Non-Fungible Tokens (NFTs) are one of the most important topics in the crypto world. Some NFTs have been sold for millions of dollars.
Despite the burgeoning size of this market, there is still a lot of debate around NFTs and their value. A big part of this is whether they can be replicated. This can be a complicated concept at first but keep reading to learn everything you need to know to be able to answer this question correctly.
What is an NFT?
The first thing that we need to understand is what an NFT is. Though this might seem like a fundamental question, it is something that is consistently misunderstood. In theory, anything can be turned into an NFT. You can make an NFT of your house or your favorite pair of shoes. Heck, some of the most popular NFTs are games, digital flowers, memes, and music.
But, to keep things simple, let’s focus on an NFT of an image. Assuming you buy the NFT, you will be purchasing the right to own that particular piece of art. The proof of this transaction will be stored in the blockchain. While this sounds simple, there is a bit more to unpack in this story.
Anyone Can Copy NFT Art
One of the biggest controversies in the world of NFTs is how easy it is to copy NFT artwork. Though Beeple sold an NFT for $69 million, anyone with a computer and internet can access it and copy it. Copying the NFT artwork is relatively easy as you just need to take a screenshot. Even easier, you can right-click and copy it onto your computer. There is no need to pay a single cent. Of course, you won’t have an optimal resolution but you get the point.
However, this doesn’t mean that you own the image. Only the person who purchased the artwork at auction does.
This is where many people can get confused. Think of NFTs like a piece of physical art. You can purchase life-like replicas of the Mona Lisa. Yet, unlike hand-painted artwork, though, there are no subtle differences to tell the two apart. The NFT artwork will be identical, down to the pixel level.
You Can’t Copy the Blockchain
NFTs are embedded on the blockchain, the same technology that Bitcoin uses. However, the most widely used crypto and decentralized finance system used in the NFT space is Etheruem. This is how the true owner of the image can be verified.
The blockchain is a complex chain of transactions; it stretches back to when the artist placed the NFT on the market after minting it and shows all the times it has changed hands from owner to owner. This digital ledger is then split between every machine in the network.
Think of the blockchain as a digital title deed. This ledger is constantly being updated and checked by every computer on the network. As a result, it is difficult to steal the ownership rights of an NFT.
I should also mention that NFTs can be stored on online wallets, in fact, a digital wallet can be used to purchase, sell and mint NFTs. We go into way more detail on wallets in this article:
Even when an identical NFT is released onto the market, it will have a slightly different address. Though the artworks are identical, the two won’t be interchangeable.
Multiple NFTs Can Be Released of the Same Image
To make things even more complicated, multiple NFTs can be officially released of the same image as a series, depending on the artist’s intention. However, each of these will have a unique place on the blockchain. This is what makes them original and impossible to replicate fully.
In this case, it’s best to think of these as signed copies of a book. Though each novel is the same, and all have been signed by the same author, they are all slightly different. They are all unique copies.
Sometimes NFT artists will release a limited series of artwork, like 25 of the same exact image, or other times you will find a timed-release where an artist will release the same image for say 60 minutes and the number of images released onto the market depends on how many buyers made the purchase in 60 minutes.
Copyright Remains With the Artist
Ultimately, the ownership of the image will rest with whoever has the copyright. In this case, the world of NFTs will operate in a similar way to the real world.
In most cases, the copyright will remain with the original artist. For an example of how this relates to the world of NFTs, let’s look at the NBA Topshots. These are NFTs made of famous sporting moments.
Just because you purchased one of these NFTs does not mean you own the copyright for that clip. That remains with the NBA.
As a result, you won’t be able to commercialize it, like turning it into T-shirts. If you do, the NBA will have the legal right to sue, a case they would easily win. Though the rules for other NFTs aren’t as explicitly laid out, the same principles apply. The original artist, not the owner of the NFT, has the copyright.
To better understand NFTs and copyright you can check out this article:
The only exception to this rule is when the agreement between the creator of the NFT and the buyer stipulates that the buyer will receive the full copyright. However, in most cases, this won’t be the case.
The original artist of the image is also recorded through the blockchain. When someone uploads an NFT, it is known as minting. This is permanently included in the ledger and can’t be changed. If you are intending to create and mint your own NFTs these articles are a great place to start so that you can better understand the minting process and costs involved:
- How Much Does It Cost to Mint an NFT?
- How To Mint an NFT for Free | Rarible Style
- NFT Gas Fees & How Not to Get Ripped Off
It’s Illegal to Mint NFTs of Copyrighted Materials
At present, there are no requirements in place to verify the original artist is the person who uploaded the NFT. This has led to a rush of people copy-pasting images, passing them off as their own, and making NFTs for these images. This practice has proved to be widespread and lucrative.
Clearly, this process is illegal, even in things like Tweets, which have been publicly released. Owners of the copyright can work through the DCMA to try to get these NFTs removed. But this isn’t easy. A lot of these sites are unregulated, making it difficult for authorities to remove the NFT. The NFTs themselves will need to be burned. This will permanently scrub them from the blockchain.
It should be noted that you don’t need to make an exact copy of the artwork to start to run into legal problems. Copying someone’s likeness can also be a violation of copyright law. A famous example of this is the “Hope” posters that were popularized during the Obama presidency.
The Owner of the NFT Can’t Sue Over Copying
NFTs are still relatively new. As a result, there hasn’t been a lot of legal challenges involving them. This makes it difficult to predict how the courts will view them. It’s most likely, though, that they will be considered in a similar way to a piece of art.
In this case, the person who purchased the NFT will likely have little say over the way it is used. The artist has the copyright. The owner of the NFT does not have the right to sue people for copying and using the image; only the artist can do this.
For example, let’s imagine an NFT being made of an artwork that is in the public domain. These are images that have gone out of copyright. You might be able to buy the NFT and verify that you are the legitimate owner. But as they are public domain, anyone will be able to copy, download, and reproduce the image legally.
Another complication is that, even if the owner of the NFT did have the copyright and wish to enforce it, this can be very difficult. In reality, ending the distribution of an NFT would be close to impossible. A good analogy is the online piracy of movies. Though this is expressly illegal, it continues to be a widespread issue.
Copying an NFT is a complex business. In many cases, copying the artwork is easy; you just need to take a screenshot, and you have an exact copy. But replicating the token itself is almost impossible, as it is stored on the blockchain. Even if you own the NFT, you often don’t own any rights to the image. They will lie with the artist. As long as you remember these basic principles, the world of ownership and NFTs should be a lot clearer.
To make NFTs even clearer we suggest this easy to read articles: