FIGAROVOX / STAND – The growing success of NFTs tends to redefine our relationship with the market and with collectibles, says Laure-Alice Bouvier. For the lawyer, these digital assets will shake our society, even if they are not yet part of the daily life of the general public.
Laure-Alice Bouvier is a lawyer and a lawyer at the Paris Bar. She is also the author of an upcoming book on NFTs.
Whether you are generation “X”, “millennial”, “xennial” or even “baby-boomer”, you will surely remember the time when unique or almost unique copies of collectibles sold at very high prices: limited edition sports shoes , an -off Barbie, Funko Pops (these dolls that don’t have to be unpacked!), but also melon labels (whose lovers are called cucurbitacistes), eggshells (passion of the ologists) and other apparently of no interest in the uninitiated.
Today it’s all over … or almost. “Modern” collectors are no longer looking for Pokémon cards or other stamps but digital objects, more precisely digital files. And art collectors are also slipping into this virtual world that we now call digital art or “cryptoart”.
Artificial intelligence obliges, intangible objects of all kinds are fashionable and virtual collectibles, both the most serious and the most extravagant, lurk in the most unexpected corners of our society or even our imagination. They are called NFT, that is “non-fungible tokens“, In French for“ non-fungible tokens ”, or objects whose value is inestimable and therefore theoretically not transferable to a market.
The original goal was to protect digitized works of art made publicly available on the Internet and susceptible to plagiarism. Now, whether they are virtual or material works, now, whatever one may say, they are regarded as an asset that can be bought or sold on the market. In other words … they are integrated into economic circuits like any other commodity. They are rare and unique collectibles that have a certificate of authenticity and ownership. This is how this virtual art whose presence is growing day by day interests more and more investors if not speculators looking for big profits.
As we have understood, however, the concept of NFT seems to have lost its initial meaning when the objects (artistic and otherwise) that it designates have become perfectly fungible, i.e. exchangeable on a market for a commodity of equivalent economic value, either a quantity of currency or other tangible or intangible asset.
For this reason, it would therefore be appropriate to stop using this qualifier which corresponds to a reality that, in fact, has never been able to impose itself because it is based on an ancient misunderstanding, that of the artist and his work in the afterlife, the contingencies of money and all the forms of commodification. Actually it would be more correct to talk about it protected fungible token (PFT) or why not legal artifact constraint (LABORATORY).
From purchasing monkey portraits at the Bored Ape Yacht Club, and as the seller indicates, a portrait buyer then has access as a member of the club.
Laure Alice Bouvier
Although NFTs are already very popular, they are not yet part of the daily life of the general public. The fact remains that they are everywhere today and it is sometimes surprising that thousands of Internet users are ready to buy these digital items at very high prices when they may seem of no interest to mere mortals.
For example, the first item to have an NFT certificate of ownership and authenticity was artist Kevin McCoy’s 2014 artwork “Quantum,” which was auctioned in June 2021 for $ 1.5 million. dollars.
You can also purchase monkey portraits at the Bored Ape Yacht Club, all similar in the structure of their faces, but unique in terms of facial expressions or colors. From this purchase, and as indicated by the seller, the buyer of a portrait then has access to membership in a club “Whose advantages and offers increase over time”. The monkey is an identifier for opening digital doors.
Note that some of these NFTs are traded for sizeable sums through auctions that take place on platforms ad hoc. For example, a work by American crypto artist Mike Winkelmann (aka Beeple), “Everydays: the First 5,000 Days,” fetched nearly $ 69.3 million at Christie’s in 2021.
Ghozali Everyday is definitely the source of one of the most amazing NFTs. It is an Indonesian who has offered 1000 selfies of himself for sale on the OpenSea platform and who has managed to raise more than a million dollars. These selfies were taken by him from 2017 to 2021, or from 18 to 22 years old.
Such enthusiasm for NFT markets without any real substance can come as a surprise. The fact remains that fortunes are made and broken on exchanges between Internet users, some passionate about the novelty of the device, others interested only in possible gains that can be substantial and almost instantaneous.
NFTs are at the crossroads of an unexpected revolution.
Laure Alice Bouvier
Be that as it may, it is time to realize that we are in the presence of a complex phenomenon that is both the sign and the product of a change in the model of society.. It is therefore necessary to identify it better, to understand how it works, not only to give it a framework to avoid abuse, but also to appropriate the keys to evolve in the new space it occupies. .
Let us remember that the device was first put into practice without bothering to define it precisely. It is only since 2017 that a serious concern with conceptualization has emerged. It must be said that the NFT market represents increasingly colossal sums. Such a space for commercial exchanges related to blockchains, of which we know the advantages but also the risks, could not remain without definition and without a minimum of standardization. However, more needs to be done in this direction.
Also, especially since NFTs are at the crossroads of an unexpected revolution. For example, to date there is no perfectly adequate taxation for these new products, which generates a high risk of litigation. While it may seem logical at first glance to attach NFTs to the digital asset tax regime, there is nothing optimal, however, given the complexity of the situation. For example, what about applying the tax regime for works of art to NFTs? It is difficult to decide as the legal definition of these works remains vague in terms of digital assets. The question could also arise if it were decided to consider that NFTs are intangible movable assets and, for example, active cryptocurrencies comparable to cryptocurrencies. But are NFTs really cryptocurrencies? Again, nothing is less certain.
The problem also arises in the field of intellectual property. In fact, the texts concerning the NFT still remain incomplete, in particular as regards the transfer of the moral and economic rights of the work, and consequently generators of uncertainties and risks.
In these times of concern about the energy crisis, the same is true in the ecological field. Creation (circulation) of NFT is particularly energy-intensive and therefore is likely to be very expensive. Attention should be paid to development projects aimed at creating “green” blockchains such as Wax or The Merge, which should make it possible to lower the energy cost of NFTs.
With NFTs, a new phase of the virtual revolution is underway.
Laure Alice Bouvier
Finally, the place occupied by the criminal question is far from negligible. In addition to the NFT theft issues that have been making headlines in recent months, another concern is emerging. Until now we knew very well about rape, assaults and other sexual abuse “in real life“. From now on, danger is everywhere, even in our living room: in the metaversithese seemingly harmless virtual universes, young women (or men!) today reveal attacks that can be highly traumatic.
However, the law is still hesitant. For example, when there is not a body in flesh and blood but an avatar, can we speak of rape under the penal code? Currently, this is not the case. We are more in a form of psychological violence, a concept once again very vague, but whose immersion sometimes pushed to the extreme for victims wearing virtual reality helmets urgently requires greater protection for the little ones as well as for the very young. . Let us not forget that the increasingly tenuous border between real and virtual risks leading to increasingly violent and increasingly difficult to contain acts.
With NFTs, a new phase of the virtual revolution is underway. It is likely to be talked about for better or for worse. Unless it collapses in on itself, a victim of extreme emptiness.