NFTS AREN’T AUTHORITATIVE TOKENS OF OWNERSHIP

The most persistent misleading claim about NFTs is also the one that’s closest to being true. Enthusiasts frequently claim that since NFTs are fundamentally unique and live on a trustless blockchain, this constitutes proof that you “own” a digital asset. There’s only one token like this one, and you have it in your crypto wallet, so the thing it signifies must be yours. This framing is misleading for a number of reasons. For starters, NFTs can only convey ownership (or rather, possession, but we’ll come back to that) of the token itself. As software engineer Molly White explained to WIRED, “With NFTs, the thing you've bought does not tend to give you ownership of the underlying item (image, game asset, etc.) in any way you would normally transfer physical or digital art.” Instead, NFTs typically contain links to an asset hosted elsewhere. The NFT doesn’t convey ownership of the copyright, storage, or usage rights to the asset itself. As White explained, when someone buys an NFT, “They've paid to have their wallet address etched into a database alongside a pointer to something. I wouldn't say they really ‘own’ anything at all.” Additionally, as mentioned above, the Ethereum blockchain (currently the most common blockchain for minting NFTs) doesn’t have a mechanism for distinguishing between possessing a token and owning it. If someone steals your bicycle, it’s generally understood that the bike is still yours. With an NFT, the “owner” is whoever has the token in their wallet. So, if someone’s ape NFT gets stolen via a phishing scam, the blockchain treats the thief as the new owner. Centralized marketplaces like OpenSea have occasionally stepped in to freeze sales of stolen assets (on their own platform, anyway), but this puts the power to determine “real” ownership not in the NFT itself but in the hands of the marketplaces that trade them.