Are NFTs Securities? – Bloomberg

I like to explain crypto initial coin offerings by saying that “they’re like if the Wright Brothers sold air miles to finance inventing the airplane,” so here’s another old-timey analogy for non-fungible token offerings. Imagine that one day in the boom times of the 1920s a young animator named Walter Disney shows up at the stock market looking to raise money for his new company. “I am going to make a fortune making movies and theme parks,” he says, “and I am giving you the opportunity to invest early. I’m not selling you shares of my company, though; I’m selling something even better. Here’s a drawing of a mouse. If you give me $1 million, I will use it to build a movie studio and theme-park empire, and the mouse will feature prominently in that empire, and you will get the royalties from that mouse. Here’s a dog, and a duck, and some nephew ducks. Same deal, though the nephew ducks are cheaper.”


You could expand it. “I have drawn 101 Dalmatians,” he might go on. “They all look like, you know, Dalmatians. You can buy any one of them, and get the royalties from that Dalmatian, and use that Dalmatian in any spinoff intellectual property you want. Dalmatian 43 has diamonds on her collar; Dalmatian 81’s ears are in sort of a sassy pose; maybe those Dalmatians are worth more, I dunno, what’ll you pay me for them?”

Source: Are NFTs Securities? – Bloomberg