"Where there is no vision, the people perish: but he that keepeth the law, happy is he."
-- Proverbs 29:18, King James Bible (KJV)

Monday, July 05, 2021

Copyrights and Digital Tokens: NFTs (Non-Fungible Tokens, e.g. in Digital Art) and Fungible Tokens (e.g. Cryptocurrency)

Fungible and non-fungible "tokens" have emerged as new forms of digital assets first popularized by cryptocurrency (fungible, i.e. interchangeable tokens) and followed by non-interchangeable NFTs, Non-Fungible Tokens, e.g. in digital art.

As written at the BBC in What are NFTs and why are some worth millions?

"Digital tokens can be thought of as certificates of ownership for virtual or physical assets."

Cryptocurrency is controversial. "Caveat Emptor!" (Buyer Beware!).

As for the newly emergent NFTs (Non-Fungible Tokens), it is important to recognize that they are separate from copyrights. As explained at the Wikipedia:

 "A non-fungible token (NFT) is a unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore not interchangeable.[1] NFTs can be used to represent items such as photos, videos, audio, and other types of digital files.... NFTs are tracked on blockchains to provide the owner with a proof of ownership that is separate from copyright." ....

"The unique identity and ownership of an NFT is verifiable via the blockchain ledger. Ownership of the NFT is often associated with a license to use the underlying digital asset, but generally does not confer copyright to the buyer: some agreements only grant a license for personal, non-commercial use, while other licenses also allow commercial use of the underlying digital asset."

 Harrison Jordan at TechCrunch in "No, NFTs aren't copyrights", writes:

"[T]he reality of NFT ownership is much more complicated than one might imagine. As a new crypto asset class, NFTs appear to exist almost unbound by current regulatory systems. But when combined with art, there are overlaps to consider. Understanding the legal pitfalls of the contemporary NFT ecosystem is the first step in unlocking its potential....

The NFT purchaser owns nothing more than a unique hash on the blockchain with a transactional record and a hyperlink to the file of the artwork."

Digital tokens represent brave, new digital AND legal worlds and it probably behoves us all to keep informed about them.