These are the so-called waves of the time non-fungal token (NFT) – inside Token Portuguese, which is not fungible, but do you know what it is and what it is used for? And what are the associated risks and benefits? If you don’t know, I’ll explain it a bit here, and how it relates to the “metaverse”, as well as what it is legally.
First of all, it should be noted that NFT is a digital representation of something that can be tangible or intangible (whether we can touch it or not), but as the name suggests, it is unique and cannot be replaced by another.
Because it is a digital representation of something, it is possible to divide it into tens, thousands, or millions of parts. It could be a digital representation of a painting by Pablo Picasso, as it could be The original lyrics of a song by the band Mamonas Assassinas or an animation, a photograph or parts of such works, as well as parts of the rights contained therein (rights attached to or received from such works).
It can also be a completely digital art, stored inside a digital wallet, and valued by the owner or published on his website or anywhere else he wants, as in the image below. NFTs I call it my little pony, that is, the economic rights are mine, but not the copyright. Economic rights are the right to use the image, and the moral right is the right to say that the creator of the work was the creator at any time.
Since they are irreplaceable, things are, say, “collectible,” and because they are collectible, they have value for money, so they can be resold, rented, exchanged, and donated.
But how do they become fungible?
Tokens are digital representations that are linked within the blockchain chain, that is, they are a kind of cryptocurrency. There are several strings block chainsuch as Ethereum, Tezos, Chain, and many others that can be used to create an NFT. That’s all there is to it Ethereum.
How does creating an NFT work?
Everything is encrypted. In a very simplified way, when a non-fungible token is created, it gets a code inside the used blockchain string, for example 0000232323. Required, the next block in the string (must be something that follows and does not). One NFT) will be 0000232324, and the other will be 0000232325, etc., which prevents any kind of fraud, as it is impossible to put something before or after. And this token contains data about what was purchased: the name of the creator, the date of creation, the name of the work, the value, and other information that the creator has included in the token.
Problems with NFTs
Like almost everything created and developed through the Blockchain network, NFT is not regulated or overseen by any entities or governments. The user buys and uses it at his own risk. It is quite speculative because price and value can change without any logical or rational criteria.
I created NFT below and it is on sale for $ 20. Called love dogs. But I can charge a million dollars. If someone buys it? Is there a problem? None. I put in the price I want and if someone buys it, it’s better for me, but once it’s sold I can’t use it anymore and I can’t create another one that is the same or similar.
Many people buy these digital assets as a high-risk investment, spending money if they appreciate that asset that can be “completely fraudulent” but can also be a “major move”.
An example was the representation of the first tweet posted by Twitter creator Jack Dorsey, which sold for $ 2.9 million and is now offering $ 40 million, but didn’t even reach $ 10,000 in the offer.
Another type of NFT is weapons and other goods purchased in online games. It is possible to buy various equipment to improve the performance of the player or team in electronic games, and if necessary, they can be sold to anyone in the future. Hardly anyone remembers it, but there was a case in the game Second Life where the avatar was sold for millions of dollars. Many people play for more than 20 hours in a row to value and sell the avatar.
Recently, the game F1 DeltaTime, Based on NFTs, it suddenly took off, leaving a lot of people who bought a car, driver, tires, and so on. in hand, because the items purchased are no longer available cannot be sold or reused.
Let it be clear: they are speculative products. Its creator or owner can put it up for sale at any price. In addition, there are risks associated with its creation, such as famous works of art or well-known products, as well as characters that cannot be used without the permission of the owner of the rights to create an NFT.
This means that I can’t create an NFT from a Nike collection, for example, with all the Michael Jordan shoes and put it up for sale. I do not have permission to use the industrial design of sneakers and I do not have permission to use the Nike brand or the Michael Jordan brand, for example.
I can’t create one either. Neymarren NFT he played wearing different jerseys of football teams, because there are two rights involved. Neymar’s identity rights, protected by Articles 11 and 12 of the Civil Code. And in the market of football teams, art. From 130 Industrial Property Act specifies that the license may only be used by the trademark holder. That is, it is possible to create these NFTs, but only with permission.
However, I may develop an NFT of a copyrighted work of art, protected while the author is alive, and for a further 70 years from the date of January 1 of the year following the death of the creator, art. From 41 Copyright Law. So a painting by Van Gogh, a sculpture by Aleijadinho or something Mona LisaIt could become NFT, but then it’s about knowing who would want to buy it.
What if Nike buys an NFT that does not allow its brand to be used, and the company files a lawsuit to ban all such digital representations of its products from being re-marketed and removed from trading platforms? It is difficult to destroy these products because they can be stored anywhere, but you will not be able to sell them in the future, or if you do, there is a risk of fines or damages. Is it worth the risk? Probably not.
Now, if I buy an NFT of a digital artwork with the permission of the creator, I’m sure this work is mine and there is no risk of it having to be taken out of circulation, and if I sell it I won’t. I run the risk of having to compensate the buyer for selling an unlicensed work. Before buying an NFT, check all the risks involved and whether the investment is worthwhile. If it’s valid, “send the bullet”!
Rofis Elias Filhocolumnist TecMundo, is a geek and lawyer who has been passionate about technology since childhood. He was the first to have access to the Internet at home in 1994, specializing in Computer Law in Brazil and Portugal. He is currently a lecturer in the same subject at various institutions, having been the executive coordinator of the ESA / SP postgraduate course. He is a partner at Elias Filho Advogados, which works for several Brazilian and foreign technology companies. Follow us on social media for more tips: @eliasfilhoadv.