Nathier Abrahams, Pitso Tsibolane, Jean-Paul Van Belle
Digital art has many major pitfalls, ranging from issues around tracking ownership to piracy.Non-fungible tokens (NFTs) can solve these issues and bring new benefits, such as access to larger markets.Despite this, South Africa's digital artists have slowly adopted NFTs.This research aims to understand the values-based perceptions of South African digital artists toward NFTs.Fifteen South African digital artists were interviewed using semi-structured interviews guided by the updated Holbrook's Typology of Consumer Value framework.Ten positive perceptions, three negative perceptions, three risks and one benefit were identified, explored and analyzed using the framework.This research can assist digital artists and other stakeholders in the NFT ecosystem to understand the values-based perceptions of South African digital artists.It can be used to help assist decisionmakers, artists, intermediaries and other stakeholders in South Africa and potentially elsewhere.Additionally, the validated and updated Typology of Consumer Value can benefit researchers using this framework in future research.
Abstract Significant interest in non-fungible tokens (NFTs) as a means of changing the music industry has motivated this investigation. First, a comprehensive literature review (of strengths, weaknesses, opportunities and threats [SWOT]) provides a summary of the benefits and costs associated with the deployment of blockchain- and NFT-based transactions in the music industry. Considerable effort has been devoted to identifying the economic, legal and regulatory benefits and drawbacks of applying the new technology. NFTs may be the final realisation of the digital universe, bringing exclusivity and revenues to the creator economy and the chance to revalue creative work. The technology's drawbacks may exceed its advantages. Navigation within the crypto regulatory landscape is still deemed as exploring uncharted territory. It is further complicated by the fact that it is largely uncertain which legal framework may apply due to the lack of jurisdiction-identifying criteria. Second, quantitative research is conducted as an online survey directed towards two research questions: 1) What is the extent of familiarity and knowledge related to NFTs, as well as perspectives on NFTs as potential disruptors? 2) What is the extent of music creators’ perception of NFT-related opportunities and NFT integration into the music industry? Twenty EU countries were selected for the survey. Respondents answered twenty questions focused largely on demographics, their awareness of NFTs and their perceived potential for disrupting the music industry. It is too early to say whether NFTs will be utilised successfully, especially by independent musicians. The arguments in favour of NFTs are compelling, but there are issues regarding the levels of awareness and competence required for implementation.
Decentralized Applications (DApps) refer to computer programs that operate on blockchain platforms and are designed to handle significant amounts of money, facilitate transactions involving valuable assets, and oversee the transfer of digital rights among numerous parties. DApps provide a trustless environment for autonomous, transparent, and fully traceable exchange of value. Many traditional industries, such as finance, energy, and supply chain, are expected to be revolutionized by this new technology. Yet, in reality, the trustworthiness of DApps is under constant threats, with people losing millions of dollars. In this presentation, I will demonstrate how the security and fairness in the DApp world are both due to the mismanaged conflicting interests between contending parties. I will also present solutions we have developed in the past few years and suggest potential future directions.
The subject of this study is the legal-economic analysis of the non-fungible token phenomenon. Due to the a priori accessibility of many tokenized intellectual products, the ability to monetize them by copyright methods turns out to be hard to implement. The paper puts forward a hypothesis that token owners apply innovative monetization methods, which do not stand on the prohibition and restriction of access to the protected results of intellectual activity. Instead of deactivated copyright restrictions, token buyers receive some new, additional, non-trivial economic utility that researchers have not reflected yet. If this utility exists, we should identify, analyze and include it in the equation of relations regarding NFT. The second hypothesis of the study stems from the first one. It states that the results of creative activity in the post-economic society take the place of a new etalon of value, which replaces the materialistic standard of worth based on rarity. The consensual value contained in tokenized works brings additional motivators for token purchasers and compensates for the lost sources of income. Our goal is to put and verify the scientific hypotheses of tokenized works' additional non-obvious value existence. We suppose that this innovative utility substitutes traditional copyright ban-based monetization abilities. The research's purpose is also to theoretically generalize its results and formulate a legal-economic concept that explains the motivation for the purchasers of non-fungible tokens and sets the regulations for the NFT market. Methodology. The study of the non-fungible token phenomenon and the verification of formulated hypotheses conducts from the standpoint of the law, economics, an interdisci-plinary legal-economic – institutional point of view, as well as with the help of the monistic copyright doctrine of the People's Republic of China. The research methodology also includes an analysis of the relevant body of knowledge and various points of view of the scientists on the subject of research. The study's main result is the novel elaborated concept of the non-fungible token owner's moral right. This concept fills the rising doctrine of utilitarian digital rights with legal-economic essence. We constructed the non-fungible token owner's moral right consisting of two powers: the right to designate one's name as the owner of a token for a specific creative product and to demand such an indication from others; and also, as a duty of NFT platforms to support the function of informing about the name or pseudonym of the token's owner. Analysis of the appropriate accumulated knowledge, development, and verification of formulated hypotheses on tokenized works' consensual value and additional economic utility, allowed us to achieve the goals of this study. We resolve the issue of token purchasers' motivation and legal-economic grounds for their rational behavior by formulating and substantiating the concept of non-fungible tokens' owner moral right.
Copyright law safeguards the exclusive rights of authors to their intellectual creations, emphasizing reproduction, public display, and adaptation. A fundamental distinction within this realm is between the intangible creative work and its tangible representations. Owning a tangible embodiment (like a painting) does not grant rights to reproduce the intellectual work it embodies. This demarcation is critical in the dynamic landscape of non-fungible tokens (NFTs), as acquiring an NFT does not automatically confer rights to the associated work. Instead, rights hinge on explicit contractual terms accompanying the NFT transaction. As the world of NFTs continues to unfold in all sorts of directions, delving deep into the intricacies of copyright law is important for artists, investors, and legal practitioners navigating the digital frontier. This chapter offers insights into the various copyright implications associated with NFTs.
Les Non Fungible Tokens (NFTs) ont une importance grandissante dans des secteurs qui sont concernés par le droit d'auteur, comme l'art, les jeux ou les métavers. Ce domaine du droit est donc particulièrement impacté par ce nouveau phénomène. Cet article tente de répondre aux principales questions qui se posent dans ce contexte, comme la protection de l'auteur en cas de création d'un NFT ou le transfert de droits patrimoniaux lors du transfert d'un NFT.
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 Non Fungible Tokens (NFTs) gewinnen in Bereichen, die vom Urheberrecht betroffen sind, zunehmend an Bedeutung, etwa in der Kunst, bei Spielen oder im Metaversum. Dieses Rechtsgebiet ist daher besonders stark von diesem neuen Phänomen betroffen. Der vorliegende Artikel versucht, die wichtigsten Fragen zu beantworten, die sich in diesem Zusammenhang stellen, wie beispielsweise der Schutz des Urhebers oder der Urheberin bei der Schaffung eines NFT oder die Übertragung von Vermögensrechten bei der Übertragung eines NFT.
Este artigo analisa a ideologia, os usos e as implicações do NFT (Non-Fungible Token) para a economia da música. O NFT resgata a ideologia da desintermediação das relações econômicas ao prometer retornos financeiros mais altos ao artista, decorrentes de sua conexão direta com o consumidor. A tecnologia, no entanto, reorienta a carreira dos artistas, bem como sua relação com os fãs. Informado pela filosofia anarcocapitalista, o uso do NFT tem condicionado artistas a verem suas obras como ativos valorizáveis, cabendo aos fãs o papel de investidores. A partir da análise bibliográfica, investigamos: (1) a ideologia da desintermediação na economia da música, (2) a inspiração anarcocapitalista no desenvolvimento de tecnologias financeiras, como o NFT, (3) o uso do NFT no mercado de música e (4) o papel dos fãs em uma economia da música financeirizada. Como conclusão, apontamos como o uso de tecnologias como o NFT faz parte de outro momento da indústria da música que pode ser rotulado como pós-streaming.
Non-fungible tokens (NFTs) are digital assets that provide unique ownership and authenticity of digital media such as art, music, and collectibles.NFT Marketplace is a blockchain-based platform that enables the creation, trading, and collecting of NFTs.The platform leverages blockchain technology to ensure the authenticity and ownership of NFTs, providing a secure and transparent way to transact digital assets.In this major project report, we explore the NFT Marketplace and its underlying blockchain technology.We provide an overview of the platform's features, including the ability to tokenize any digital asset, create customizable smart contracts, and sell NFTs with low fees and instant trades.We also discuss the advantages and disadvantages of the platform, including its ease of use, potential for fraud, and scalability challenges.The Non-Fungible Tokens (NFTs) have revolutionized the digital realm, redefining the concept of ownership and trade of unique digital assets.NFTs represent one-of-a-kind tokens, each verifiably and indelibly linked to a specific digital or physical asset, encompassing diverse forms of content, including video, audio, and images.These unique tokens have paved the way for creators to monetize their digital creations while providing collectors with an innovative means to invest, trade, and showcase their multimedia NFT collections.Central to the NFT ecosystem are NFT marketplaces, digital platforms designed to facilitate the creation, sale, and management of NFTs in various multimedia formats.These marketplaces have proliferated, providing creators with the means to mint NFTs, buyers with the opportunity to acquire them, and collectors with platforms to curate and trade their diverse NFT portfolios.We explore the multifaceted world of NFT marketplaces, focusing on their pivotal role in the creation, sale, and management of video, audio, and image NFTs.We analyze the economic implications, including pricing strategies and royalties, while addressing environmental sustainability concerns associated with NFTs.Challenges and opportunities encountered within this dynamic ecosystem are critically examined, including scalability, intellectual property rights, and the emergence of decentralized NFT marketplaces.Through in-depth case studies, we offer insights into the unique features and innovative approaches adopted by leading NFT marketplaces, shedding light on the transformative potential of this digital metaverse.This report serves as a valuable resource for those seeking a comprehensive understanding of NFT marketplaces catering to video, audio, and image NFTs, emphasizing the profound impact these tokens have on the creation, trade, and experience of digital content across various media formats.Navigating this dynamic digital frontier necessitates a nuanced perspective, and our survey aims to provide a holistic view of this rapidly evolving landscape.
Raffaele Ciriello, Alexandra Cecilie Gjøl Torbensen, Magnus Rotvit Perlt Hansen, Christoph Müller-Bloch
Abstract Initially designed to protect intellectual property (IP) of digitalized information goods such as music, games, or books, existing centralized digital rights management (DRM) systems mostly serve the interests of major publishers, with scant inclusion of rights owners, creators, and consumers. Although various blockchain-based DRM systems have been proposed, most of them mirror existing counterproductive IP restrictions. Analyzing the music industry as a case in point, this paper proposes design principles for blockchain-based DRM systems that provide an integrated and flexible solution by enabling transparent music licensing structures, consistent and complete rights metadata, and efficient and transparent royalty payout. The solution can be achieved by storing rights metadata on a public distributed ledger, by validating metadata through a consensus mechanism on a permissioned blockchain, and by algorithmically enforcing royalty payout via stablecoin through a smart contract. The design principles were evaluated by industry experts, validating their benefit for the music industry by increasing surplus value that is currently destroyed through previous suboptimal designs.
In this chapter, I use methods drawn from literary analysis to bear on artificial scarcity and explore how literary and legal storytelling engages in scarcity mongering. I find three particular narrative strategies calculated to compel a conclusion in favor of propertization: the spectacle of need, the diversionary tactic, and the rallying cry. First, I unpack the spectacle of need and its diversionary aspects through several literary accounts of scarcity and starvation. I juxtapose Franz Kafka's "A Hunger Artist," a story explicitly centered on a wasting body, with J.M. Coetzee's The Life and Times of Michael K. Second, to explore how scarcity fables offer diversionary tactics that redirect attention away from actual scarcity, I consider NFTs, or non-fungible tokens. NFTs reflect the arbitrary value scarcity can produce, especially when artificially generated. Yet NFTs offer a spectacle of need that distracts from actual scarcity, riding a wave of expansionist property logic that suggests that more ownership is the answer. Third, to consider the scarcity fable's propertarian rallying cry, I offer an extended close reading of a copyright dispute, Leonard v. Stemtech, involving a pair of microscopic stem cell photographs deemed so scarce they were valued at 100 times their past licensing history. Leonard illustrates how a scarcity fable may look in the context of intellectual property ("IP"). The nature of this chapter is necessarily conceptual and speculative, designed to raise questions rather than attempting conclusively to answer them. Through juxtaposition of literary accounts and one legal case study, fables of scarcity emerge as a genre whose very appearance in certain contexts ought to give scholars and policymakers pause. In copyright litigation, in which expansionist property narratives may be especially harmful to the public domain and subsequent creators, scarcity fables may be made to provide apparent support for potentially dangerous changes. Identifying scarcity fables as such when they appear in copyright cases could trigger review of the asserted scarcity and a more searching inquiry into whether the proposed solution could worsen actual scarcity.
Following the emergence of file-sharing networks such as Napster and BitTorrent, the record industry has tended to regard peer-to-peer networks in a negative light. This is hardly surprising: in the terms of Yochai Benkler, such networks provided ‘technological shock’ but not ‘economic sustainability’, at least form an industry perspective. Some have seen recent technological developments as revolutionary, but it is a revolution only in potential: though music can be recorded and distributed more easily than ever, there remains a crisis in terms of attribution and monetisation that the Sisyphean ‘war on copyright’ seems unlikely to solve. Royalty payments in the streaming era, meanwhile, are slow, inefficient and enormously complex. A twentieth century, industrial information model, then, remains dominant, although the apparently inexorable overall decline in income from recorded music is gradually reducing it to a mere husk. This paper suggests that blockchain technology, which, like Napster and BitTorrent, harnesses the power of peer-to-peer networks, could represent a more sustainable model, realising the revolutionary potential of disintermediation and direct-to-fan models to facilitate a shift to what, with a nod to Benkler’s ‘networked information economy’, might be called the networked record industry. As well as exploring the workings of distributed ledger technology, this article outlines the transformation it could bring about in determining the authorship and attribution of recorded music; enabling asset transfers and the tracking of provenance; allowing artists to determine their own pricing and terms of use for their music; facilitating licensing through metadata; introducing frictionless, near-instant micropayments for streaming and downloads. The broader themes of the networked record industry – disintermediation, transparency and the nexus of control – are also explored, as well as barriers to adoption.
Edmilson Silva Dias, André Luís Rocha de Souza, Thayse Santos da Cruz, Érica Ferreira Marques · 7 authors
Esta pesquisa teve por objetivo discutir as estratégias de tokenização para a proteção de direitos autorais no contexto das ICTs. A tokenização é uma técnica criptográfica utilizada para criar ativos digitais exclusivos, como obras de arte, música e livros, que podem ser negociados em plataformas blockchain. No entanto, a utilização de estratégias de tokenização em ICTs também suscita questões complexas sobre a proteção dos direitos autorais. Para examinar a literatura sobre direitos autorais e estratégias de tokenização, foi realizada uma pesquisa com finalidade exploratória, de natureza bibliográfica, com uma abordagem descritiva. Identificou-se que um dos principais desafios dos direitos autorais no Brasil é atualizar-se incorporando os aspectos tecnológicos e o avanço do ambiente cibernético, bem como as relações digitais e as diversas transações no contexto da internet. Por fim, conclui-se que os Non-Fungible Tokens - NFTs representam uma estratégia promissora para a proteção de ativos intangíveis, considerando a capacidade de garantir a autenticidade e exclusividade de um objeto digital, o que pode ser usado como complemento aos processos legais vigentes no país, proporcionando transparência, confiabilidade e rastreabilidade agregada.
Despite the immeasurable value music provides society, finding ways to monetize their music is often an elusive and challenging prospect for musicians. The music industry has evolved into a consolidated “hits market” in which profits are highly concentrated in a small set of intermediaries and relatively few superstars. This “hits market” not only makes it incredibly difficult for most musicians to make a living with their music, it also fails to capture and compensate musicians who aren’t extremely popular for the significant value they create. In the face of this deadweight loss, non-fungible tokens (NFTs) could be a means of disrupting the economic status quo and creating a superior set of economic incentives for musicians. This Article is the first in the legal literature dedicated to evaluating the viability of NFTs as an additional income stream for musicians. After detailing the economics of the traditional music industry and providing a framework for understanding NFTs’ asserted value, this Article considers constraints imposed by contractual obligations and copyright law to analyze NFTs’ potential to transform music monetization. Ultimately, this Article concludes that, notwithstanding their limitations, NFTs are likely to be an important new source of revenue for musicians who have been left behind by the popularity-driven economic incentives of the traditional music industry.
This article addresses the lack of comprehensive studies on Web3 technologies, primarily due to lawyers' reluctance to explore technical intricacies. Understanding the underlying technological foundations is crucial to enhance the credibility of legal opinions. This article aims to illuminate these foundations, debunk myths, and concentrate on determining the legal status of crypto-assets in the context of property rights within the distributed economy. In addition, this article notes that the intangible nature of crypto-assets that derive value from distributed registries, and their resistance to deletion, makes crypto-assets more akin to the autonomy of intellectual property than physical media. The article presents illustrative examples from common law (United States, United Kingdom, New Zealand) and civil law (Germany, Austria, Poland) systems. Proposing a universal solution, it advocates a comprehensive framework safeguarding digital property - data ownership - extending beyond the confines of Web3. This article presents a comprehensive, multi-layered approach to the analysis of tokens as digital content and virtual goods. The approach, universally applicable to various of such goods, scrutinizes property on three distinct layers: first, the rights to the virtual good itself; second, the rights to the assets linked to the virtual good; and third, the rights to the intellectual property intricately associated with the token. Additionally, the paper provides concise analysis of the conflict of laws rules applicable to virtual goods. It also delves into issues concerning formal requirements for the transfer of intellectual property rights, licensing, the first sale (exhaustion) doctrine, the concept of the lawful acquirer, and other crucial aspects of intellectual property in the realm of virtual goods, particularly within the emerging metaverse.
Bu makalenin amacı; kapsamlı bir literatür taramasına dayalı olarak, NFT (non-fungible-token: misli olmayan kripto varlıklar) kavramını işletmeler ve tüketiciler perspektifinden değerlendirebilmektir. NFT; resim, oyun, ses gibi bir dijital varlığa sahip olmak için blok zincire kayıtlı bir haktır. Bir benzeri olmayan, şifrelenmiş dijital varlıklar olan NFT’ler temsil ettikleri dijital varlıkların menşeini/kaynağını koruyarak, önceki sistemlere göre daha kolay ticaretinin yapılmasına, değiş tokuş edilmesine, kimliğinin doğrulanmasına ve transfer edilmesine olanak sağlamaktadırlar. Sanat, koleksiyonerlik, oyun gibi alanlarda görülen NFT uygulamaları yaratıcı içerik üreticilerinin olduğu kadar şirketlerin ve markaların da ilgisini çekmektedir. 2021 yılında hızlı büyüme gösteren NFT pazarı lüks tüketim markalarının yeni tüketici kitlelerine ulaşmasını sağlamıştır. Günlük tüketim markaları da genç tüketiciler ile bağ kurmada ve sosyal sorumluluk kampanyalarına dikkat çekmede NFT uygulamalarını kullanmaktadırlar. Farklı tüketim deneyimleri yaratma, tüketicileri dijital topluluklarda buluşturma yoluyla da NFT’ler tüketiciler ve işletmeler için değer yaratabilme potansiyeline sahiptir.
Non-Fungible Tokens NFTs are digitally scarce, non-exchangeable cryptographic tokens that represent an underlying work such as a picture or video and exist on a blockchain, mostly used to trade in digital art and collectibles. They are the most recent blockchain development and offer a great deal of promise for the future in numerous sectors. Despite this they are unregulated and suffer from a bad reputation and illegitimacy that exists across current public blockchains and cryptocurrency, due to fraudulent actors and misconceptions of what is owned with an NFT. In this paper I posit that NFTs could be used to upgrade Digital Rights Management (DRM) through two possible solutions; a copyright register on a blockchain or moving DRM to blockchain – Distributed Digital Rights Management (DDRM). The objective of these solutions is to solve the ongoing problem of digital piracy, which DRM has never been successful in stopping through present-day encryption or content-blocking services. The other benefit is for authors to be guaranteed fair remuneration for their works by cutting out some unnecessary intermediaries and issuing licences through smart contracts. I consider that if successful, these solutions constitute an evolution of digital copyright protection, though they must first overcome legal, practical, and logistical problems. For either solution to be successful, smart contracts must be able to constitute valid legal contracts with binding obligations as all NFTs contain these to execute terms set by the person creating the token (minter). I show that under current Scots law and under England and Wales contract law smart contracts can satisfy formation requirements of a contract, but they still must overcome the challenges presented by blockchain and a lack of intermediaries such as an established dispute resolution mechanism. I demonstrate in this paper that current digital copyright protection could be upgraded with the use of NFTs, specifically in giving authors direct control over the following DRM functions for which previously they were beholden to intermediaries: Assignment; Licensing; Royalty payments; and Registration. Despite this I outline that each solution must overcome some significant challenges, leading me to conclude that a blockchain copyright register utilising NFTs is not likely to be attempted in the near future but could offer huge benefits for exploiters as well as authors. DDRM is a solution already being developed by RAIRtech and is by its nature an idea that numerous companies can compete to develop best. In the final analysis I conclude that despite their issues NFTs <em>are </em>the evolution of digital copyright protection. The bar has been set relatively low with current DRM, meaning an improvement would constitute an evolution, which is evidenced by the lack of reliable ownership information, authors’ options for revenue, and present-day piracy statistics. <em>This working paper is a part of the "Outstanding LLM Dissertations 2022".</em>
Copyright is a means to an end, not an end in itself. We created copyright because we wanted to encourage the creation and distribution of works of authorship, not because we wanted to enable copyright owners to control the use of the works they own. We stuck with copyright because it was the best tool we had, despite its flaws. Was copyright ever efficient? No. But marginal improvements matter. Technology has changed the copyright calculus. Distribution of works of authorship gradually got cheaper and cheaper. And then the Internet made it free. But creation remained costly, even though technology helped make it easier. For better or worse, copyright was still our best way of encouraging authors to create new works, by enabling them to claim some of the economic value of those works. Of course, copyright was always a compromise, with many flaws. First, it’s overbroad. While many authors rely on copyright, many others don’t—but copyright protects their works anyway, even if they don’t want it. Second, it’s overlong. Copyright protects works far longer than necessary to encourage their production, and keeps forgotten works out of print. Third, it’s inequitable. By design, copyright only benefits commercially successful authors. And finally, it’s inefficient. Most of the benefits of copyright go to publishers rather than to authors. There’s gotta be a better way. And maybe there is. The market for non-fungible tokens, or “NFTs,” enables authors to sell their works without relying on copyright at all. An NFT is a transferable cryptographic token. Authors can create NFTs that represent “ownership” of their works and sell those NFTs to collectors. The NFT market recognizes the owner of a “legitimate” NFT of a work as the “owner” of the work, even though NFTs typically don’t convey copyright ownership of the work. I call this “pwnership,” because it consists of “clout,” rather than control. NFT owners don’t need copyright, because pwnership depends on the endorsement of the author, rather than control of the use of the work. In fact, NFT owners encourage others to use the work, because popularity increases the value of pwnership. Essentially, NFTs allow authors to profit from creating works of authorship without having to control their use. If the potential profit from selling NFTs alone is large enough to encourage authors to create works, then authors don’t need copyright anymore. And if authors don’t need copyright, no one does. In theory, NFTs could finally make copyright obsolete. Works of authorship are inherently public goods. As Stewart Brand famously observed, “Information wants to be free.” And for most of human history, information was at least nominally free, albeit profoundly costly to obtain. While mechanical reproduction made information far less expensive, it also made the cost of creating and distributing information far more salient. Copyright was the kludge we invented to solve that welcome new problem. We had to destroy free culture in order to save it. Maybe NFTs will enable us to finally dispense with copyright and make information free again.
As the golden rule of resolving the conflict between intellectual property and right in rem of the same object, exhaustion of rights aims to avoid the influence of exercising intellectual property right on right in rem. The academic circle is unable to come to any agreement concerning the discussion of extending the rule of exhaustion of rights to the regulation of utilizing works in digital conditions. The blockchain technology and market have a transformative impact on the copyrights in the digital environment. NFT and the mode of NET of digital works have reshaped the traditional ecology of online works transmission and utilization, offering opportunities for the exhaustion of rights to be applied in the network environment. Hence, it is the right moment to create the digital environment to apply the exhaustion of copyrights.
Keywords: NFT, copyright, virtual assets, nonfungible tokens. This article is devoted to the study of non-fungible tokens (NFT) as a new tool, which due to its technical features is unique and unrepeatable and has recently been widely used by art collectors. This article attempts to define the legal understanding of nonfungible tokens from the perspective of civil law, as well as copyrights. In order to achieve this goal, the article identifies the main legally important components of theNFT creation process, which not least determine the place in the system of objects of law. This article defines certain approaches to the understanding of virtual (digital) property in relation to the category of crypto-asset (virtual asset) under Ukrainian law, as a result of which the position about the possibility of attributing NFT for certain conditions is substantiated. The position about the possible obligatory nature ofNFT is substantiated. The possibility of obtaining copyright on the work in connection with which NFT is created, as well as the emergence of resale right is analysed.It is concluded that NFT is not a work, and is not the result of acquiring intellectual property rights, but can only certify property rights. NFT can be secured by a property right of claim, for example concerning the transfer of a property, including the original work of art, the image of which is used for such NFT. NFT is not a separate copyright object, as technically, it is only a metadata associated with a digital file — a digital copy of a copyright or related rights object. The use of the copyrighted work on NFT can be lawfully executed only with the permission of the copyright holder. The use of the NFT copyright may be deemed unlawful under certain conditions, which requires separate permission from the copyright holder.
Ian Rogers, Dave Carter, Benjamin A. Morgan, Anna Edgington
Introduction In a 2019 report for the International Journal of Communication, Baym et al. positioned distributed blockchain ledger technology, and what would subsequently be referred to as Web3, as a convening technology. Riffing off Barnett, a convening technology “initiates and serves as the focus of a conversation that can address issues far beyond what it may ultimately be able to address itself” (403). The case studies for the Baym et al. research—early, aspirant projects applying the blockchain concept to music publishing and distribution—are described in the piece as speculations or provocations concerning music’s commercial and social future. What is convened in this era (pre-2017 blockchain music discourse and practice) is the potential for change: a type of widespread, broadly discussed, reimagination of the 21st-century music industries, productive precisely because near-future applications suggest the realisation of what Baym et al. call dreams. In this article, we aim to examine the Web3 music field as it lies some years later. Taking the latter half of 2021 as our subject, we present a survey of where music then resided within Web3, focussing on how the dreams of Baym et al. have morphed and evolved, and materialised and declined, in the intervening years. By investigating the discourse and functionality of 2021’s current crop of music NFTs—just one thread of music Web3’s far-reaching aspiration, but a potent and accessible manifestation nonetheless—we can make a detailed analysis of concept-led application. Volatility remains throughout the broader sector, and all of the projects listed here could be read as conditionally short-term and untested, but what they represent is a series of clearly evolved case studies of the dream, rich precisely because of what is assumed and disregarded. WTF Is an NFT? Non-fungible tokens inscribe indelible, unique ledger entries on a blockchain, detailing ownership of, or rights associated with, assets that exist off-chain. Many NFTs take the form of an ERC-721 smart-contract that functions as an indivisible token on the Ethereum blockchain. Although all ERC-721 tokens are NFTs, the inverse is not true. Similar standards exist on other blockchains, and bridges allow these tokens to be created on alternative networks such as Polygon, Solana, WAX, Cardano and Tezos. The creation (minting) and transfer of ownership on the Ethereum network—by far the dominant chain—comes with a significant and volatile transaction cost, by way of gas fees. Thus, even a “free” transaction on the main NFT network requires a currency and time investment that far outweighs the everyday routines of fiat exchange. On a technical level, the original proposal for the ERC-721 standard refers to NFTs as deeds intended to represent ownership of digital and physical assets like houses, virtual collectibles, and negative value assets such as loans (Entriken et al.). The details of these assets can be encoded as metadata, such as the name and description of the asset including a URI that typically points to either a file somewhere on the Internet or a file hosted via IPFS, a decentralised peer-to-peer hosting network. As noted in the standard, while the data inscribed on-chain are immutable, the asset being referred to is not. Similarly, while each NFT is unique, multiple NFTs could, in theory, point to a single asset. In this respect ERC-721 tokens are different from cryptocurrencies and other tokens like stable-coins in that their value is often contingent on their accurate and ongoing association with assets outside of the blockchain on which they are traded. Further complicating matters, it is often unclear if and how NFTs confer ownership of digital assets with respect to legislative or common law. NFTs rarely include any information relating to licencing or rights transfer, and high-profile NFTs such as Bored Ape Yacht Club appear to be governed by licencing terms held off-chain (Bored Ape Yacht Club). Finally, while it is possible to inscribe any kind of data, including audio, into an NFT, the ERC-721 standard and the underpinning blockchains were not designed to host multimedia content. At the time of writing, storing even a low-bandwidth stereo audio file on the ethereum network appears cost-prohibitive. This presents a challenge for how music NFTs distinguish themselves in a marketplace dominated by visual works. The following sections of this article are divided into what we consider to be the general use cases for NFTs within music in 2021. We’ve designated three overlapping cases: audience investment, music ownership, and audience and business services. Audience Investment Significant discourse around NFTs focusses on digital collectibles and artwork that are conceptually, but not functionally, unique. Huge amounts of money have changed hands for specific—often celebrity brand-led—creations, resulting in media cycles of hype and derision. The high value of these NFTs has been variously ascribed to their high novelty value, scarcity, the adoption of NFTs as speculative assets by investors, and the lack of regulatory oversight allowing for price inflation via practices such as wash-trading (Madeline; Das et al.; Cong et al.; Le Pennec, Fielder, and Ante; Fazil, Owfi, and Taesiri). We see here the initial traditional split of discourse around cultural activity within a new medium: dual narratives of utopianism and dystopianism. Regardless of the discursive frame, activity has grown steadily since stories reporting the failure of Blockchain to deliver on its hype began appearing in 2017 (Ellul). Early coverage around blockchain, music, and NFTs echoes this capacity to leverage artificial scarcity via the creation of unique digital assets (cf Heap; Tomaino). As NFTs have developed, this discourse has become more nuanced, arguing that creators are now able to exploit both ownership and abundance. However, for the most part, music NFTs have essentially adopted the form of digital artworks and collectibles in editions ranging from 1:1 or 1:1000+. Grimes’s February 2021 Mars NFT pointed to a 32-second rotating animation of a sword-wielding cherubim above the planet Mars, accompanied by a musical cue (Grimes). Mars sold 388 NFTs for a reported fixed price of $7.5k each, grossing $2,910,000 at time of minting. By contrast, electronic artists Steve Aoki and Don Diablo have both released 1:1 NFT editions that have been auctioned via Sotheby’s, Superrare, and Nifty Gateway. Interestingly, these works have been bundled with physical goods; Diablo’s Destination Hexagonia, which sold for 600 Eth or approximately US$1.2 million at the time of sale, proffered ownership of a bespoke one-hour film hosted online, along with “a unique hand-crafted box, which includes a hard drive that contains the only copy of the high-quality file of the film” (Diablo). Aoki’s Hairy was much less elaborate but still promised to provide the winner of the $888,888 auction with a copy of the 35-second video of a fur-covered face shaking in time to downbeat electronica as an Infinite Objects video print (Aoki). In the first half of 2021, similar projects from high-profile artists including Deadmau5, The Weekend, Snoop Dogg, Eminem, Blondie, and 3Lau have generated an extraordinary amount of money leading to a significant, and understandable, appetite from musicians wanting to engage in this marketplace. Many of these artists and the platforms that have enabled their sales have lauded the potential for NFTs to address an alleged poor remuneration of artists from streaming and/or bypassing “industry middlemen” (cf. Sounds.xyz); the millions of dollars generated by sales of these NFTs presents a compelling case for exploring these new markets irrespective of risk and volatility. However, other artists have expressed reservations and/or received pushback on entry into the NFT marketplace due to concerns over the environmental impact of NFTs; volatility; and a perception of NFT markets as Ponzi schemes (Poleg), insecure (Goodin), exploitative (Purtill), or scammy (Dash). As of late 2021, increased reportage began to highlight unauthorised or fraudulent NFT minting (cf. TFL; Stephen), including in music (Newstead). However, the number of contested NFTs remains marginal in comparison to the volume of exchange that occurs in the space daily. OpenSea alone oversaw over US$2.5 billion worth of transactions per month. For the most part, online NFT marketplaces like OpenSea and Solanart oversee the exchange of products on terms not dissimilar to other large online retailers; the space is still resolutely emergent and there is much debate about what products, including recently delisted pro-Nazi and Alt-Right-related NFTs, are socially and commercially acceptable (cf. Pearson; Redman). Further, there are signs this trend may impact on both the willingness and capacity of rightsholders to engage with NFTs, particularly where official offerings are competing with extant fraudulent or illegitimate ones. Despite this, at the time of writing the NFT market as a whole does not appear prone to this type of obstruction. What remains complicated is the contested relationship between NFTs, copyrights, and ownership of the assets they represent. This is further complicated by tension between the claims of blockchain’s independence from existing regulatory structures, and the actual legal recourse available to music rights holders. Music Rights and Ownership Baym et al. note that addressing the problems of rights management and metadata is one of the important discussions around music convened by early blockchain projects. While they posit that “our point is not whether blockchain can or can’t fix the problems the music industries face” (403), for some professionals, the blockchain’s promise of eliminating the need for trust seemed to provide an ideal solution to a widely acknowledged business-to-business problem: one of poor metadata leading