| HN Mirror

The NFT market is only providing scarcity to digital collectibles. There is no NFT market for physical assets, markets might exist but "the market" is not choosing them because of the obvious shortcomings, so therefore that's not really an argument because we aren't talking about those. The remainder of this post is referring to digital-native collectibles:

> Why would I need an appraisal of a painting I bought at an old fashioned auction? Doesn't everyone know its market price at that moment?

Because of the structure of that market, the purchasers are not seeking liquidity at the time of purchase. The available lenders are not there as soon as a purchase occurred, and are lending to the universe of fine art not just yours, so the price history is not available. Between private sales, theft, duplicates, inheritances and liquidations, the appraisals are necessary to prove provenance and price history. If you had a banking relationship with the banker right there with you at the auction, you may be able to get liquidity for your purchase very quickly in the matter of a few business days. Such "privilege" is not necessary in the NFT market, making it faster and more efficient.

> So compared to owning a physical painting, an advantage here is I can do fancy financial maneuvers with it more easily?

Royalties to the original artist are accomplished more easily. There are a lot of NFTs coded to pay X% to the original artist upon transfer and other use cases. This is a world's apart better for artists and shifts the incentives of that whole market, and so the "market of artists" is immediately choosing that because its a new century with better options. They are also people more aligned to "support living artists", so the market is forming rapidly as artists get liquid. There are also a lot of other creative people that have been doing other things with their life, that are finding it economically viable to be a creative now.

They all inherit the same financial infrastructure.

> What happens when there's a competing blockchain that also claims to represent digital ownership of this artwork?

The earlier date proves earlier original existence. Consensus can also be managed by the market and the issuer as a fallback. And then of course the courts are a further fallback. The existing art world relies on issuers to not dilute their market and trust of it (if they say its a limited edition, we have to trust that well after the artist is dead). This on-chain world provides efficiencies that don't have to be a cure all, but will function as such most of the time any way.