There are many legal problems non-fungible tokens (NFTs) solve with regard to property ownership.
There are three kinds of NFTs - those for authentication, those that function as securities, and those that are purely intellectual property. NFTs that can serve as a means of authentication and those that can function as securities provide value because they give certain economic rights.
Those that can serve as a means of authentication provide great value – they prove that the item they authenticate, like a Rolex watch or a Nike basketball shoe, are original and authentic items. When the item is sold, the NFT is sold with it. Those that function as securities provide economic benefit from owning them. For example, selling a piece of digital land or part of a digital racetrack can provide economic benefit as part of game. People who own digital land can lease it to others in the game, cultivate it, or profit from it in some way. A digital track can be licensed to games, and license fees can be distributed to the NFT owner.
But NFTs that are purely intellectual property do not pass on any economic right other than the right to sell it, hopefully at a higher price.
Ownership of intellectual property NFT usually will not include ownership of any economic rights like licensing rights or a right to use it with exclusivity. Some people may like the idea that they own the NFT (be it a video clip, a picture, or digital art). But the NFT owner usually will not own any right over it other than bragging rights. In fact, NFTs sold by the NBA, movie companies etc., may not even allow the NFT owners to display the video or pictures in their social media. The NFT owners cannot license the use of their NFT to others and cannot derive any economic benefit from it. They cannot prevent other non-NFT owners from using it.
Perhaps people just want to have bragging rights that they own a NFT video or pic even though other people can use it. Maybe people treat it like a collectible - knowing that they own an abstract piece of property. People have compared NFT ownership to owning reproductions of the Mona Lisa. The original is in Paris and if you own a reproduction, then it's not the real thing because it wasn't painted by Leonardo Da Vinci himself.
But that's not true with regard to NFTs. Since most of NFT content is digital, then the original and the reproduction are the same. If Pablo Picasso made a NFT artwork, the quality of any digital copy would be the same as the original NFT. Since they are practically the same, who cares who the owner is, unless the owner has economic rights over it? Even if you're the owner of a popular internet meme or GIF, anyone else can use it.
But an intellectual property NFT can be more than just artwork or text. They can include legal rights and obligations. NFTs aren't just tokens on a digital ledger. They are electronic documents that are digitally signed - which means that if rights and obligations are part of it, then they become a contract.
By passing on licensing rights and grants of exclusivity to use the tokenized intellectual property, you create more underlying value for the NFT which prevent it from becoming a bubble. Because the creator is actually giving actual value to the work which is capable of monetary estimation - not just a a feeling of bragging rights that you could pass on.
After all, if you purchase something, don't you want to use it for yourself and derive economic benefit from it?
