NFT, A New Crypto Trend For Digital Arts

NFT, A New Crypto Trend For Digital Arts

Anna Zhilyaeva (aka AnnaDreamBrush) is an immersive artist who performs virtual reality arts. In addition to her worldwide live performances and mixed reality videos, she has sold her first NFT for USD 20,000 on January 18, 2021 on MakersPlace. She is one of those people selling NFTs attached to their digital works. Nyan Cat, an animation uploaded on April 2, 2011, was sold for 300.00 ETH (approximately USD 590,000). Twitter CEO Jack Dorsey’s first tweet was sold for USD 2.9 million on March 22, 2021 at an auction. An NFT by digital artist Beeple was recently sold for USD 69 million at the Christie’s auction. These are high numbers of NFTs sold. This emerging technology – NFTs – has brought changes to the art and collection world.

What is NFT?

NFTs are non-fungible tokens based on Ethereum, powered by smart contracts. Non-fungible means it is unique and one of a kind. It can also be understood as a proof of ownership and authenticity. Ethereum is an open source and decentralized software platform, and it is also the technology behind the cryptocurrency ether (ETH).

There are various platforms for NFT marketplace, such as Nifty Gateway, OpenSea, SuperRare and NBA Top Shot (for sports digital collectibles).

What does NFT mean for artist, collectors and the market?

Traditionally, artists would sell the physical copy of their painting, but this business model is not as suitable for digital artworks as physical artworks. Some artists were posting their artwork online for free, or unable to sell their digital work, because there was significant difficulties in stopping others from duplicating the digital work or authenticating the owner of the original copy when there is no physical copy. With NFTs and increasing amount of marketplaces for digital works, artists might be able to finally make money with their works.

This Time article written by Andrew R. Chow also mentioned that NFTs seemed to encourage and applaud more creative and innovative forms of artworks - “[m]any other artists working in groundbreaking and sometimes controversial styles are also receiving unprecedented interest from NFT collectors. Art with whirling 3-D renderings, street-style oversaturated color schemes, and hyper-referential (and often crass) cartoons are thriving.”

For collectors and the digital art market, NFT is a proof that the person is the owner of the original copy. Collectors might be paying more for “digital artists’ labor-in-part” or appreciation of digital arts than just for the money in this crypto art movement.

Concerns about NFTs?

Ioanna Lapatoura has discussed copyright ownership with respect to NFTs in her recent article on The IPKat. NFT ownership is different from copyright ownership or a proprietary right over an actual asset. NFT is the “proof of owning an unique digital version of an asset, rather than the asset itself”. There is also new type of alleged infringement – copied artwork without permission for sale. Since NFTs are still new and developing, there is likely to be difficulties in enforcing intellectual property rights.

What’s in the Future of NFTs?

Some people view NFTs as buying collectable cards and were bidding on the virtual future. Some people were skeptical and worrying that the NFT bubble might burst. Nonetheless, NFTs are providing creators of digital works a way to monetize their work product and receive real returns for their virtual work. Since NFTs are based on the Ethereum blockchain, maybe the other question that we ought to ask is – what is Ethereum and ETH’s long term growth potential?

Written by Ya-En Cheng, JD Candidate 2022, enrolled in Professor D'Agostino's Directed Reading: IP Innovation Clinic course at Osgoode Hall Law School. As part of the course requirements, students were asked to write a blog on a topic of their choice.