I have been observing the NFT market for some time, to see how something not sanctioned by law (intellectual property is NOT certified by an NFT) is being protected from fraud, and from what I see the rottenness of something is starting to emerge. that it was sold for something it is not.
Imagine you are buying a painting. And imagine you're asking yourself some questions about its authenticity. After all you are just buying a Rembrandt for 13.99 €, what could possibly go wrong? Then you ask if it is authentic, and they tell you: look, above is the immutable digital certificate.
Fuck, there's the immutable digital certificate. And its perfect checksum system, if verified, is just that of that framework. Damn. So you buy it, right?
No. Because it happens that the owner is Ivo Balboni, a pensioner from Cesena, and that digital signature is, in fact, the equivalent of an autograph. Of course you have an autographed work, but if the autograph does not come from the author, I know that it is not possible to say that it is equivalent to proof of any authenticity and / or any intellectual property.
Let's take an example.
What happened? It happened that a certain David Revoy had started making cute kittens on the internet. And he sold them (that is, he sold the right to use them). So far so good.
What happened? It happened that David was not well versed in the world of NFTs. So someone who was in the know went to NFT his works and then sell them. And he made about 10K on it.
Now, here are two or three things to say about this scam.
- The law does NOT recognize ANY link or ANY certification of intellectual property, property in general, authenticity or consent to use to NFTs.
- If I make an illegal copy of a work, and sell it, I commit a crime. But the law does NOT see any relationship between the work and its NFT. So, this market is about selling a copy of something, without the NFT buying a copy.
- Who has the NFT must not be neither the master nor the creator. It is enough that in some way it is in possession of the digital asset and an NFT can do it. That's right: grab your copy of Windows and give it an NFT. Microsoft cannot oppose it, because it does not have the legal tools to do so.
But the problem is, by personalizing this David, I gave the impression that David has been scammed or robbed. This is only true if we truly believe that NFT represents any honest and legally recognized relationship between author and work. But this is not the case: NFT is nothing but the scribble "Lea & Tio 2021" that someone made with a marker on the tower of Pisa. It does not certify anything, it does not give any right to “Lea & Tio”, and it has nothing to do with the authors or builders of the tower.
It is just a cryptographic hash of which you certify the issue date by putting it on a blockchain, hoping that any judge will accept the blockchain instead of the notary, or that they simply understand what a blockchain is.
Under these conditions, what is the value of the words “Lea & Tio 2021” scribbled on the marble of the Tower of Pisa? Nobody.
Here, it's about the value of the NFTs on the kittens in question. Since the kittens are made with a Common license that ALLOWS them to be copied and made for commercial use (and this license is recognized by law), anyone can take the work of which "you bought the NFT for € 10,000" and do what he wants with it. Including selling it.
YOU HAVE NOT BOUGHT ANYTHING.
Then you ask yourself "hey, but how is it that all the newspapers talk about NFTs and finance that goes crazy and all?" . He talks about it for two reasons:
- some clever columnist is into the market, has broker friends with clients, and so he gave broker friends with clients an article with which to convince them to invest their retirement on this scam.
- under certain conditions, typical of Bank A doing business with Grande Bank B, it may be convenient to certify the issue of some digital security. But that's not your case.
So, the question will be: to what extent are NFTs a scam then?
Well, you have to understand one thing. Monopoly money is not fake money. It's fake money if I go into the supermarket and try to buy something out of it. Or if I try to give them as change to an old lady by passing them off as real. As long as I use it correctly (playing Monopoly), it is not "fake money" at all and the police cannot arrest me for buying us Schiphol airport.
The same goes for NFTs. As long as I specify that having an NFT on a Rembrandt is like buying Schiphol Airport in Monopoly, that is, something that is valid only and only in the universe of a game, then NFTs are not a scam.
The problem comes when you throw real money in it because:
- they convinced you that an NFT certifies your ownership of the thing.
- have convinced you that an NFT certifies the INTELLECTUAL ownership of the thing.
- they have convinced you that an NFT certifies any right to the thing.
- have convinced you that an NFT has any legal value.
In this case, you have just bought the Monopoly Schiphol Airport, paying for it with real money.
Maybe someone will say that those NFTs are paid in ETH, which are not real money: but let's forget that you bought ETH by paying real money. And that you expect to be able to exchange ETH for real money if you need to.
NFTs are not a scam as long as it is known that they legally represent nothing. They become so when the opposite is claimed to be true.
As for the monopoly money. You can buy Schiphol Airport from us, but only if it's a game. The Dutch authorities will NEVER recognize any property there.
The scam, that is, is not inherent in technology. You can easily print Monopoly money and sell Monopoly in your shop. The problem is if you sell it as a Real Estate system and claim to really own Macchu Picchu. Then it becomes a scam.
So there is no problem if you buy an NFT paying it in ETH, only if you bought the ETH with Monopoly money.
If you put some real money into it, and you did it because you believed that an NFT has any legal standing on the original work, well …
I think you just bought an NFT on the Colosseum.
I forgot: if you also want a kitten to sell as an NFT to some fool, you can go here:
Last question: but what do NFTs "technically" certify?
They certify that a certain guy had a digital copy on a certain date, and on that date he was the first to drop an NFT on it. Basically, you could go to xvideos.com, grab a porn video of your choice, download it, put an NFT on it, and sell it. This does not certify anything, except that no one else has had the same idea before.
They are not, therefore, the perfect solution to modern music copyright, the counterfeiting problem, the wine bottle problem or anything else.
I could take a music album that nobody remembers anything about, which I know is the only album by a 1985 Black Metal band, Exorcist. I could download it to Mp3 and make an NFT with it, and if the publishing house has forgotten it, as well as the authors have forgotten it and the public has forgotten it, or simply they have not done an NFT on it because they don't know what either, and then it would be valid and I could sell the NFT.
And so I could prove that I was the only one in 1985 who bought this record and still remembers it.