NFT: This mysterious acronym has been named Word of the Year 2021 by Collins Dictionary. Even translated, the initials remain difficult to understand for the vast majority. NFT as “non-fungible token”, non-fungible token in French. Unclear? Of course. Before we get back to that, a detour through the metaverse and cryptocurrencies with some simple definitions is in order.
“Metaverses are virtual worlds with their own economy, accessible to a large number of users at the same time and in an immersive way, especially thanks to appearances by avatars”, sums up M.e Leah Jacquemin. We immediately think of video games, of course, like Fortnite, which has millions of players in France.
“Metavers don’t escape bullying: physical persons hide behind avatars”
But metaverses aren’t limited to video games. “There are two types of metaverses, the lawyer specifies, those, like Fortnite or other games, whose universe or rules are diametrically opposed to the real world – you can kill in video games, without risking prison – and those that offer a duplicate reality world. This is the case of the Facebook project, which would allow a projection of avatars that can meet, in conditions as close as possible to reality – having a drink with friends for example. In these second types of metaverses, sometimes amazing applications are already in place: training as a surgeon in virtual reality, for example.
“Metaverse is increasingly extending beyond the world of entertainment: the more the material becomes professional, the more the boundaries of its development are pushed. These metaverses have been taken very seriously by the giants of the real economy: Carrefour or Casino have acquired plots of land in the metaverse. And, just like in real life, the law applies, warns Me Jacquemin: “Purchasing land is a transaction, with issues of property rights. Metaverses do not escape harassment because behind the avatars hide physical persons, subjects of the right…”
In these metaverses, exchanges are conducted especially in cryptocurrencies. Again, a definition is needed. “It’s a virtual fungible digital asset. Exchangeable means that it can be exchanged for its equivalent: a bitcoin can be exchanged for a bitcoin, just as a euro can be exchanged for another euro”, continues M.e Jacquemin.
In France, none of the more than 5,000 cryptocurrencies circulating in the world are recognized as currency. Which doesn’t stop them from having value, of course. They are not created by a state, but by communities of Internet users, whose members are rewarded for touching a certain number of “tokens”. The law of supply and demand does the rest, which explains the lack of visibility for investors unfamiliar with finance: bitcoin has lost 300% of its value in one year, for example, even though its price has tripled in five years.
NFTs, tokens exchangeable to cryptocurrencies or euros
Cryptocurrencies are hard to sell in real life, unless you buy a Tesla car… On the other hand, they are the preferred form of payment in the metaverse. And we come back to the famous NFT, immutable tokens, which means we cannot exchange them for their equivalent. “These are tokens that can be exchanged for cryptocurrency or euros, through platforms that operate the conversion. A NFT is a form of ownership certificate linked to a virtual or physical object”, defines Me Constantius Cuvillier.
Specifically, the rapper Booba offered 25,000 NFT for sale, for an amount equal to 20 euros in cryptocurrency, corresponding to sequences from his latest music video. In two hours, 7,000 fans have received these NFTs and therefore “own” one of the sequences. And they had the right, in exchange for their investment, to see the clip and participate – virtually – in the concert of their idol at the Stade de France, which was filmed and broadcast live… For the rapper, the operation has been very profitable. .
NFTs raise complex legal issues
Other sectors are concerned: there are Panini stickers in the form of NFTs – limited to 9600. These are no longer stickers to stick on albums, they are virtual, specifies M.e More, even if you can print them at home…” The art market is particularly affected by NFTs. “There is a lot of speculation, explains the lawyer from Dijon, but we can also see this as a democratization, NFTs make it possible to enter the market with a modest amount. Of course, you can’t hang the painting, since you’re just buying a virtual representation of the work.
These NFTs raise complex legal issues, particularly in potential violations of intellectual property law. To overcome this, she explains, “The Chamber of Judicial Officers of Paris has launched the Legide platform, which offers, in addition to the bailiff’s report, the protection of all types of intellectual creations with a time-stamped deposit using blockchain technology.”
To see more clearly, and before starting, it is best to consult, in the real world, with a lawyer who works in this very specific area of law.
Metaverses are increasingly extending beyond the realm of entertainment.
Me Léa Jacquemin, lawyer at Dijo n Bar
An NFT is a form of certificate of ownership associated with a virtual or physical object.
Me Constance Cuvillier, lawyer at the Dijon Bar