Wednesday, 26 May 2021

Are NFTs making possible a new form of theft?

How NFTs made plagiarism a business: The recent boom in NFTs — the unique digital vehicles that enable users to tokenize real world assets and are causing a ruckus in the art world — has been accompanied by another less welcome boom: Intellectual property theft. Since an NFT is non-duplicable, the process of trading them does not require an auction house or an authenticator as an intermediary. Nor, apparently, does it require the consent of the artist whose work is being digitally reproduced, which has led more and more artists to speak out about the content of their work being hijacked, digitized, and traded as an NFT without their knowledge, the Guardian writes.

How are artworks being stolen? A number of platforms allow you to easily tokenize images, websites and practically anything you can find online. Marblecards are a type of NFT that have been likened to “baseball cards for websites,” where users can turn urls into unique tradable cards, while Tokenized Tweets allows you to “archive your favorite social media memories as digital collectibles,” with an NFT of the first tweet ever written selling for as much as USD 2.9 mn.

From your favourite social media posts, to the best moments from the NBA, everything is seemingly tokenizable. This may not be a huge issue for someone whose tweets are being commodified, but it becomes particularly problematic for artists, particularly those producing digital art, whose livelihoods are dependent on being compensated for the media they are putting online. By reproducing their work as NFTs, traders are depriving this content’s creators of the right to decide how their work is used, and making financial gains off of trading these digital shadows of existing media.

Artists have been speaking out: Swedish illustrator Simon Stålenhag took to Twitter to decry the tokenization of his work into an NFT, while some who purchased crypto art were outraged to discover that the sellers were not the original creators of the media. Some artists are encouraging fellows to file copyright claims, while others have stood by scratching their heads at finding tokenized versions of their artworks for sale online without their consent. It’s still unclear where NFTs of artworks stand with regards to intellectual property law, and with regards to the terms and conditions of platforms they poach from (Twitter for example, prohibits the permanent archiving of tweets, but it is unclear whether, and how, this could apply to NFTs).

The sidelining of artists represents a real blow to their earning potential: The value of crypto art traded over the past year has soared from the mere thousands in mid 2020, to USD 12 mn in January 2021, to nearly USD 90 mn last month.

And the environmental cost of crypto-art is putting some creators off: Similar to the massive energy requirements of cryptocurrency mining (Bitcoin mining alone is estimated to generate around 37 mn tonnes of CO2 annually) the creation of NFTs is extremely energy intensive. Critics worry that the increasing popularity of NFTs will significantly up the carbon footprint of the art world. For perspective, one artist writes that her release of six relatively small crypto artworks in about 10 seconds consumed more electricity than their entire physical studio over the course of two years.

But some artists are working with the NFT format to enhance the value of their work: Christie’s made waves last week with their sale of a digital collage — along with an NFT to guarantee authenticity — by an artist known as Beeple for a whopping USD 69.6 mn, marking the first time a major auction house has sold a digital artwork, and making this the third highest price paid for an auctioned artwork by a living artist. In a surreal twist of events, an original artwork by Banksy was burned and destroyed, in order to drive up the price of its tokenized doppelganger which is now the only version of its physical referent in existence. The piece sold for USD 380k.

The art world is not the exclusive arena where NFTs can be useful, but it is the main area where their use is becoming problematic. Other popular uses in gaming and software licensing do not present the same issues, since the item being sold as an NFT is the thing of value itself (the upgrade in a game or the computer program for example) and not a mirror or a copy of something that exists and has value elsewhere. Whether NFT’s are a short-lived trend in the artworld, or a paradigm shift for curators and collectors, they are opening up a new frontier for intellectual property theft. If they persist, we can expect to be presented with complex questions as to who really “owns” an artwork in an era where a digital item’s blockchain is more a marker of its authenticity than the testimony of the artist who created it.

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