In the last year, NFTs have become the flavor of the month, not only in Nakamoto’s happy kingdom, but rapidly spreading wherever people are trying to make money on the Internet. Which is everywhere, all the time, no?
The “big idea”of NFT’s is they are cryptographically signed certificates of authentication. More important, with executable contracts on a blockchain, they can be copy resistant, and tradable. Thus, the technology assures that you can “own” the digital token, and can buy, sell, and trade tokens.
Blockchain-based services make it really easy for anyone to generate NFTs, and to put them up for sale. So, basically, the Internet is now host to a giant, world wide, “sale of work”.
All of this means that you can do anything with an NFT that you could do with a “certificate of authenticity”. So—collectables.
Some NFT’s are linked to digital “assets”, such as images, videos, animations, or interesting packages. Others are linked to analog “assets”, such as (physical) art works, designer fashions, or even real estate. Some of these NFTs may be linked to real world ownership, but many of them are essentially trading cards, representing affinity, not ownership.
So, what are you buying when you buy an NFT?
Well, you are buying a digital object that contains some kind of claim to be connected with something. You can be sure that the claim cannot be erased or changed. But is the claim itself valid?
Ah, there’s the rub.
The fact is, an NFT is exactly as authentic as whoever created it. Given that NFTs are created by “some guy on the Internet”, there’s gonna be problems.
As Sam Ewen puts it, “the NFT boom is an orgy of intellectual property infractions”. [1] Say it ain’t so!
Basically, NFT markets are pretty much unregulated. Notably, services such as Opensea profit mightily from user generated content, but do not police IP or much of anything.
“In fact, none of the 682,569 items listed when searching Squid Game on OpenSea have any relationship with the intellectual property (IP) holder as it has not licensed anyone to use the trademark for a digital blockchain asset.”
(From [1])
Of course, there is always murkiness about fair use and the bounds of infringement can be hazy. But a lot of NFTs are almost certainly infringing IP in ways that have little if any artistic merit and a lot of commercial exploitation.
This is, as Ewen says, a recapitulation of earlier Internet history. And, as in the case of music and videos, it is pretty clear that NFTs will be policed by IP lawyers and take down orders.
I’ll note that this will be a big issue in formerly-Facebook’s “metaverse”. What exactly will the rules be? How will formerly-Facebook police their world? How will they walk the tightrope of encouraging creators to contribute and protecting creators from exploitation? We’ll have to see.
One thing that is different with NFTs compared to earlier Internet technologies is that the blockchain technology assures that unauthorized copies and uses can be traced to the buyer, not just the creator and distributor. So, the lawyers can and surely will come and take away your illegal NFTs.
“it is not only the creators who may pay the price but the collectors as well.”
(from [1])
So, basically, you need to make sure that before you buy and NFT, you know that the seller has the right to sell it to you. And it it seems too good to be true, well, you know. Don’t buy it.
- Sam Ewen (2022) The Balance Between Art and IP Theft in NFT Culture. Coindesk, https://www.coindesk.com/layer2/2022/01/19/the-balance-between-art-and-ip-theft-in-nft-culture/
Cryptocurrency Thursday
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