The Emperor's New Tokens?
An exploration of the legal nature of NFTs for digital art
Non-functional tokens (or 'NFTs') are a blockchain-based mechanism for uniquely identifying digital assets, and verifying both authenticity and ownership. An increasingly popular use case for NFTs (albeit it is only one of several use cases) involves the creation and sale of digital art. Notwithstanding that the NFT marketplace for digital art is dynamic and growing (with some NFTs selling at auction for vast sums), the legal basis of NFTs and, critically, the nature of what a purchaser actually acquires when purchasing an NFT artwork, are not universally understood. We explore these issues in this episode, which concerns the purchase of an NFT image for commercial use.
- A useful introduction to NFTs, together with links for further reading, can be found on the Ethereum website here: https://ethereum.org/en/nft/.
- An entertaining explanation of the phenomenon of digital art NFTs can be found here: https://www.theverge.com/22310188/nft-explainer-what-is-blockchain-crypto-art-faq.
- For those who want to dig into the detail, the most commonly used technical standard for NFTs is currently ERC-721, which is explained here: https://ethereum.org/en/developers/docs/standards/tokens/erc-721/.