Non-Fungible Tokens: Justin Daniels of Baker Donelson On The 5 Things You Need To Know To Create a Highly Successful Career In The NFT Industry

Develop a network of people you can share ideas with. I have security, business and technology professionals I call on to help explain all matters of concepts to me. There are no bad questions!

Many have observed that we are at the cusp of an NFT boom. The thing is, it’s so cutting edge, that many people don’t know what it is. What exactly is an NFT and how can one create a lucrative career out of selling them? To address this, as a part of our interview series called “5 Things You Need To Know To Create a Highly Successful Career In The NFT Industry”, we had the pleasure of interviewing Justin Daniels.

Justin Daniels is a shareholder in the Atlanta office of law firm Baker Donelson and provides strategic advice to clients regarding blockchain technology. Justin represents one of the largest cryptocurrency mining facilities in the country and has helped clients create and iterate business models that address regulations including federal and state money transmitter laws as well as whether tokens are considered securities. Justin has extensive and significant experience handling the power contracts and related critical infrastructure necessary to profitably engage in cryptocurrency mining.

Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit. Can you tell us a bit about your backstory and how you grew up?

I grew up in Pittsburgh, Pennsylvania. I attended law and MBA school at night while I worked full-time. Legal jobs were tough in Pittsburgh in the late 90’s so I visited Atlanta just to network and I was offered a job within 48 hours. My work in blockchain is nothing I learned in law school. Instead in 2017, my longtime client decided to turn his data center into a crypto mining facility. I learned blockchain taking an online MIT course and other self-directed learning plus on the job training!

Is there a particular book, film, or podcast that made a significant impact on you? Can you share a story or explain why it resonated with you so much?

Never Split the Difference: Chris Voss. I thought I understood how to negotiate contracts with 20 plus experience…. then I read Chris’ book. He completely transformed my approach to contract negotiation. Case in point, I had a ransomware event where the demand was $500,000 and the client told me they could not pay more than $100,000. The ransom negotiator told me it would be almost impossible to settle for less than $200k or $300k. Using a book technique, I was able to educate the threat actor over email that this company did not have the money backed up by bad press and ended up settling for far less than $100,000. The lesson applied was do not assume the other party accurately understands your financial position which in a ransomware case is everything.

Is there a particular story that inspired you to pursue a career in this new industry? We’d love to hear it.

My longtime friend and client made his data center into a mining facility. I simply jumped in to learn all I could. I am naturally curious and relish an intellectual challenge. Blockchain checked both boxes and still does!

Can you share the most interesting story that happened to you since you began this fascinating career?

The key to successful crypto mining is the power contact. I was able to identify a unique interpretation of state law that allowed a client to build 40M facility based on my interpretation because they could pick their own power provider.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

I misspelled a client name on an engagement letter. While just a typo, because it was a client’s name it caused them to wonder what other typos I made. Lesson learned is always spell the client’s name right!

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

I have a great mentor. He has helped me successfully navigate dealing with challenging situations and people that require finesse. A mentor whom you are willing to be honest and trust their opinion is key to your development especially as you practice longer. One story I remember was I had a disagreement with another partner at my firm about a big conference we worked on jointly. Even though I thought was right, my mentor persuaded me that being right did not matter and I should try and see their position. Although he did not seem to appreciate my olive branch it was the right thing to do.

Are you working on any exciting new projects now? How do you think that will help people?

The projects I work on that can help people are the work I do for a smart city. Smart city is dedicated to allowing companies to test drones, autonomous vehicles and other smart city technology. As technology counsel, I help identify and balance innovation vs. privacy and security. This is especially important with technology like drones, autonomous vehicles and cameras. If privacy and security are afterthoughts, AV and drone technology will lead us as a country towards a surveillance state under the pretense of public safety. I like being on the vanguard of ensuring that privacy and security are balanced against innovation.

I’m sure you get this question all the time. But for the benefit of our readers, can you explain in your own words what an NFT is, and why people are spending so much money on them?

An NFT is unique digital code evidencing ownership of an underlying asset recorded on a blockchain. The best real world NFT example would be: NFT = deed to your house evidencing your ownership; your physical house = underlying asset and the blockchain = the real estate records.

The NFT industry seems so exciting right now. What are the 3 things in particular that most excite you about the industry? If you can, please share a story or example for each.

Using a blockchain to prove identity without needing detailed information. Consider using an NFT as to evidence to show you are 21 and can enter a bar as opposed to your driver’s license.

Using a blockchain to improve AML/KYC. Consider using a blockchain with decentralized data to verify your identity for AML and KYC without banks holding so much personal information about you.

Blockchain being used to bank the underserved. I knew blockchain had value when I met someone from Venezuela who could only get their assets out of the country using Bitcoin. Many people have financial systems they cannot trust or are corrupt.

What are the 3 things that concern you about the industry? Can you explain? What can be done to address those concerns?

Security, Security and Security. The industry uses consensus and other trustless mechanisms to replace trust. The irony is that without good cyber security people simply will not trust the entire system. The Axie Infinity hack, in my opinion was telling. The company was so focused on growth and getting to the market quickly and security was an afterthought. The consequences inevitable.

What are the “myths” that you would like to dispel about NFTs? Can you explain what you mean?

Code is not law. Too many people do not understand that an NFT has very basic parameters and does not deal in any meaningful way with intellectual property rights. Most sites make it clear in their boiler plate if you read it that its buyer beware!

Smart Contracts are not very smart! It is just digital code that take an action or not based on conditions being met. If a French buyer buys an NFT from a German resident on an U.S. exchange, if expectations are not met whose law applies? A smart contract does not address it nor does the exchange terms and conditions!

What are the most common mistakes you have seen people make when they enter the NFT industry? What can be done to avoid that?

People do not understand what intellectual property (IP) rights they are purchasing. Right now, it is tough unless the IP owner also runs the exchange like NBA Top Shots. There you can have a direct contract relationship because the IP owner also runs the exchange. This is not the case on other sites.

Not your keys not your cheese! If you want to self-custody of your own digital wallet you need to be prepared to protect your key like the digital Fort Knox it is. Your private key is what allows you to change the blockchain ledger by buying or selling your crypto.

How do you think NFTs have the potential to help society in the future?

NFT’s could be used as self-sovereign identity. I think the opportunity is a limitless as our imagination.

What are your “5 Things You Need To Know To Create a Highly Successful Career In The NFT Industry?” (Please share a story or example for each.)

Read, Read and Read. You need to constantly learn new concepts like Defi, yield farming, staking etc. The industry constantly evolves, and you have continue to learn.

Develop a network of people you can share ideas with. I have security, business and technology professionals I call on to help explain all matters of concepts to me. There are no bad questions!

Listen to a variety of opinions. I have several people whose views on crypto with whom I disagree. I read them anyway because it broadens my thinking and helps me avoid an echo chamber.

Network, Network and Network. There are a lot of smart and thoughtful people out there. Go find them!! I have developed some great relationships in the industry from LinkedIn just because I asked a question on their post. Don’t be afraid to ask a question!

If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be?

Take privacy and cybersecurity seriously. Social media and the monetization of our personal data has had some profoundly negative consequences on our society. Now with Web3 we want to further automate our life without paying attention to our privacy and security. We need to learn from past mistake and make wiser choices!

We are very blessed that very prominent leaders read this column. Is there a person in the world, or in the US with whom you would like to have a private breakfast or lunch, and why?

Tom Hanks. I think we learn a lot about our culture through cinema. I bet he has an amazing perspective of the last 70 years through his roles in cinema. That would be a great conversation as I enjoy history so much.

Thank you for the interview. We wish you only continued success!