“NFT, These New Tools Heralding a Virtual Revolution”

FIGAROVOX/TRIBUNE – The growing success of NFTs tends to redefine our relationship with the market and with collections, says Laure-Alice Bouvier. For the lawyer, these digital assets 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. She is also the author of a forthcoming book on NFTs.

Whether you are generation X, millennial, xennial, or even a baby-boomer, you probably remember the time when unique or near-unique copies of collections sold at very high prices: limited edition sports shoes , unique. barbie doll, Funko Pops (these little dolls that you absolutely must not take out of their packaging!)but also labels with melons (whose amateurs are called cucurbitacists), eggshells (a passion of specialists) and other objects, apparently, are of no interest to the unsuspecting.

Today, it’s all over… or almost. “Modern” collectors are no longer looking for Pokemon cards or other postage stamps, but for digital objects, more precisely digital files. And even art collectors are slipping into this virtual world that we now call digital art or “cryptoart.”

Artificial intelligence forces, intangible objects of all kinds are fashionable and virtual collectibles, the most serious and the strangest, take shelter in the most unexpected corners of our society or even our imagination. They are called NFT, ie.non-exchangeable tokens“, in French “non-exchangeable tokens”, that is, objects whose value is priceless and therefore theoretically cannot be transferred on the market.

The original intent was to protect digitized works of art publicly available online that could be plagiarized. Now, whether these works are virtual or material, they are now, in any case, considered a commodity that can be bought or sold in 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. So this virtual art, whose presence is growing day by day, interests more and more investors, not speculators in search of big profits.

As we have understood, the concept of NFT seems to have nevertheless lost its original meaning when the objects (artistic or not) it defines have become completely fungible, that is, exchangeable in a market for a commodity of equal economic value, regardless of whether an amount of currency or other tangible or intangible goods.

For this reason, it would be important to stop using this qualification that corresponds to a reality that, in fact, has never been able to be imposed because it is based on an old misunderstanding, that of the artist and his work in beyond contingencies of money and all forms of commodification. Actually it would be more accurate to speak replaceable protected land (PFT) or why not legal artifact binding (LAB).

By purchasing portraits of monkeys at the Bored Ape Yacht Club, and as the seller points out, the buyer of a portrait then has access to club membership.

Laure Alice Bouvier

While NFTs are already very popular, they are not yet part of everyday life for the general public. The fact remains that today they are everywhere and it is sometimes surprising that thousands of Internet users are ready to buy these digital objects for very high sums, when they may seem of no interest to ordinary mortals.

For example, the first object 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.

You can also buy monkey portraits at Bored Ape Yacht Club, all similar in terms of their facial structure 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 benefits and offerings increase over time”. The monkey is an identifier to open digital doors.

Note that some of these NFTs trade for significant amounts throughauctions 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 certainly the source of one of the most surprising NFTs. This is an Indonesian who offered for sale on the OpenSea platform 1000 of his selfies and managed to collect more than a million dollars. These selfies were taken by him from 2017 to 2021, in other words from the age of 18 to the age of 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 potential benefits that may be substantial and almost immediate.

NFTs are at the crossroads of an unexpected revolution.

Laure Alice Bouvier

In any case, it is time to understand that we are in the presence of a complex phenomenon, which is both a sign and a 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 abuses, but also to acquire the keys to evolve in the new space it occupies.

We recall that the device was first practiced without worrying about its exact definition. Only since 2017 has a serious concern for conceptualization emerged. It must be said that the NFT market represents increasingly colossal amounts. Such a space of commercial exchanges related to blockchains, of which we know the advantages but also the risks, could not remain undefined and without a minimum of standardization. However, more needs to be done in this direction.

Further, especially since NFTs are at the crossroads of a sudden revolution. For example, to date there is no tax that is perfectly adapted to these new products, which generates a high risk of litigation. Although it may seem logical at first glance to join NFTs in the tax regime for digital assets, there is nothing optimal, however, given the complexity of the situation. For example, what happens to the application for NFTs of the tax regime for works of art? It is difficult to decide as the legal definition of these works remains unclear as far as digital goods are concerned. The question may also arise if it is decided to consider that NFTs are intangible movable property and, for example, crypto-assets comparable to cryptocurrencies. But are NFTs really cryptocurrencies? Once again, nothing is less certain.

The problem also arises in the field of intellectual property. Indeed, the texts are still incomplete regarding the NFT, especially regarding the transfer of the moral and economic rights of the work, and thus the generators of uncertainties and risks.

In these troubling times regarding the energy crisis, the same applies in the ecological field. Create (Mintage) of NFT is particularly energy intensive and therefore likely to be very expensive. Attention should be paid to development projects that attempt to create “green” blocks such as Wax or The Merge, which should make it possible to reduce the energy cost of NFTs.

With NFTs, a new phase in the virtual revolution is underway.

Laure Alice Bouvier

Finally, the place occupied by the criminal case is by no means negligible. In addition to the issues related to NFT theft that have made headlines in recent months, another concern is emerging. Until now, we were well aware of rape, assault and other sexual abuse.”in real life“. From now on, danger is everywhere, including our living room: in the metaversethese seemingly harmless virtual universes, young women (or men!) today discover attacks that can be very traumatic.

Gold, the law is still in doubt. For example, when there is no body of flesh and blood, but an avatar, can we talk about 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 once again very vague, but the immersion of which is sometimes pushed to the extreme for victims wearing virtual reality helmets urgently calls for greater protection for both the younger and the younger. Let’s also not forget that the increasingly tenuous boundary between the real and the virtual is likely to lead to increasingly violent acts that are increasingly difficult to contain.

With NFTs, a new phase in the virtual revolution is underway. He is likely to be talked about for better or worse. Unless it collapses upon itself, a victim of extreme emptiness.

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