What’s the Deal with NFTs & Copyright Protection?
Let’s explore NFTs and copyright protection in this article.
We will also tackle the benefits and negatives of NFTs.
In addition, enforcing copyright protection for artists and future problems will also be looked into.
Table of Contents
NFTs: The Solution to Digital Art Market Issues
Cryptocurrencies such as Bitcoin and Litecoin have undoubtedly changed the way that humans interact with currency.
Non-Fungible Tokens are the next step in this evolution.
They could change how people make purchases and protect their intellectual property.
Non-Fungible Tokens (NFTs) are a type of digital asset or cryptocurrency unique from others due to their natural characteristics.
There are many benefits associated with the use of NFTs for enforcing copyright protection.
First, when an artist creates a work subject to copyright law (also called “works of authorship”), they can apply to have their work registered with the US Copyright Office.
This registration will give them exclusive rights to make copies of the original work.
In addition, they will also have the right to distribute it and produce derivative works based on it.
When an artist publishes two artworks, there is a clear physical distinction.
This is because the metadata encoded in the NFT is different.
As a result, two NFT-identical pieces contain unique digital properties.
NFT’s protect intellectual property.
When looking at the implications of how artists enforce and use copyright with non-fungible tokens, there are many different aspects to consider.
These aspects are ownership, transfer-ability, authenticity verification, and provenance tracking.
When all these are combined, they form a comprehensive solution for today’s digital art market issues (such as unauthorized reproductions).
How Non-Fungible Tokens Affect Copyright Enforcement
What is the primordial question to address when assessing how non-fungible tokens affect copyright enforcement?
That questions is whether or not it would be possible to replicate an original work by cloning it from a single non-fungible token.
If this were possible, artists could simply create one instance of their work on the Ethereum blockchain to avoid unauthorized reproduction without additional enforcement mechanisms.
However, because its unique token represents every individual instance of work, this isn’t possible.
This would mean that some form of digital rights management will still be necessary even with non-fungible tokens.
In terms of transfer-ability, non-fungible tokens are much less restrictive than traditional copyright enforcement.
This is because non-fungible tokens can be transferred to anyone without needing approval from the artist.
It’s also possible for someone else to take ownership of a token that does not belong to them.
For example, if someone wanted to sell their art on an online marketplace like Open Bazaar, they would need to transfer their token ownership for the artwork to be sold.
The owner would then receive payment in cryptocurrenc.
They could then withdraw it as fiat currency or invest back into another asset like Ethereum or Bitcoin.
Using NFTs for Authentication and Copyright Protection
Another aspect to look into at how non-fungible tokens affect copyright enforcement is authenticity verification and provenance tracking.
It would be possible for artists using non-fungible tokens with these features enabled, such as CryptoKitties.
Then, these will prove that an item is authentic.
This is done by linking back to its token blockchain through digital certification signatures or other methods implemented by the individual artist.
Furthermore, it’s possible for artists who use this type of authentication system, combined with smart contracts, to create a comprehensive solution.
This solution verifies their ownership rights while simultaneously determining how many copies each work can have (such as 1).
They could also limit what types of transfers are allowed per individual instance, including buying and selling but not reproducing works in any way.
By analyzing all these aspects together, some things become clear.
Today, there are many different solutions when dealing with digital art market issues related to unauthorized reproductions.
Thanks largely to the emergence of Non-Fungible Tokens.
Downsides of NFTs
The negatives are that NFTs may not be enforceable in countries that have no copyright protection.
The artist can’t control the work price, leading to a lower price than what they would like.
NFTs are not as enforceable as other forms of copyright protection.
While the artist may have filed a trademark on their work, it does not necessarily mean that they own the design’s rights.
They could be using someone else’s artwork without knowing it and then filing a trademark.
Now, making them liable if an infringement occurred.
Non-Fungible Tokens require a centralized ledger to be maintained.
This expensive and prone to security risks.
The main negative of NFTs for copyright protection is that the artist must identify each instance of their work.
The more instances, the more difficult it becomes to keep tabs on them all.
Additionally, these tokens are not compatible with Ethereum wallets.
For example, if a user has an ERC-721 wallet and wants to trade their token for another, they would have to use a smart contract that acts as a proxy.
This can be a difficult process.
To use this technology, a user must have the technical know-how.
They must also be able to execute the scripts that are used to interact with the tokens.
Non-fungible tokens are not compatible with many online services that artists use to distribute their work.
For example, a user cannot upload their token to YouTube.
The token cannot be uploaded to a social media site.
Additionally, these tokens cannot be uploaded to an online marketplace such as Steam.
A user must upload the token to a decentralized application that is compatible with the token.
Non-fungible tokens are not compatible with the Ethereum wallets that are in use today.
NFTs and Copyright Protection
NFTs are a new technology, and their long-term future is unknown.
Copyright holders may refuse to license NFT rights.
Alternatively, they might require special terms that limit purchase, use, or application of the work.
They cannot be resold.
Since there is no centralized marketplace for them at this time.
Moreover, you cannot resell an NFT unless it’s given back to the issuer in its original state.
This means that if you want to sell your valuable (rare) NFT on a digital marketplace like eBay or Amazon, you would need to go through the process of returning it before listing it for sale again.
Another major use for Non-Fungible Tokens is copyright protection.
This protection refers to when creators put their work onto the blockchain as an immutable record.
This record cannot be tampered with or copied without permission from the creator themselves.
In short, whoever owns the rights to it (usually an IP holder).
Codex Protocol has largely pioneered this.
They have created a platform for artists and collectors to register their works on the blockchain.
So, they can’t be copied or sold without permission.
This practice has led some people within the art world to call it “the world’s first decentralized art registry.”
For this registration process to be completed, there are three requirements:
1) The original work has been created by someone who qualifies under copyright law;
2) The creator makes at least one copy or phonorecord of any kind; and
3) The object being registered must satisfy all the criteria in Section 102 of U.S Law concerning the copyrightable subject matter.
Advantages of NFTs for Artists
Let us first discuss the advantages of the NFT.
Portable NFTs can be bought and sold on special marketplaces.
You can buy the complete cost of the digital item or buy the item separately.
Unique NFT has a strong information tab to explain their uniqueness.
For example, some popular games such as PUBG and Fortnite now prohibit the purchase of rare features and items such as weapons.
With NFTs, however, these items can be easily transferred and used.
There is talk of members of Decentraland buying virtual land.
Rare NFTs increase in value to which people seem drawn.
Thanks to their inclusion on a public register.
NFT subspaces are still being developed, and NFT-focused products and projects are constantly being improved.
Non-fungible means that you can’t exchange it for similar goods at similar prices.
It is digital because it’s created with its NFT.
A newly minted NFT creates a file that lives on the blockchain.
The beauty of this technology is that, in this case, the file is not copied, pasted, edited, deleted, or otherwise manipulated.
Instead, it’s the original creation.
Copies of the work can be made and distributed, even if they do not exactly correspond to the original and have less value.
One of the biggest attractions for artists is that NFTs make continuous payments after the first sale.
When tokens are sold on the secondary market, the Creator receives 10% of the purchase price paid by the tokens’ continued sale.
NFTs Override the Traditional Model of Copyright Enforcement
You get more rights to use your art than in the real world.
Take, for example, the digital world of crypto kitties.
They imitate the standards set for physical goods.
In Disney’s example, you don’t make money from every plush toy you buy.
How Does Copyright Work Traditionally?
In principle, a copyrighted work begins as a one-off.
This could be the first manuscript of a book of any kind by an author written by hand on paper.
Or it could be the name of the manuscript, the original music of a composer, the original sketches of a famous artist, and so on.
All these unique pieces can be copied and published.
But due to the nature of their existence and copyright protection, each one has an economic value since its non-fungible object owns it.
This is the non-fungible element of a copyrighted work.
Scarcity is a good thing because it benefits both creators and buyers of artifacts.
However, technology aimed at codifying and enforcing scarcity indicators is at odds with the open internet concept.
NFTs offers some very interesting possibilities for protecting your intellectual property.
This is because you can create digital objects without making a physical copy or phonorecord.
Benefits of Using Non-Fungible Tokens for Copyright Protection
The first benefit is the potential for increased sales or licensing revenue.
Artists can sell their art as a token on the blockchain.
This would mean that there’s no need to ship physical copies of artwork.
In order to receive payment, they simply issue digital tokens when someone purchases artwork from them.
Digital ownership of digital content will also increase artists’ revenue.
This is because there will always be people who want something tangible and not just digital files alone (such as collectors).
This could also lead to increased licensing opportunities.
Music producers or video game developers license songs/artworks from artists.
This is especially true for those who cannot provide all the content themselves due to time constraints or lack of necessary resources.
The second benefit is increased copyright protection .
A blockchain ledger stores all transactions permanently.
If somebody tries to steal your work, there will be evidence.
Thanks to being recorded on the blockchain network versus having nothing but your word against theirs.
Note that in traditional copyright protection, neither party has any proof whatsoever that theft happened.
Unless they were caught red-handed at that moment in time.
Blockchain networks can track down anyone who may misuse copyrighted material.
This is because no one else can be involved other than that artist and purchaser in each transaction through smart contracts.
There’s a chance of violating the intellectual property law by changing the data stored within the ledger.
This would mean that whoever tried doing this would need to access permissions.
Otherwise, this person wouldn’t even know how changes were made.
Of course, this is unless they had done their research beforehand.
Making any edits or changes isn’t possible during runtime.
They need to maintain constant control over every node connected within this network.
All of this is happening while still operating within legislation protecting IP laws according to worldwide legal agreements.
Unauthorized “Spin-Off” NFTs
In the art market, provenance (the origin of a piece of art) is king.
An unauthorized Banksy-style “I can’t believe you morons buy this NFT shit” was sold for $900,000.
These spin-off force us to ask ourselves: When is it appropriating someone else’s style?
Would NFTs make copyright infringement easier? What is the value of having an official work by an artist?
Final Thoughts
Artists need a better way to protect their artworks.
The flexibility of NFTs appears to be the solution.
You have more rights which should potentially have many more sales.
If you liked this article on NFTs and copyright protection, you might also want to read these articles.
A Review of Rarible: Buying and Selling NFTs in Rarible
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