Custodianship, Copyright, and Provenance: on the non-monetary value of NFTs

nathaniel stern

Abstract

The value of NFTs for creators, collectors, and historians goes far beyond this speculative moment. This brief think-post posits that the custodianship of digital art which NFTs facilitate can be central to producing historically vital living archives. It then builds on other discussions around the Blockchain to differentiate, and show some of the relations between, custodianship, copyright, and provenance in the post-NFT era.

Custodianship

Back in 2004, I sold this interactive installation to the Johannesburg Art Gallery (JAG) for R30,000 – about $2,000US. That is the same amount as the Brett Kebble Art Award I had won for showing the work a few months prior, without having to hand over any rights. But the truth is that I wanted to give rights to the JAG. I wanted to very much.

As an early digital artist – not to mention one living in Africa for the better part of my early career – I’d always lost money on my work overall. I was lucky enough to – quoting Dmitri Cherniak’s interview on Proof – “find refuge in academia” for my income (I love teaching, and am currently a Professor at the University of Wisconsin-Milwaukee), but part of why I often lost money here is precisely because when I did make sales – especially to large collections or museums – I was often willing to do so at a loss, because it meant someone was taking care of that art.

NFTs (non-fungible tokens) double the potential for long-term care of an artwork.

The analogy we often hear for NFTs is that they are like a deed to a house. They are “certificates of ownership,” for digital assets. These assets can be one-of-kind or editioned, where the image or video (etc) usually lives across several outside servers (like IPFS – though some live directly on-chain), and the Blockchain verifies who owns that work. Instead of a government-backed legal document in the form of a deed, NFTs are backed by a highly secure, digital, networked, and public ledger.

Briefly – as this has been exhaustively rehearsed elsewhere – one of the more tedious debates on the Internet at present goes something like: Own a digital file? But I can copy it! I can download it! I can “right-click” and “save as” – and it’s on my hard drive! Sure, but like money, land, credit, and most things we have, ownership and value are mostly perception- and consensus-based. If enough people agree that someone owns that image (land, credit, etc), and that there is value in that ownership, then – for better or worse – it becomes true for those involved.

Interesting to me (as a writer, and a visual artist often working with text – but also with regards to the Blockchain), is that contemporary ownership almost always happens with words and code. Performative action: if I “knight thee,” you are Sir Vitalik; with the words, “I do,” Kate Stern has me for a husband (poor thing). With this legal document, that house is mine. Those stocks: in my digitally signed portfolio. That food: I’ve got an e-receipt… If a large enough number of individuals view these performative documents – including the ownership of NFT-images – as legitimate, it is. And – as the argument continues – while you may not be able to live in an NFT the way you live in a house, the former is already provably trade-able, like most forms of credit, money, or physical art.

I’d like to build on the house analogy, branching out to custodianship. As a creator, I prefer the term “custodianship” over “ownership” because it brings to the front that aforementioned thing I think should be talked about more often around digital art: care. If a house goes unsold – whether through foreclosure or market conditions, etc – it not only loses “face” value, but rarely has someone maintaining its condition. That’s dangerous to the owner – whether an individual, a builder, or a bank. A few years ago, for example, I was looking at buying a gorgeous foreclosed house in a great neighborhood near my university, but because no one was living in it and turning on the heat in Winter, the pipes had frozen and burst. I lost interest, as did everyone else. The house never sold, and it is now falling to ruin.

This happens to art as well. Paintings degrade; prints get too much sun; DVDs get scratched; uncollected, they usually wind up in a landfill. Operating systems, plugins, and software languages are similarly discontinued, leaving a lot of digital art on hard drives that go to waste in those same landfills. My first net.art work is no longer viewable because it was built in (now-dead) Adobe Flash in 1999; I have had to re-write my interactive installations from the early 2000s three times – in different programming languages – in the last 20 years to compile them properly for newer computers (and will have to do so again in the near future). The hardware for these has also had to be down-, up-, and cross-graded over the years, along with their drivers and software. Yes, there are some archival attempts at upkeep, like the Rhizome initiated oldweb.today (now run by webrecorder; Rhizome also catalogs metadata, and is working on a Flash viewer) and Cornell University’s Rose Goldsen Archive of New Media, but these also need upkeep, as well as ongoing funding and support (which I hope they continue to get!).

Digital rot is real.

Being in the JAG collection, for me, meant that they take care of upkeep, and maintenance. Someone willing to buy that house, or art work, will do their best to not let it fall to ruin. Museums all have well-maintained collection rooms at the right humidity, with the safest light, etc, for their physical work; and more and more of them also have ways to archive and update digital forms. In this way, custodianship means a given work is less likely to be lost to rot, and far more likely to become a part of history. When I sold the JAG step inside, I gave them the software, the code, the pseudocode, and the rights to not only exhibit the work, but remake it – using my everyday language pseudocode descriptions – in another programming language or digital form in some distant future. They have exhibited the work twice since their purchase, and put it in another catalog each time.

Collectors on the Blockchain, to me, represent a kind of double permanence: the art lives immutably on a public ledger, and it also has a shepherd to walk it into the future.

We are already seeing early digital artists from the first and second net.art waves mint their work (like MTAA’s Simple Net Art Diagram, remixed above), and NFT archaeologists working to restore and preserve early on-chain art that was thought lost (see Ascribe). And rather than transforming such work into prints, DVDs, or even putting them on USB sticks (like I used to), digital art can remain in its native form, and be archived as such. The cultural value of digital art, now and finally, has the capital investment towards preservation that it always deserved.

NFTs facilitate the potential for living archives of digital art.

Copyright

In 2007 and 2008, I gave a couple of interviews on two now defunct sites, which are thankfully archived and quoted on the Wikipedia page about me. Although both of these were about my work more generally at the time, I was also thinking and talking a lot about copyright (and alternatives to it, like Creative Commons), art ownership, and value – which is to say that the conversations happening now around NFTs have always been on digital (and probably all) artists’ minds.

From the Wiki:

Stern is an advocate of Creative Commons (CC), with his blog, and many of his pieces, under CC or GPL. He has been a contributing member of iCommons since its inception, and was an artist in residence with them in 2006 and 2007, the second year of which he ran the program.[Johnson] He believes that “as many people as possible need to see art and talk about it” because it “always brings… value” to “the cultural sphere”; he uses CC as a “tactic for the most effective art work, and with the recognition that this will only bring more value — both culturally and monetarily — to [his] work more generally, whether it’s for sale or not.”[MyArtSpace]

Nathaniel Stern Wikipedia page, citing interviews with Paddy Johnson (archived: 1, 2) and MyArtSpace (archived).

The day I started to write a Blockchain update to the above quote was also the day I got to listen to Trent McConaghy’s interview on Interdependence (as of this writing, the interview is only accessible on their Patreon), and I hope he’ll forgive my paraphrasing, while also plugging his forward-thinking project, Ocean Protocol (see “NFTs & IP 1: Practical Connections of ERC721 with Intellectual Property“). Ocean directly addresses the fact that:

Ownership and Copyright are not the same thing.

When I sold step inside to the JAG, I gave them the rights to exhibit it, to resell it, to display it, to use it in promotional materials in and around any of those actions, and even to remake it, as technologically necessary, at some future time. But I did not give them the right to allow others to reproduce its likeness. I still own the copyrights – quite literally, the rights to copy it. If an ad firm wanted to use an image of step inside, they would need to buy a license from me. If an extremist political party tried to use my images, I would have recourse to deal with them.

The analogy Trent used was that just because I own stock in Amazon, and get some benefits from that partial ownership, that doesn’t give me the right stalk their halls, change and use their logos, or sell my personal wares as “Amazon products.”

NFTs are assets or securities, whereas intellectual property (IP) and copyright are utilities. The former is ownership, the latter is a limited contract for a likeness.

Some NFTs do come with IP rights. Most do not. Ocean protocol actually divvies these up, selling the NFT as a non-fungible token, or a security that cannot be copied (known as an ERC-721 contract on the Blockchain), and IP rights as fungible tokens (ERC-20), meaning they are transferable, timed, and offer other rights – just like image and music licensing already work in the ad industry, and elsewhere.

In this way, it is not at all at odds to have my work under a Creative Commons (CC) license and to also sell the original images as NFTs, per my quote above (but back then, I sold physical prints, DVDs… and USB sticks).

All this being said, there are a few different kinds of CC, and artists would do well to choose wisely. Some of my work is under CC-BY (“BY” attribution), which means I need only be attributed as the originator – and so no one actually needs to purchase a license, and anyone could profit from, and even sell, that work. I more commonly use CC-NC (Non-Commercial), meaning someone wishing to make a profit from my work, whether in ads, re-sales, or the like, would still have to get licensing permission from – and more often work out a partnership with – me. At the time, I did this to facilitate other artists playing with my work, while preventing ad firms or political parties from using my images without permission or giving me a cut. With the birth of NFTs… I’m even happier I have mostly always done so. To be clear: I want my images to circulate and spread. And I also want to be compensated for my work, and to have my art collected, and cared for, with pride.

Provenance

To the second half of the above citation: the more that indviduals freely circulate any given image, the more value the original is likely to have. Thousands of posters, stickers, postcards, and more of the Mona Lisa have made the original priceless to collectors and museums – both monetarily and culturally. The same is absolutely true of digital files. The more we share and distribute, the more provenance a given NFT will have. The example of the Nyan Cat meme by Chris Torres was given as a prime example in Kayvon Tehranian’s very recently shared TED talk. Torres, its original creator, saw little revenue from this world-famous animated GIF in 2011… until its sale for more than a half million dollars a decade later. The inverse is also true: when collectors buy works by lesser known artists, the buzz gives more cultural value to their oeuvre, and to the NFT space more generally.

Monetary and cultural value feed into one another, creating stories that bind and make works everlasting, in multiple ways.

And Value

I got into NFTs relatively late – in the last few months – at least considering I’ve been a producing digital artist talking about these things for 20+ years. I’m honestly still testing the waters, and learning a lot. But my late entry is not because of some distaste for them more generally, or a disbelief in the model, or the overblown numbers around supposed energy use. (To the latter point: 1. It is questionable math and far less problematic than most naysayers argue; 2. It is less energy than spent in how we produce, store, and ship most comparable physical goods; and 3. While I worry little about 1/1s, and don’t judge others for their minting choices, I plan to do my own larger drops on proof-of-stake chains – which are 99.9% more energy efficient than their proof-of-work predecessors). It is because, in the case of crypto-currency, I’ve never had any disposable income to invest; and in the more focused case of NFTs… well, I’ve had three children in the last four years (and already two before that), so I’ve been a little busy.

When I first entered the space, I vowed to take it seriously, but was prepared to be critical. My intention was initially and only to make an interventionist piece in the vein of my previous networked performances with my collaborator Scott Kildall – Wikipedia Art (2009) and Tweets in Space (2012) – which meant participating, understanding, and empathizing as much as having a hard look at where power was focused, and how, and why, and what we might do to shed light on it. As predicted, there are a lot of people around NFTs who are there to speculate and make money; and of course some work that doesn’t sell is far superior to art that flips quickly and exponentially increases in value.

But what I mostly found was large pockets of earnest and sincere artists and collectors supporting each other, building communities, and having pride in the new creative economy they felt privileged to be a part of. I have found that many artists who got in early and made a fair amount of money tend to collect and support other artists. And I’ve seen that artists who have broken through more recently tend to do the same. Many collectors, too, want to collect more, and want as many as possible to join their club. Inspired by this, when I made my first small sale – despite (again) having lost money overall, through trial, error, and minting costs – the first thing I did was go out and buy two less expensive works from other artists. The ongoing valuation of art and artists is amazingly infectious. And the work Scott and I will wind up doing is more celebratory of participatory on-chain creativity than it is critical of anything in that space (see NFT Culture Proof).

The value we are seeing now in the NFT space – by coupling both sharing and compensation; by offering custodianship and provenance – expresses my values more than in any other space or at any other time in my artistic career.

You might ask:

1. Is it a bubble?
2. Will some (even most) people lose money as part of their investments?
3. Aren’t there still platform-based and individual gatekeepers?
4. Doesn’t this promote two economies?

Well…

1. Maybe. To some extent (like Web 1 and Web 2 were… and weren’t).
2. Probably. If you think of them as investments. (I follow Kevin Rose here, and advise people only to buy art if they would still be glad they own it were the price to go to 0 tomorrow.)
3. Of course. But many of them use Blockchain to facilitate direct involvement from their communities.
4. And sometimes. Not all NFTs are expensive, and, for example, you don’t have to be wealthy to collect comic books or baseball cards, nor do you have to collect them to enjoy Marvel movies or go see a Brewers game.

These are good and fair questions that should be asked, and then debated, and worked on.

Even so, the current value is real; the current values are real.

The creative economy is booming, and this is finally not just lip service to artists (I’m looking at you “The MFA is the new MBA.” How many MFAs did you hire that year?). I want to be part of this.

So what’s next?

That’s up to us. That’s a cliche I know, but rather than fight what is and will essentially be web3, we should all build it. And why stop with art? Might we use newer and less expensive Blockchain technologies to get rid of paywalls, and pay a nickel or a quarter to journalists every time we read their work? Music, fiction, etc. This way all kinds of creators make money, instead of Facebook and other advertisers.

People are working on this.

Could we use the ledger to both literally and figuratively invest in communities and custodianship more generally? Yes. This is in fact one of the core principles behind DAOs (Decentralized Autonomous Organizations), and some DAOs are already mind-blowingly effective.

As Holly Herndon and Mat Dryhurst (of Interdependence) often say, the Internet is already hyper-financialized. Blockchain is obviously not “the answer” to extreme capitalism and all its problems. After all, it was first conceived of for monetary transactions (of Bitcoin), and with mostly libertarian principles. But even from the most cynical, it cannot be denied that Blockchain has the potential to put some power in the hands of some creatives, and continue building from there. It gives all digital creators a greater opportunity to be compensated for their work, and be collected, cared for, and a part of history.