79AU | 7.11-14

PROVENANCE 

Something we hear a lot in the web3 space is provenance. But what is it and why should you care? Before the days of Blockchain and ledgers, provenance was a way for artists, collectors and subject matter experts to track the history of an artwork or artifact. That tracking traditionally included information such as artist info, point of origin, sale history, etc. Unfortunately, human error is inevitable and often pieces aren’t cataloged properly; or records are purposefully altered to inflate price, hide ownership, etc. 

Today with Blockchian and NFTs, the provenance of a smart contract cannot be altered. In the case of art NFTs, provenance not only protects an artwork’s history, it protects the artist’s intellectual property and future royalties.

In the past one way to identify an artist and authenticate a piece was through the artist’s unique signature on their artwork. However, today artists can  ensure their  provenance is ironclad by always minting from the same wallet. An artist or collector’s wallet can be seen as their unique signature for web3 and a way for collectors and other artists to know that the piece minted does indeed belong to them.

INTELLECTUAL PROPERTY

When thinking about intellectual property, we envision legal battles with vulture corporations, but the truth is, software like social media platforms are a far bigger threat to creators .

In recent history, tools like Instagram have been a way for artists to share their work, but once work is posted, artists open themselves up to millions of users, making them vulnerable to imitators and copycats. 

Image theft is not just a web2 problem. ‘Lazy minting’ on platforms like OpenSea give artists the ability to sell their NFTs on demand, avoiding gas fees until the point of sale. However, until that piece is minted on chain, there is nothing stopping another creator from copying the image and minting it for themselves. 

CREATORS AND CUSTODY

So that’s intellectual property, but what about custody of an actual on-chain asset?

When choosing a minting platform, artists should always check to see if they are non-custodial. If they are custodial, the platform is effectively the middle-man for all transactions. It  holds on to the art and any proceeds from sales and these things are only released after a certain amount of time, which is decided by the platform. Furthermore if a platform runs into financial difficulty there is no guarantee that either NFTs or funds that are custodied with that platform will be returned to their rightful owner.

However, a non-custodial platform like Mint Gold Dust will never hold artwork or funds. A non-custodial platform can be seen as a window to the blockchain, rather than a broker. 

COLLECTORS AND PATRONAGE

The web3 ecosystem doesn’t start and end with artists; collectors are also an essential piece of the ecosystem. Taking a look back at the traditional art world, a collector couldn’t just walk into a blue chip gallery and buy a painting. If they were not invited to the gallery to purchase a piece or a part of the gallery’s collector list, it was almost always out of reach. Now, patronage lies in the hands of the collector, not a gatekeeper.

There is a lot of talk about the flipping economy in web3, but the NFT market is much larger than that and there are more incentives to buy than just short term ROI. Just like in the traditional art world, we see collectors buying pieces that they have an emotional connection with from artists they want to support. They are not buying to flip but are buying because of true appreciation of the art. And because of verified provenance, tracked through the Blockchain, collectors can verify prior owners and that the piece is authentic. 

With new display options, collectors can hang their NFT artwork in their homes like they would a painting. These frames connect with your wallet to showcase the actual file attached to the token, not just a jpeg saved from your computer. 

SECONDARY MARKET

It is important to consider the secondary market when discussing collecting. Just as there are best practices with minting NFT art, there are best practices for selling. An attractive element of NFTs for artists is the promise of royalties which can flow to the artist every time the piece is resold. However, if a piece is resold on a platform the artist did not originally sell on, there is no guarantee that these royalties will follow. This cross platform dilemma is an industry wide issue that many people are looking to solve. In the meantime, there are ways that a collector can ensure that the artist receives their proper royalties on the secondary market. The easiest way to do this is to resell on the same platform that the piece was minted on. When a collector buys a piece from an artist, they are welcomed into their community. It’s up to collectors to foster that relationship and be good stewards of the artwork they collect.