Also known as NTFs or NFTies, non-fungible tokens represent a type of digital asset and its ownership is recorded on a blockchain, which is a digital ledger that was made popular by digital currencies like Bitcoin.
However, if in the case of digital currencies, tokens had a similar value and could easily be swapped for any other (they are fungible products), NFTs are unique and not interchangeable (or “non-fungible”). In fact, the best comparison with the real, tangible world is an art gallery, where each piece is unique in both aspect and value. And, just like with art pieces, NFTs are sold in an auction.
The main purpose of non-fungible tokens is to broaden the options of artists and online creators when it comes to receiving proper recognition and payment for their work. Right now, if there’s a suspicion of IP theft, you’d need the help and advice of specialists like Heer Law, who can properly represent your interests. However, in the near future, NFTs may provide a faster way to discover the creator or owner of an online creation without a shade of doubt. In short, NFTs are a way to stop the piracy of songs, texts, movies, and other similar digital creations that can easily be replicated indefinitely due to the immense popularity of the internet.
The NFT acts as a digital certificate of authenticity and allows both the rightful owner and the creator of digital art to reap the benefits of their work. For instance, the original Nyan Cat gif (considered a piece of crypto art) was sold by its creator in an online auction for 300 ETH (nearly $600,000)!
But this is not the only example of an NFT that comes to mind. For instance, the digital artist Beeple sold an NFT art collection for over $3.5 million (also in cryptocurrencies). And people are not just buying digital art and memes – they are also buying tweets (yes, posts made by someone with a Twitter account), and other forms of digital originality. Due to NFTs, collectors now have a whole new market to spend their money on!
Still, since NFTs are rather new on the market, many fear this is only a digital bubble in the making. And, while the same worries existed with Bitcoin and other cryptocurrencies, it’s also true that this is a very volatile market that can go away overnight. So, are there any ways to protect NFTs?
Is There Legal Protection for Creators & Owners?
Most specialists are a bit skeptical when it comes to NFTs. First of all, even if the technology uses blockchain to record the seller and buyer (plus other rules) it does not mean the buyer has complete ownership of the original. Therefore, in the case of the Nyan Cat, owning the original gif doesn’t mean you can prevent anyone else from using it in their online posts or even altering its original design. In addition, a transaction does not guarantee you are buying the art piece from its creator since it is difficult to establish such a thing.
Therefore, from an intellectual property perspective, an NFT is more like a receipt that proves you bought a version of something. Nothing less, nothing more. As a result, it is difficult to enforce in the real world, using the current laws. Still, this hasn’t stopped people from spending their money on NFTs. Some even seem to believe the practice will seep into the real world and that we will be able to turn real estate properties into such assets.
The only conclusion that can be drawn right now is that NFTs are quite popular at the moment. Therefore, international patent protection laws and regulations may have to change in order to accommodate a new type of authenticity certificate. But until this happens, the world of digital creations is in a bubble of its own. Only time will tell if buyers were right to spend their cryptocurrencies on gifs and tweets.