In fact, it is much easier to identify an original digital asset in compared to physical asset.
When it comes to clothing for example, let us say a counterfeit clothing company is making Emporio Armani T-shirts replica. It is harder for a non-fashion savvy person to identify the original from the fake. But when it comes to NFTs, all you have to do is go to the creator website and check the link for their collections.
Holding the NFT does not give you the copyright ownership of the picture but give you ownership of the collection from the collector. It is similar to when buying a trading card game collection, you do not own Blue Eyes White Dragon from Yugioh but you do own the original “usable” card.
There are situation where creator decides and allows users to actually own the collection and some gives franchising opportunities..etc
It can be a Collectible
OK, let us just have one step back and the identify what is a collectible item. As defined in Investopedia:
A collectible refers to an item worth far more than it was initially sold for because of its rarity and/or popularity.
Items in the NFT space today are on their early stages will definitely cost much more than it should be in the future.
Reason behind that is that most collections are actually launching their first editions and if you are a collector you know that first editions hold high value.
But why people collect?
As a human nature, people who have excess money would like to diversify their source of income into different type of assets. One of them is the collectibles items which can be used as a store of value and also as a symbol of status. Collectibles are one type of items that are called Veblen goods which their purchasing demand increase as the price increase (yes it doesn’t feel natural).
Here is a video from Andrei Jikh which I enjoyed watching regarding this topic.
It can Gives Access / Utility
When you buy a NFT you don’t just buy the media file but you also buy the meta data associated with it (it is the unique code that comes with every NFT along with its description).
This means that whoever creates the NFT (or anyone who knows the contract address) can give utility for the NFT you are holding.
For example, Merry Modz is Christmas based collection the founder Tom Bilyeu has provided giveaways for project holders on Christmas. The giveaway was conducted by making a raffle based on token ID of the NFTs. Benefit of that, it was efficient and all holders had opportunity to participate and it is also verified making sure no one managed to insert an extra raffle ticket around.
If you go into a raffle in real life, you will have to have a ticket with unique serial number. And in fact we can assume that in real life there is a possibility of cheating if someone counterfeited the raffle ticket unlike NFTs which everything is recorded on the blockchain.
It can be Part of a Brand
We have to keep in mind that this space is still new and brands are being developed. One of the leading NFTs in this space is Bored Ape Yacht Club (BAYC).
BAYC holders includes Jimmy Fallon, Paris Hilton, DJ Khaled and much more. here is a link of an article discussing this project if you like to know more.
Just think of it as a clothing brand, some businesses are starting to make brands that are not well-known and it takes time to build brand equity. so is the projects in the NFT space.
With such an early stage in the industry, mixed with scams and utilities are still being built, I understand how some people feel that copying and pasting is relevant.
But again, lets over simplify it, if McDonalds made a NFT coupon for a worldwide lifetime discount. I am sure, it will be valuable and copying the coupon picture will have no impact at all.
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