NFTs, Decentralization, Enforcement of IP Rights
Buy the rumor, sell the news
I have been, like pretty much every other sentient being, thinking a lot about non-fungible tokens (NFTs) as of late.
NFTs present significant problems for those accustomed to dealing with centralized systems. Take, for example, the issue of intellectual property and ownership. Decrypt wrote recently about NFTs:
While trademark and copyright law provides a remedy for rip-offs, it’s likely to prove difficult for artists to find and sue an infringer, since blockchains, by their nature, are designed to be borderless and decentralized. This would explain why some upset by recent behavior on Binance’s network resorted to non-legal measures to express their displeasure—including posting images from the Tiananmen Square massacre on the company’s blockchain.
I don’t pretend to have an answer here, but when IP lawyers assure me that existing law provides an easy remedy to the issue of people stealing other people’s IP and NFTing it, I have to laugh, wryly.
When Shawn Fanning created Napster, RIAA was able to have its lawyer minions kill it, because it was a centralized repository of stolen IP. Kill the head and the body dies. This can’t be done with decentralized systems.
If an NFT can be created and put on a blockchain, attacking the infringer doesn’t do much good because the NFT is already out there, sitting on a blockchain, replicated multiple times, across many jurisdictions. Good luck getting a NFT removed from a blockchain just because some legal diktat requires that it be removed.
Aside from the NFT, you have the issue of the content to which the NFT is tied. If the NFT is hosted in a hot wallet, sure, you could probably identify the person who ultimately owns the wallet and get a court order requiring that any stolen content be removed from servers that the wallet owner/infringer controls. But what if that content has been shared via torrents to servers around the world?
As I say above: I don’t have answers to these questions. But I don’t see those who claim that IP laws have a solution to the issue of NFTs and copyright engaging seriously with this issue, either. And it is they from whom we ought to expect coherent answers. Technology, of course, moves much faster than do laws or lawyers. Maybe there is a resolution out there. I’ve no idea what it looks like, though, and facile claims that lawyers will adapt ring hollow.