The Copyright Side of NFTs

Published in

Coinmonks

7 min readFeb 24, 2022

Introduction

The world crisis of 2008 destroyed trust in state currencies and those who control and manage them. Satoshi Nakamoto, in its post-crisis white paper, attributed the cause of the crisis to the greed of the financial institutions that manage the money and the callousness of the states that control the money. In the same white paper, Nakamoto introduced a cryptocurrency called Bitcoin, which is encrypted through blockchain technology, which we call crypto. That day Nakamoto formed the first link of the chain. Although it was not understood much that day, this technology that Satoshi Nakamoto presented to the history of humanity would turn into a revolution by absorbing money and all the instruments related to it. After the first ring, new rings continue to be added to the blockchain revolution every day. While one startup took the speed and trust of this technology and established a payment and transfer system, another entrepreneur took the reliability of this technology and established a contract system, NFTs, which are on everyone's tongue these days, emerged.

What is NFT?

Non Fungible Tokens, in the shortest definition, are digital assets that have no other equal. It represents many digital assets that are unique, from collector’s items to virtual shoes, from virtual game content to digital properties. NFTs are produced using blockchain technology, mostly with Ethereum token standards. However, unlike cryptocurrencies, they are not created with Ethereum’s ERC-20 standard, but with ERC-721 and ERC-1155 standards.

Unlike other virtual products that make NFTs unique, fungible copies cannot be produced. When the producer creates the ring on the Ethereum chain, it only occurs in his own wallet, and when the exchange or sale transaction is made, the token is tokenized from the owner's wallet to the other person's wallet. This is why this instrument has become so popular today. After producing the artwork, the artist of the artwork can hash the number of tokens how much the artist wants to create while hashing on the chain, the identity of the artwork, that is, the artist’s own identity, to the token together with the work. In addition, the artist can quickly exchange its NFT, which it has created with the ERC-721 standard, via smart contract. A work of art created with NFT is easily identified and the number to be produced is determined while the hashing process is performed in the first stage, and it cannot be changed after this hashing process is performed. Once the minerals in the chain are turned on and the NFT is formed, the structure of that chain cannot be changed again, and this gives the owner the opportunity to keep the work of art securely and to exchange and transfer it when necessary. If he wishes, the owner of the work can keep the work of art, or he can quote and sell it on the relevant exchanges. NFT gives the owner the chance to do all these transactions with one click. Those cat stickers, NBA trading cards, or shoe models that have been created so far have been become NFTs in this way and exchanged on exchanges to find new owners for astonishing figures. So, do we ensure security only by hashing the chain, what will happen if someone else NFT’s our work or any work very similar to ours before us and quotes it on the stock markets?

The Legal Side Of NFTs

As we asked above, what can we do if someone hash as NFT our artwork as if they had done it before us, or if they hash as NFT after us, quote it on the stock market, and trade it? Here, I would like to divide the question into two and answer it, if we hash the chain before that person and create NFT after the approval of the miners, we will protect ourselves thanks to the consensus, which is a feature of the blockchain. Because we have hashed before that person, it is clearly seen on this chain, and even if this work of ours has been hashing after miner approval, creating an NFT artwork will not take place even if that person submits the same work for miner approval, but I would like to open a parenthesis on one issue here, and that is the same. The artifact will not be NFT’ed again on the same chain after us, but a similar work will be NFT’ized after the miner's approval. Here we will not be protected again from copying or if NFT’ing takes place to another chain, protection cannot be provided here because the management mechanism of each chain is different from each other. However, we have protection against copying according to intellectual and industrial property rights both in national laws and in international law the blockchain does not provide this protection to us. If we come to the other stage of the problem if someone submits our work before us for miner approval and NFT, if the blockchain does not protect us here, our work will be hashed as an NFT as if it were someone else’s and can be easily traded on exchanges. There has been an incident on this subject recently, someone NFT’ed the paintings of a popular artist in England as their own and sold them on the stock market. There is a misconception that NFTs provide superior protection because they have become extremely popular today, but even this recent event in the UK shows us that NFTs, as it is thought, are given to the owners of the works, such as intellectual and industrial property law or patent law, on their works for the reasons I mentioned above. It does not provide superior protection. The blockchain enables the owner of the work to identify his work while NFT, to produce as much as he wants, not to produce more than the number he determined while producing, and to perform clearing and transfer transactions easily. As it is thought, it does not provide superior protection like intellectual and industrial rights. Currently, no law has accepted NFTs within the scope of intellectual and industrial rights, it has not provided an opportunity to provide protection under that law.

NFTs with Decentralised Artificial Intelligence

As I mentioned above, NFTs can be protected under certain conditions thanks to blockchain technology, but on the condition that they are enameled on the same chain. Once the same work is enameled, it cannot be enameled again or any other identification can be made other than the identity of the producer, but a similar or very close copy of the same work can be easily enameled on the same chain, or someone else can enamel on other chains as if they were the owner of that work. In this century, as everyone agrees, there were two important technological revolutions and these revolutions started to change all paradigms gradually. One of them is blockchain technology, which is the subject of this article, and the other is artificial intelligence technology. However, no matter how many revolutions we support these technological developments, they contain many deficits or problems. In recent days, experts have started to argue that the vulnerabilities of these technologies can be fixed by using these technologies themselves, what they mean is the blending of artificial intelligence and blockchain technologies. In this article, I will not talk about decentralized artificial intelligence from beginning to end, but I think that the problem of NFTization of artworks after being copied and NFTized or NFTized by someone else on another chain can be solved with artificial intelligence and its deep learning facility. Currently, the chain management in the blockchain is in miner-controlled nodes, and these nodes are completely computerized, if we turn these nodes into artificial intelligence algorithms fed by deep learning and turn all the chains into a giant chain that can communicate and consensus with each other, and this chain will be We can solve this problem if we give the management to the artificial intelligence supported nodes. Because the artificial intelligence algorithm will transfer the previously enameled work to the data bank and learn, thanks to deep learning, and then it will be able to distinguish the same work or a similar work uploaded to the chain more easily from the current nodes, and when we turn all the chains into a single big chain, this artificial intelligence-based node’ Since the files are linked to other chains, they will have the ability to scan and distinguish the works uploaded to that chain at the consensus stage.

Conclusion

While Satoshi Nakamoto was writing that white paper that day, it only wanted to eliminate banks and states and create safer money, but it actually started the first sparks of the revolution that the financial system has been looking forward to for years. The steps that followed became the impetus for that revolution and brought blockchain technology to what it is today. NFTs should not be viewed as just a trend, they allow us to protect our assets and transfer them easily and securely. However, in order for this method to provide protection as we imagine, this area needs to be regulated by the states and developed more technologically. Everything would be better if the states we trust behind this system and these technologies that we now call revolution...

The Copyright Side of NFTs

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Written by Şaban İbrahim GÖKSAL