“NFTs, these new tools that are ushering in a virtual revolution”

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 tools will shake up our society, even if they are not yet part of the daily life of the general public.

Laure-Alice Bouvier is a doctor of law and a lawyer at the Paris Bar.

Whether you’re generation “X”, “millenial”, “xennial” or even “baby boomer”, you certainly remember the time when unique or almost unique copies of collectibles were sold for very high prices: limited edition sports shoes, one – of Barbie dolls, Funko Pops (these dolls that are not allowed out of the package!), but also melon labels (whose lovers call themselves cucurbitacistes), eggshells (passion of ologists) and other objects that apparently are of no interest to the uninitiated .

Today that’s all over…or almost. “Modern” collectors are no longer looking for Pokémon cards or other stamps, but for digital objects, especially digital files. And even collectors of artworks slip into this virtual world we now call digital art or “crypto art”.

Artificial intelligence obliges, intangible objects of all kinds are fashionable and virtual collectibles, both the most serious and the most crazy, nestling in the most unexpected corners of our society or even of our imagination. They are called NFTs, ie “non-exchangeable tokens“, in French from “non-fungible tokens”, that is, objects whose value is inestimable and thus theoretically not transferable on a market.

The original purpose was to protect digitized artworks that were available to the public on the Internet and that could cause plagiarism. Whether these works are virtual or tangible, they are now, whatever one may say, considered a commodity that can be bought or sold in a market. In other words… they are integrated into economic circuits like any other product. They are rare and unique collectibles with a certificate of authenticity and ownership. This is how this virtual art whose presence is growing day by day is attracting more and more investors, if not speculators looking for big profits.

However, as we have understood, the concept of NFT seems to have lost its original meaning when the objects (artistic or not) it denotes have become perfectly replaceable, that is, exchangeable on a market for a commodity of equivalent economic value. regardless of whether an amount of currency or other tangible or intangible good.

For this reason it would therefore be relevant to stop using this qualification which corresponds to a reality which in fact has never been able to impose itself because it is based on an old misunderstanding, that of the artist and his work in the afterlife the contingencies of money and all forms of commodities. It would actually be more accurate to speak of protected fungible token (PFT) or why not? legal artifact binding (LABORATORY).

From the purchase of monkey portraits at the Bored Ape Yacht Club, and as the seller indicates, the buyer of a portrait will then have access to the club membership.

Laure Alice Bouvier

Although NFTs are already very popular, they are not yet part of the everyday life of the general public. The fact remains that they are everywhere these days and it is sometimes surprising that thousands of internet users are willing to buy these digital objects for very high prices, while they may not seem interesting to mere mortals.

For example, the first object to receive 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 buy portraits of monkeys from the Bored Ape Yacht Club, all similar in terms of 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 will then have access to club membership “whose benefits and offers increase over time”. The monkey is an identifier to open digital doors.

Note that some of these NFTs are traded for significant amounts 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,” brought in nearly $69.3 million at Christie’s in 2021.

Ghozali Everyday is certainly the source of one of the most surprising NFTs. This is an Indonesian who put 1000 selfies of himself for sale on the OpenSea platform and who managed to raise more than a million dollars. These selfies were taken by him from 2017 to 2021, that is, from the age of 18 to 22.

Such enthusiasm for NFT markets without any real substance may come as a surprise. The fact remains that fortunes are made and broken in exchanges between Internet users, some passionate about the novelty of the device, others interested only in possible profits that can be significant 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 dealing with a complex phenomenon that is both the sign and product of a change in the model of society.. It is therefore necessary to better identify it, to understand how it works, not only to give it a framework to prevent abuse, but also to appropriate the keys to evolve in the new space it occupies.

Let’s not forget that the device was first practiced without worrying about defining it exactly. It is only since 2017 that a serious concern for conceptualization has emerged. It must be said that the NFT market represents increasingly colossal amounts. Such a space of commercial exchanges correlated with blockchains, of which we know the benefits but also the risks, could not remain without definition and without a minimum of standardization. However, more needs to be done in this direction.

Further, especially as NFTs are at the crossroads of an unexpected revolution. For example, to date there is no tax system that is perfectly adapted to these new products, which entails a high risk of lawsuits. While it seems logical at first glance to link NFTs to the tax regime for digital assets, there is nothing optimal given the complexity of the situation. What about the application of the tax regime for works of art to NFTs, for example? It is difficult to decide because the legal definition of these works remains vague in terms of digital goods. The question may also arise whether it is decided to consider that NFTs are intangible movable goods and, for example, active cryptos similar to cryptocurrencies. But are NFTs really cryptocurrencies? Again, nothing is less certain.

The problem also arises in the field of intellectual property. Indeed, the texts on the NFT are still incomplete, especially on the transfer of moral and economic rights to 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 (Edition) of NFT is particularly energy-intensive and therefore likely to be very expensive. Attention should be paid to development projects that tend to set up “green” blockchains, such as Wax or The Merge, which should make it possible to reduce the energy costs of NFTs.

NFTs are entering a new phase in the virtual revolution.

Laure Alice Bouvier

Finally, the place that the criminal issue occupies is far from negligible. In addition to the issues related to NFT thefts that have made headlines in recent months, another concern crops up. Until now, we knew well about rape, assault and other sexual abuse”in real life“. From now on, the danger is everywhere, including in our living room: in the metaversesthese seemingly harmless virtual universes, young women (or men!) today reveal attacks that can be very traumatic.

However, the law is still hesitant. For example, if there is no flesh and blood body but an avatar, can we speak of rape within the meaning of the criminal code? Currently this is not the case. We are more in a form of psychological violence, a concept that is again very vague, but whose immersion sometimes pushed to the limit for victims wearing virtual reality helmets urgently requires more protection for both the youngest and the younger. Let’s also not forget that the increasingly blurred line between real and virtual is likely to lead to increasingly violent acts that are increasingly difficult to comprehend.

NFTs are entering a new phase in the virtual revolution. He is probably spoken of for better or for worse. Unless he collapses on his own, victim of an extreme void.

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