Is this the real life, is this just a fantasy? Ownership of NFTs, tokens, share certificates, title deeds.

“The first man who, having enclosed a piece of ground, bethought himself of saying “This is mine” and found people simple enough to believe him was the real founder of civil society.”

Jean-Jacques Rousseau (1754)

What is real and what is made up anyway?

As your Twitter timeline and your discussions with friends, family and colleagues attest, some people find NFT ‘holders’ naive. Why? “Because ownership in NFTs is not like ownership in land or companies, it is made up”, they’ll say. In fact, to show how naive ‘owning NFTs’ are “as soon as someone announces a particularly pricey NFT purchase, the right-click savers pounce — tweeting the copied CryptoPunk or Ape back at its proud owner.”

This line of argument allowed me to realize that some people take “title deeds” in private lands or “share certificates” in companies granted. They often overlook that humans invented those pieces of paper along with the concept of private property and companies. That is, in sum, private property is all made up.

Private Property: Fiction or Non-Fiction?

Rousseau reminds us of this ‘made up’ nature of private property in his above-mentioned quote, which goes on to state that many wars could have been avoided if people hadn’t forgotten that “the fruits of the earth belong to all and the earth to no one!”

Locke, on the other hand, claims that since we own our labor we can own things if we mix our labor with them. So, according to Locke, who was actively engaged in the debate over the colonization of America, you can own anything if you mix your labor with it. (See, Tim Harford, Fifty Things that Made the Modern Economy)

For the sake of brevity, I will not go into detail about the reality of ‘companies’, which are invented mainly to limit shareholder liability. But, if you believe that you can ‘own’ a company, buying NFTs certainly deserve your trust.

Just to be clear, I am not saying the private property is good or bad — I am simply stating the obvious: a person’s ownership of a share certificate or land is just as fictional (or real) as the person’s ownership of NFT tokens. Fiction, however, does not have to have a bad connotation. As Yuval Noah Harari, the author of Homo Sapiens, claims,

“Fiction isn’t bad. It is vital. Without commonly accepted stories about things like money, states or corporations, no complex human society can function. We can’t play football unless everyone believes in the same made-up rules, and we can’t enjoy the benefits of markets and courts without similar make-believe stories.”

That’s the fundamental difference between NFT tokens and share certificates in corporations. When it comes to Web3, not everyone believes in the same made-up rules. That’s why ownership of NFTs does not seem ‘real’ to some people: it does not conform to the rules of some of our existing institutions.

Would NFTs not exist if you don’t believe in them?

Web3, which incorporates concepts such as decentralization, in the form of distributed ledger such as blockchain technologies, and token-based economics, challenges or ignores some of the existing made-up rules in our institutions. Web3 challenges many current institutions from how we transact to how we govern, from what we accept as money to what we accept as a company. So, for our existing institutions, Web3 is a spoil-sport — and, no one likes a spoil-sport.

In his masterpiece, Homo Ludens, Johan Huizinga explains society’s different reactions to the spoil-sport as follows:

The player who trespasses against the rules or ignores them is a “spoil-sport”. The spoil-sport is not the same as the false player, the cheat; for the latter pretends to be playing the game and, on the face of it, still acknowledges the magic circle. It is curious to note how much more lenient society is to the cheat than to the spoil-sport. This is because the spoil-sport shatters the play-world itself. By withdrawing from the game he reveals the relativity and fragility of the play-world in which he had temporarily shut himself with others. He robs play of its illusion-a pregnant word which means literally “in-plai’ (from inlusio, illudere or inludere). Therefore he must be cast out, for he threatens the existence of the play-community.

NFTs reveal the relativity and fragility of the ‘real’ ownership. The omnipotence of central banks is challenged by bitcoin, the share certificates are challenged by tokens. Perhaps that’s the reason why the establishment aims to cast them out. But, does the fact that some people think you can’t really own an NFT change the ‘ownership’ of that NFT? For example, would your ownership of your house change if a bad person decides to occupy your house surreptitiously while you are away? No. The same logic applies to anyone right-clicking an NFT.

So, ownership of NFTs is just as real as the ownership of land or companies. What’s ‘real’ anyway, it’s a collection of lies we all agree upon.