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Comment by habosa | Hacker News Reader

NFTs are dumb however some of the NFT markets have one cool thing that I hope sticks around: the artist gets a cut of all future sales.

If you sell your NFT art for $10 and then someone resells it for $1M, you will get some percentage of the $1M.

We've all heard the stories of "collector buys 10 Jackson Pollock's for $10 in the 70s, sells the collection for $100M today". Wouldn't it be nice if the artist could benefit from that belated appreciation?

Like most other things on the blockchain you don't really need the blockchain to do this, however this is one case where it's actually much simpler to implement the concept using a blockchain and smart contracts rather than any traditional method I'm aware of.

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We've all heard the stories of "collector buys 10 Jackson Pollock's for $10 in the 70s, sells the collection for $100M today".

Sure, but to be fair, only the smallest fraction of artists would have that happen - and most often, it happens well after the artist is dead. In general, an artist is lucky if they sell art for cheap prices, and even luckier if they sell at a decent price.

And with this, it would generally look more like, "artist sells NFT for $75, and two years later got a $8 payout from a resell." Not to mention that you won't get anything for folks gifting the NFT nor any other non-monetary trades.

And back to the "long after they are dead" detail: Who, exactly, gets the money? I mean, by all means, give the money to any immediate family - sibling, parent, spouse, children - or anyone else that would get inheritance from me. But after that, wouldn't it just all go to the owner much like it does now?

I'm a bit torn about this. For example it is generally believed that say SONY should not get a cut if I resell a CD I've bought. Why should this be different for paintings?

1. If it is known from the start that this is how it works, you can just avoid those CDs.

2. CDs are copies, NFTs are sort of originals, so it's pretty different.

I think that the proper reason why CDs and NFTs are different is that NFTs are non-fungible. You can distinguish an early minted NFT by the wallet of the author of, say, an artwork and a late minted NFT with the same value made by someone else.

Yes, that's the second bullet above.

> NFTs are sort of originals

There is no such thing as an original digital media asset. The digital media attached to an NFT is by definition a copy.

I tend to agree. There is nothing preventing an artist to sell two NFTs for the same media. Then you would have two competing "originals". Can't do that with a physical object. However it is also progressively harder to prove that a physical thing is actually an original.

If an artist makes prints another dozen of a printed physical work, asks the factory that made a sculpture to produce another one, ... you would have competing originals too (indeed replacing damaged/destroyed prints sometimes happens, the newly printed taking the place of the destroyed one - otherwise it is considered bad taste for an artist to actually do that). Or an installation piece that everyone could copy by following the setup instructions, but is just "original" if the installer has the artists permission to do so. Or an art film that's sold as a single DVD: surely the physical DVD is not the art piece, but the film is, even though the film on DVD is clearly a copy of a file on the artists computer. Sometimes in art it really comes down to whatever the artist declares to be an original work. (With an NFT you even get a clear order which one was first if you are worried about repeated minting)

Not that I'm a big fan of NFTs or anything, but they really are not that different from what already happens in art.

(There's also NFTs that are images generated by code that takes where in the blockchain it was added into account - that image has not existed before the NFT was minted)

I said "sort of". The point is that NFTs shouldn't be compared to CD copies, they are more similar to something like the musicians original handwritten music scores in that there's only one of it (and it doesn't confer any licence rights to the buyer).

Yep. People already complain about not actually owning their software products. And now suddenly this is a good thing?

How can you be sure that will happen? If the artist is relatively poor and the artwork/NFT ends up being a marker in some sort of huge money transactions, what recourse do they have to enforce this cut on future transactions?

In the event of huge transactions going on, how plausible is it that the people selecting properties to inflate in this way will choose properties that are encumbered by such an obligation?

I think 'artist gets a cut' is certainly a cool concept, but I think it's purely hypothetical. It will not work out that way in the real world. There will be a mysterious lack of revenue stream to 'artists', even if the scale of speculation continues as it has.

Reason being, this type of speculation is not really about art.

This is actually a thing in the EU (and the UK), because of the Artists’ Resale Right Directive. However, it has very little influence on the livelihood of artists, because the economic value of most art works peaks when they are first sold. So the people who benefit from the resale right are a tiny minority who didn’t really need it in the first place.

It’s not dissimilar to copyright, where almost no estate gets to profit economically from copyright decades after the author’s death. Basically you get rules made for the appealing exceptions rather than the norm.

The traditional method is to just write that stipulation into a normal legal contract. That's already the payment model for some types of art, most notably actors getting a forever cut of backend profit on films. This tends to lead to some creative accounting whereby profit is impossible, but it's still in the contract already. No need for the contract to be on a blockchain. Nothing was stopping Jackson Pollack from writing a stipulation into the sales contracts for this painting that he gets a cut of all future resales.

The only possible advantage of a blockchain here is if you don't trust the law, since the technology itself enforces a smart contract and doesn't rely upon recourse to a legal system. The downside is you have no recourse to a legal system, so if some owner of a digital good sells it off-chain (you give me cash, I give you possession of the wallet), there isn't much you can do.

Interestingly the artist retains copyright - the buyer gets the physical goods. Much like DVDs

So pollock (or his estate or whatever) owns the copyright to the sold painting and so gets paid when you buy a postcard etc.

This is exactly zero change from regular artwork. If I sell a piece of art, the copyright is still mine. You can sign it away, of course, but otherwise they have to get permission to do anything with the image other than display and store it (and the stuff that goes along with this).

Yes, that's what I hoped i was saying :-)

- what surprised me is that if someone pays 100M for a painting of sunflowers they are just getting pasteboard and oils - if they want to publish a picture of their purchase they get to pay again !

Just did not expect that

If NFT resales take off, resales will just happen off chain via contracts. $1Million wire transfer and a concurrent $10 NFT sale. This has the added benefit of some legal enforcement.

"If you sell your NFT art for $10 and then someone resells it for $1M, you will get some percentage of the $1M."

Is this actually a feature of NFTs?

At least on hicetnunc (art focus) it is. You can set your royalties to 10-25 percent of future sales.

If you set your royalty to 25%, meaning that a million dollar sale will have to burn off $250k to you, that million dollar sale will NEVER EVER EVER happen.

Think of it like a processing fee making the platform completely unworkable. Nobody will ever deal with that kind of inefficiency unless they are doing something so desperately illegal that they'd willingly pay that much for the money laundering.

And there's bound to be more efficient ways to money launder. Nope. The artist royalty promise is a pure con.

On most platforms, yes, and its part of the appeal.

The royalties currently only happen if they sell on the same platform.

A peer to peer nft object transaction does not support royalties, currently

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