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NFTs and Copyright: Beware of this before buying!

Have you ever thought of buying an NFT digital art piece? Do you know exactly what you are paying for?

I asked myself this very question since the explanations I saw online were vague and confusing. Ultimately, which rights are we acquiring when buying an NFT?

To answer this question, I did some research only to discover that my worries were justified. When we buy an NFT, we are NOT acquiring the digital art piece we thought.

Want to know why? Then keep reading. There are some things you should know.

Before starting: What is an NFT?

NFT stands for Non-Fungible Token. Non-Fungible essentially means that it cannot be replicated or reproduced or, in other words, it is a “one of a kind token.” Why do we use the word token if we are talking about digital assets? Well, that is because a record of the item is stored on a decentralized ledger, commonly known as a blockchain, and takes the form of a token.

The purpose of this article is not to go into detail regarding what an NFT is; if you are looking for an answer to that, this article is the place to go :).

Are NFTs as unique as we think?

Right now, there is a lot of hype around NFTs because some are being sold for millions.

Let’s be sincere; we all want to be that person who sold their jpg for $69 million.

“Everydays — The First Five Thousand Days” by the artist Beeple

Consequently, many people started to see NFTs as a new way to monetize their art, their pictures, and even their screenshots.

Many digital artists see the potential NFTs have as a way to add value to their work and monetize it. However, both digital artists and buyers need to be aware of a few things that are not always clear and transparent in this space.

If you are detail-oriented, you have probably noticed that you can register “copies of digital items.” Let me elaborate on what I mean by this exactly.

The first and most important problem NFTs currently have is that even though the token created is non-fungible and therefore unique, it does not mean that you are buying the ORIGINAL PIECE from the rightful owner. If I want, I can download a picture from the internet, use it to create an NFT, and sell it. Unless the original artist comes after me, I would own an NFT from a stolen picture and sell it to you. You will not know that I am not the original creator, and I would be making some money for my vacations to the Bahamas 😎. Great deal, isn’t it?

Yes, I know. It doesn’t sound right.

After a lot of research on the topic, unfortunately, I confirm that it is true. This fact led me to check some more resources about how the original idea behind NFTs started, and I found out more shocking information.

Let us take a few steps back to 2014. Anil Dash partnered with Kevin McCoy and came up with the idea of creating a blockchain-backed way to verify ownership over an original digital work. In his article, he explains that due to technical limitations and time constraints, their version of NFT ended up being created not from the original digital artwork itself but from a link to it, a web address where the work is uploaded, and most likely compressed. This loophole is still in place today.

Wait, what?

Yes… Exactly that… As if it is not enough to find out that you can make an NFT from a copy of something, you are not even getting the copy, but “a link to a copy of something”…

In most of the articles and NFTs marketplaces, this little tiny detail is NOT MENTIONED. Buyers who acquire NFT’s believe they are buying a unique digital artwork when they get a link to it (of a copy). Nobody knows who the real owner of the original piece is, where it comes from, where it is stored, how many other copies exist, or how it is used. Worst case scenario, it can even happen that the site hosting the link to the digital piece might disappear in the future.

Too scary to be true? I also couldn’t believe it, so I kept digging only to find more sad facts to confirm my theory.

I admit it. I am one of these weird people who actually read Terms & Conditions in the user agreements. So I went through a bunch of NFT marketplace T&Cs, which are phrased differently but essentially are all the same.

Here’s just one example I came across, a marketplace where you can buy NBA-related NFTs.

Their terms and conditions state the following:

XXX is an application that provides users with the opportunity to purchase, collect, and showcase digital blockchain collectibles containing exclusive content from the National Basketball Association (the “NBA”) and its current and former players (collectively, the “App”)…

… (v) User License to Art. Subject to your continued compliance with these Terms, we grant you a worldwide, non-exclusive, non-transferable, royalty-free license to use, copy, and display the Art for your Purchased Moments, solely for the following purposes: (a) for your own personal, non-commercial use…

Yes, you read that right…. You technically own the NFT, but the rights to use it, copy it, or display it are non-exclusive… In other words, the seller and/or platform can also use the NFT, and they can even create another NFT using the original digital item and sell it to someone else. Not that unique anymore, right?

NFTs and copyright

If you are buying digital art, you may have already noticed how bad things look for you in acquiring the digital item’s copyright. Unless you ask for some verification from the seller, it is impossible to know if the person who uploaded the content is the rightful author and holds the original copyright or just a copy of the original work being uploaded.

How can we be sure we are buying the digital art piece from the original creator?

The truth is, as of today, there is no way to protect any of the parties.

If you are a collector or would love to invest in unique digital art pieces, I regret to tell you that NFTs are not the way to go. Even if the ‘minter,’ a.k.a NFT creator, ends up proving to be the author of the digital art/item and promises to sell the NFT only to you, buyers will buy nothing more than a link to the art piece. From a legal point of view, they would not be acquiring any copyright over the original art piece they just bought. The author will still have all of the rights over the original work. The buyer will have nothing else than a link to the digital artwork, with the link being stored at some centralized server and a transaction identifier. They will look at it, print it, and not have related rights over the original content.

It is frustrating, I know.

I believe that collectible unique digital art pieces are a great idea, but they won’t succeed like this. If we want the NFT concept to evolve and become fair, transparent, and legitimate for everybody, things need to change. The first step in the right direction would be to inform users about what they are truly paying for.

Another essential step would be to insert some authorship verification and eventually stop using “links to things” to create NFTs.

Now, what you are about to read might sound like pale self-promotion, but hey! Some folks and I are working really hard to find a solution to this problem! Our solution is to make the authorship verification process transparent and legitimate. The idea and the implementation will bring more security to NFTs and bring a huge positive change to the digital art market, allowing copyrights to be easily verified, shared, and sold. If you want to check more about the project, the name and website are Kelp.Digital :)



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