So the NFT defines the owner of the item... but not the provenance.

For something like the Beeple NFT, Beeple says "I am Beeple, this NFT represents this work of art." "Work of art" is a smart contract in this case: it says "whoever wins this auction at Christie's owns the legal rights specified." It might also say "and if it's sold within the next 10 years Beeple gets 10% of all proceeds" or "Ownership cannot be subdivided" or "but Beeple retains the rights to reproduce the image in question for non-commercial purposes" or "but only so long as the buyer has a virgin daughter" or "only on days that end in -y" or "so long as the moon is in Aquarius."

For something like NBA Top Shot, "work of art" is a smart contract that says "this particular video clip or image as defined on the Flow network cannot be bought or sold on the Flow network except by you and it is the only token on the Flow network that will ever represent this particular video clip or image." Think of it like land in SecondLife - it's been for sale for nearly 20 years without pissing off nearly as many people as NFTs do.

For something like a Breitling Superocean, "item" means "Superocean A2332212/B635" as recorded on the caseback.

So if someone - Banksy, let's assume - creates a new digital artwork and wants a clear line of ownership from him through each owner of the piece, a blockchain could be (assigned to it?) that would make every transaction visible and trackable.

For various degrees of "visible" and "trackable" depending on how Banksy wishes to tokenize it, yes.

So where does the NFT come in?

Remind me - did your VX800 come with a title? Ever played salvage title games? You've got this bike, it's got a serial number, the title is nowhere to be seen, you do a song and dance demonstrating that nobody else owns it, you pay for the State to dig around and see who owned it last and they try to get ahold of them, and then eventually you get a salvage title that says "this motorcycle belongs to Goobster as of January 13 2018 with an odometer that we totes can't verify."

NFTs are TITLES. That's it. They're CERTIFICATES OF AUTHENTICITY. But instead of having to play reindeer games with the state and the manufacturer, the title is indelibly on every computer running a copy of the blockchain. It's right there for anyone to look up. It can't be forged. It can't be forgotten. It can't be lost.

Can you sell a motorcyle without a title? Not legally, no. Out here in the world it might take a while to figure that out, though. Put a blockchain on it? And the minute someone scans the QR code of a stolen motorcycle the app can report the geoID of the camera that snapped it and flag it for the PD to come investigate. Could you forge a new serial number for that bike? Not without Suzuki's cooperation you can't because if you use an existing Suzuki number that was sold in Idaho and you're scanning it in Florida, it's easy enough to elevate the surveillance on that serial number. So when you go to register it to yourself the cops are already there waiting wanting to know what you're doing buying a bike with a Florida plate on it that still has valid Idaho registration.

NFTs allow total, 100% dependable title transfer and surveillance on shit that is absolutely not worth it otherwise. We don't title mopeds and scooters because who fucking cares they're tiny. NFTs allow you to title anything with a serial number. This goes for intellectual property, too - right now we've got legions of zombies filing DMCA against anything the robots flag as copyright infringement on Youtube. Want an example of how fucking pervasive this shit can be right now?

Got Spotify on your phone? Shazam? Apple Music? RIGHT NOW you could code any of those to listen to your environment, ID "music", feed that "music" through GraceNote, cross-reference your GeoID with an IP address, decide if you are in a residential or commercial environment, surveil across other providers to find out who you're streaming from, discover you're playing a John Mellencamp CD, notify Warner-Chappell, whose software looks up your business, determines you have a capacity of 40 people, assigns the correct rights violation and sends you a bill for mechanical royalties under threat of lawsuit. That's effectively what DMX/AEI/Muzak did for decades, only with people.

On the other hand, if I have an NFT saying "I wrote this song with the help of my buddy John and a bunch of licensed samples from Synphobia" the utility of a smart contract can go "every time this song is played in front of more than 50 people the rights holders are entitled to a nickel" and transfer a nickel's worth from the business' account to the contract, which gives 33% to you, 33% to your buddy John, 5% to Synphobia, 5% to Gracenote, 5% to UNICEF and 18% to your daughter's college fund because that's how you set it up. And it'll only happen once for every time that song is played because anyone else's cell phone will see that rights have already been paid because of the timestamp.

How do we know the NFT that Banksy assigned to his artwork is not just someone who set up a Banksy Twitter account and claimed that this piece was now and forever to be defined by this NFT?

Banksy says "that wasn't me" and everything done by that address is forever disavowed. Meanwhile Banksy has gone through the trouble of verifying what addresses are his and they're vouchsafed until such a time as Banksy is kidnapped by rogue art forgers at which point he does it again. Compare and contrast to what we have now:

There's a great bit in The $12m Stuffed Shark about the extraordinarily shitty records Andy Warhol kept, combined with the ridiculously prolific and shitty quality of his output. What was or was not a Warhol was largely arbitrated through secret meetings of a shadowy cabal that effectively got sued out of existence because they were basically trying to assign value through diktat and art collectors got pissed. On the other hand - every single one of Damien Hirst's insufferable spot paintings could be an iphone snap that depicts something unique about that spot painting which has its own NFT. There will never again be a spot drawing that might be a Damien Hirst.

I'm missing something here ... help me connect the dots between the blockchain and identifying the chain of custody, and why an NFT is needed if the blockchain is already evidence of the chain of custody and ownership?

NFTs, smart contracts and the blockchain allow titular custody that is impossible to forge, trivial to implement and endlessly flexible as far as rights and instructions. That's it. That's the whole enchilada. But I mean

- IMPOSSIBLE: "impossible" as in "helium is a superconductor at absolute zero" not "impedance goes down when it's cold." Impossible means IMPOSSIBLE.

- TRIVIAL: "Trivial" as in "a couple snippets of javascript in a browser can establish permanent provenance for anything with a unique identifier" not as in "why wouldn't I just get a certificate of authenticity from the Franklin Mint"

- ENDLESSLY FLEXIBLE: "Flexible" as in "if you can write it you can do it and the same thing that makes it impossible to forge makes it impossible to renege on the contract, because if the contract can't be executed perfectly IT CAN'T BE EXECUTED.

_________________________________________

Blockchain concepts actually aren't hard, we've just got this "whoa the people who went to business school are scared of it and they've never done us wrong before therefore I'm going to be an asshole about it to everyone so that I too fit in" attitude towards it. Once you've made the conceptual leap that a blockchain doesn't prevent, but prohibits forgery the rest of it becomes obvious.