What the Noun?
Nouns are 32x32 pixel avatars based on random things (animals, foods, objects, plants, empty space, etc.) with square glasses. Regardless of whether you find these block pixelated characters cute, childish, ugly, you most likely have heard about these Nouns if you are playing in the NFT space. They are currently auctioning daily for around 100 ETH.
100 ETH. Maybe that number doesn’t phase us anymore in terms of prices for jpegs as we have been slightly desensitized by the reports of the 100s (or even 1000s) of ETH spent on pixelated punks and monkeys. But at least those punks and monkeys have a limited supply. Limited supply + high demand = high price. Economics 101 baby.
But, unlike some of these other “expensive” PFP projects that everyone is aware of, these pixelated avatars with square glasses have an expanding supply (per the website, “One Noun is trustlessly auctioned every 24 hours”). Huh?
What is also interesting is that these square glass pixelated avatars do not have any copyright protection; they are in the public domain (i.e., anyone can use these avatars for whatever purposes they so please).
So what gives? Have NFT collectors really truly gone insane?
Enter the age of CC0 projects.
What duh heck are CC0s?
CC0s are deeds that artists and creators apply to works to signify that that the creator has dedicated his or her work to the public domain, thereby waiving all rights afforded by normal copyright. Therefore,
anyone can copy, modify, distribute and perform the work even for commercial purposes, without asking for permission and without needing to give the original owner any credit or attribution.
And when an artist signifies the art work as a CC0, this is a one-way street, he or she cannot undo this and then reinstate the rights afforded by the copyright.
Why would anyone give up the protection of copyrights?
Brief primer on Copyrights
To answer the previous question, we first need to understand a little bit about copyright and how it came to be.
At its core, copyrights are intellectual property that protect original works of authorship for various forms of work including paintings, photographs, illustrations, musical compositions, sound recordings, computer programs, books, poems, amongst others.
These rights stem all the way back to the U.S. Constitution in Article 1, Section 8, Clause 8 which granted Congress the enumerated power “to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” To promote the progress of science and useful arts — those are the key words. Underpinning these key words is the belief in the economic theory of copyrights.
Economic Theory of Copyright
Works of authorship have properties of “public goods” because they are “non-rival” in that the consumption of the good (e.g., looking at a painting) does not reduce the supply of that work. As with all “public goods,” our Founding Fathers were probably concerned that there would be free riders, or users who want use the goods but not pay for it themselves. Back to Econ 101, markets often have difficulties producing public goods because of this dynamic (e.g., roads, highways, fire departments, etc.). Because of this, governments then need to step in to solve for public goods by directly subsidizing the production of these goods.
Copyrights then represent indirect subsidies afforded by governments for producers of arts and sciences. Copyrights give creators the exclusive rights to use the works they create, allowing them to force consumers to pay for the marginal cost for production (e.g., consumer paying for a print of a photo) and creating the structure or mechanism for others who want to use the copyright (e.g., film production companies paying an author to create a movie on a book).
In short, the thought was that without copyrights, authors and creators would not want to create because anyone could copy their work, thereby leaving the original creator with no way to monetize his or her works.
NFTs create a new paradigm.
Enter non-fungible tokens (NFTs). NFTs are a digital asset (unique cryptographic token) that exists on the blockchain and cannot be replicated. They can represent real-world assets (e.g., art, music, etc.) as well as digitally native objects (e.g., digital artwork, in-game assets, etc.). When NFTs are minted, they become permanent aspects of the blockchain that is immutable and can be seen by all. NFTs can contain any quantity of data like text, image, sound, or video file but most at least consist of a number (identifies the NFT), address (identifies the owner), and URL (identifies the file associated with the NFT). The number and the URL cannot be changed but the address can be if ownership of a NFT is transferred (i.e., through buying / selling/ trading / minting).
One of the concerns of living in a world without copyrights is not knowing who the owner is. NFTs fundamentally change this paradigm.
Forget the copyrights. Bring on the CC0s.
CC0 NFTs are then NFTs that are entirely in the public domain. Anyone, for example, can take a Noun and put it on a handbag and sell it. Then why did Budweiser, a traditional web2 brand, decide to purchase a Noun?
They recognized the distinctiveness of the NFT itself and put the NFT in a Superbowl commercial. But, they could have done so without purchasing the Noun.
What they wanted by purchasing this specific Noun was ownership. And while I have not talked specifically with Budweiser marketing executives, I believe their logic for putting Nouns in a Superbowl commercial was to associate its brand with these quirky NFTs. For the Nouns community, they received the benefit that their NFT was shown to roughly 106 million viewers. Surely, that type of exposure (and the reason why companies pay large quantities of money for Superbowl ads) will drive interest and demand and thereby increase the value of the underlying asset being promoted. The creators Nouns profit then given that they hold a good portion of the outstanding minted NFTs and they receive royalties from secondary sales.
CCO NFTs thus can allow authors to profit from creating works of authorship without having to control their use. Without copyright protection, subsequent creators are free to do whatever they want with the original NFT (e.g., put it in a commercial like Budweiser did, put it in a movie, create merchandising for it, etc.) and all subsequent uses of the CC0 NFT drives attention back to the original. CC0 allows for the meme-ability (“seize the meme”) or virality of the underlying asset given the no restrictions applied for future derivatives. More derivatives drive more attention. And “money follows attention.”
Creators of successful CC0 NFTs essentially are relinquishing their monopoly over the original piece in exchange for the potential and promise of a decentralized community that rifts and builds on the original NFT, all while driving attention back to the original and bringing clout back to creator of original piece (which is known based on the immutable record in the blockchain mentioned above).
Moreover, creators of NFT CC0s will be able to leverage this credibility and clout brought on by popularized CC0 NFTs to mint future new works that are at a cultural currency and fiscal premium to the rest of the market.
Does this mean everything needs to be CC0?
A simple paradigm that might be helpful to think about the CC0s is an analogy to centralized and decentralized entities.
Pros
- Centralized entities: speed
- Decentralized entities: democratization and flexibility
Cons
- Centralized entities: flexibility
- Decentralized entities: can be slow
In business, it often makes sense to have a centralized entity especially when you have
1. an influential leader (e.g., Steve Jobs) leading the helm who has a clear vision on where he wants the company to go and
2. the employees are bought into that vision and willing to follow
However, we are also seeing the rise of decentralized autonomous organizations (DAOs) in web3 that serve as an alternative to the traditional web2 centralized entities. DAOs may not be able to move as fast but expand the surface area in which individuals are able to contribute to the DAO (i.e., members can choose to contribute in ways that work best for their schedule in areas that interest them the most and are most suitable given their skillset), thereby potentially maximizing the leverage the organization is able to obtain from its contributors (more about DAOs here). In the early 2000s, Linux’s ability to come in and disrupt Microsoft’s monopoly over the operating system (i.e., they controlled the operating system, the browser, and the connection to the web) was due to the fact that Linux’s founder, Linus Torvalds, focused on a public domain licensing model (code created, maintained and updated by the community). Microsoft’s 90%+ market share was eventually eroded by strength of the development community of Linux. Closed systems may be better for bootstrapping ideas but hyperscale, or scale that can compound on itself, requires a strong community. Think about how we no longer hear about Encyclopedia Britannica while Wikipedia probably has a page on every topic you might want to learn about…
Parallels from the business world can perhaps be drawn to the fields of “science and useful arts” in terms of centralization and decentralization. One could argue that the original creator is the best individual to drive the future and success of book, art, etc. Would one argue that the Star Wars series have existed without George Lucas’s imagination and conception of this world? Definitely not. But would we have had episodes I-III, the movies that are thought of as the least laudable of the series, had the community been empowered to shape the direction of the franchise post the boot-strapping of the Star Wars idea by George Lucas? Perhaps not.
Let the Experimentations Begin
I understand that CC0s are not a cure-all for the promotion of sciences and useful arts that our Founding Fathers originally set out to achieve.
For one thing, CC0s work when consumers can attribute new projects back to the original. Therefore, in today’s world with current technologies, it may not make sense for all forms of media to be CC0. CC0 works well in visual NFTs because the image itself makes it obvious on the attribution. Therefore, all value can flow back to the originals rather “easily” because it is more obvious who the original creator is. Attribution, however, is not as easy in music NFTs as it is in visual — humans tend not to be as discerning in hearing as sight. For example, if you sample or remix someone’s CC0 work, it may not be obvious who the work was from originally. Moreover, when do you remix something enough such that it is fundamentally different from the original? For music, the attribution to the original music needs to be more obvious in music NFTs for musicians to want to give away their IP.
For another thing, artists may want to retain the ability to choose what they do with their work. As Tyler Hobbs states here, “not every artist wants to deal with the possibility of Nestle putting their work on the label of a water bottle. The artist should be free to disallow that.”
I understand Hobbs’ point here (and I think Nestle is rather a tame example — imagine if Amazon or Al-Qaeda decided to adopt a CC0 artwork as their new logo, the creator would surely not be happy I presume). But works like Aladdin, King Arthur, Peter Pan, Dracula have been in the public domain and I haven’t yet seen these adopted by nefarious actors.
Despite Tyler’s valid reaction to works without copyrights, what makes me excited about CC0s is that we have the power of web3 behind this movement. The power of Web3 is it allows us to use blockchain technology to create solutions that are not rooted in the same mechanisms and thought processes of web2.
Stated differently, we no longer need to live in a skeumorphic era where design and solution thinking needs to be adapted from prior generations but slightly upgraded in terms of speed, ease of use, and utility. This is something we have already seen from Nouns and their innovative drop mechanism.
Web3 can be used to power the growth of CC0s while still driving value for the creators. Perhaps this is why XCOPY, one of the leading NFT artists, recently stated that he is going to apply CC0 to all his existing art. And now Moonbirds and Oddities.
Over at C0C0, we are excited by everything that is happening with CC0s and want to help support the experimentation happening in this arena. Therefore, as a DAO, we are focused on supporting and growing the CC0 ecosystem by:
- Investing in and collecting CC0 projects, and their extensions
- Supporting the creation of new CC0 projects by DAO members and others
- Being a supportive voice in governance in CC0 projects
- Assisting with the creation, promotion, and recognition of CC0 projects that seem promising, novel, or unique
You can learn more about C0C0 here.
Let the summer of CC0s begin.
