What Do You Really Get from NFT Ownership?

Even if you’ve been living under a rock, you’re probably familiar with Non-Fungible Tokens. In 2021, when Christie's, the 255-year-old auction house sold Beeple’s Everydays: The First 5000 Days for a handsome amount of $69 million, NFTs and their popularity spiked. Since then NFT space has witnessed endless jaw-dropping bids and sales. For instance, Twitter’s CEO Jack Dorsey sold an NFT of his first tweet saying “just setting up my twttr” for over a whopping $2.9 million amount, the NBA had been selling NBA Top Shots, “unique” NFTs of NBA's best moments and much more.

We know what you are thinking. 

“I can just right-click and save these NFT. Why spend millions of dollars?” 

Isn't it? 

Right. Nothing stops you from right-clicking and saving an image worth millions of dollars. You can even print a picture of them and hang it in your living room. Can’t you?

So, why the hell are peeps all across the globe spending millions of dollars on an image? Why god, why?!

Here’s why. 

What are you really buying when you buy an NFT?

The answer lies in the METADATA. 

Huh? Metadata? What is it? 

Well, in literal terms, we can break down Metadata into two parts: Meta and Data. 

The word META means beyond. And DATA represents any information that is useful and can be used for a purpose. Data beyond data. 

In easy words, Metadata is data about data. 

Before you call us nuts, let us take a look at a few examples. 

When you send an email, the data email contains is the content/body i.e the specific words you wrote in the email itself. But the metadata is what describes it – the sender, recipient, the type of browser you used, and so on. 

Similarly, if you created a Google Docs, the data would be the text/images, etc you added in it. But the metadata would be the data that describes the content of the google docs such as the Title, the outline, the time at which it was created, etc. 

Simply, metadata is the additional data that is used to identify or describe a core set of data. Kind of a description. 

“I understand what an NFT and Metadata are, but what is the link between the two?” 

Remember when you were a kid and your parents used you take you to fairs. At such places, you couldn't buy food and tickets for rides directly with your money. First, you had to exchange your money for tokens. Then, with those tokens, you could buy whatever that token represented. If you had a token that said it can be exchanged for food or a ride ticket, you had a right to do so. So, what did you actually buy? The tokens or the rights attached to them? The rights. 

Okay, back to NFTs. 

When you buy an NFT, what you are actually buying is the attributes or properties assigned to a particular NFT. These properties describe everything about that NFT and are called metadata.

Does this mean Metadata is an integral part of an NFT? 

YES! This is the reason most NFT marketplaces display NFT metadata on the buying page to enable buyers to see what their purchase exactly entitles them to. 

For instance, in the case of an NFT of an event ticket, the metadata may include the date and time of the event and the type of ticket it is. If you own that NFT ticket, you have a right to attend that event. Someone may right-click and save your NFT but they cannot save the right to attend that particular event. 

In a nutshell:

• What you can right-click and save: the image of the NFT. 
• What you cannot right-click and save: The metadata that describes the properties attached to the NFT, the ownership record on the blockchain that proves that you actually own that NFT, The utility attached to the NFT, the amount that the seller receives when he sells the NFT and much more. 

But, do you really own the NFT you buy? 

No, you don’t. 

C’mon. Who are we kiddin’? We just told you that you own the rights attached to the NFT and now we are saying you don't own it. 

Look, an NFT is a digital certificate of ownership representing the purchase of a digital asset, stored on the blockchain. When you buy an NFT from the creator, you obtain ownership, meaning it becomes your property. You are given the rights attached to it but it is upon the discretion of the creator to decide what rights to render and what not. 

Think of it this way. You buy land from the landowner, but it is upon him to render you the right to build a home on it or not. To grow crops on it or not. 

Most of the NFT creators have specifically restricted all commercial use of the work but others have not. For instance, on one hand, the Kings of Leon stipulated that their NFT music was for personal consumption only, whereas, on the other, World of Women (WoW) gives the owners the right to explore the image of the NFT from that collection as they want to. One of the WoW owners Victoria Watters decided to launch a tea brand using her World of Women NFT. Pretty amazing, isn’t it?

Limited Rights 

This boils down to one thing. You don't own the NFT, rather the metadata, the properties, the rights, and the utilities attached to it. You as an NFT holder do not have any rights other than the ones granted by the creator. Since online content is so easy to copy and use, you as an NFT holder should be aware that it would be infringing the copyright if you go beyond the rights granted without the permission of the right holder i.e. the creator. And such rights can be transferred only through the terms in the smart contract. 

Final Thoughts 

You need to be clear with your ‘why’ of buying an NFT. Is it for flipping or investment? Is it for the pleasure and flex of owning a unique collectible or is it because of your favourite artist? Because unless the terms allow it, you as a buyer will have a limited ability to use it. Popularity around NFTs is growing day by day, so is the confusion and chaos around it. It is significant to know what rights you have and what would mean violating the terms of the agreement. 

And finally, if you’re new to the NFT world, check out this video to learn what NFTs are, why people buy them, some of the current news around it, and where it is headed.