The trademark infringement trial between French luxury company Hermès and digital artist Mason Rothschild is scheduled to begin on January 30 in a federal court in Manhattan. Both parties allege that the other infringed on their respective trademarks.
Because the nonfungible token (NFT) artist was marketing and selling MetaBirkins, a series of NFTs that was alleged to be inspired by the luxury brand’s Birkin bags, the luxury company accused the NFT artist of infringing on its trademark.
On January 14, 2022, Hermès lodged a complaint against Mason Rothschild in the United States District Court for the Southern District of New York, alleging that the artist had refused to stop selling his NFT collection. This event marked the beginning of the trial as well as the related lawsuit that was filed at the same time.
According to papers that were submitted to the court on January 23, Hermès is arguing that the collection has made an illegal use of the Birkin trademark and may have caused clients to believe that the premium brand is affiliated with the initiative.
In the meanwhile, the court documents disclose that Rothschild thinks his work is protected under the First Amendment, which places no restrictions on free speech and prohibits censorship of any kind.
In the days leading up to the trial, several attorneys specialising in intellectual property law and other areas of the law have offered their opinions, stressing that the case may have repercussions for the NFT business.
An associate at the law firm Michael Best & Friedrich LLP named Laura Lamansky referred to the case as a “momentous turning point for Web3 and digital products” in an article that was published on January 18 and discussed the trial as well as its potential repercussions for the future of the NFT business.
The issue that has to be answered is, to what degree are trademarks from the physical world enforceable in the digital realm? “We will be keeping a close eye on this case to see how we can most effectively strengthen rights in the digital world,” she added.
“It will hopefully shed some light on how artwork and the First Amendment interact with consumer goods and NFTs and how far a brand’s rights in its trademarks or products extend in the digital space,” added Lamansky. “It will also hopefully shed some light on how a brand’s rights in its trademarks or products extend in the physical space.”
Michael Kasdan, a lawyer who specialises in blockchain and technology, has been keeping up with the case as well, although he does not seem to believe the outcome will be very important.
“It’s only going to be one district court case data point in the end, but it’s certainly going to be an intriguing one,” he added.
Companies and brands have started to enforce stricter policies on non-fungible token (NFT) projects, which they believe violate copyright, intellectual property, and trademark laws.
StockX was accused of committing trademark infringement on February 4, 2022, when Nike filed a lawsuit against the online reseller for the purported creation of NFTs that were modelled after Nike’s shoes.
After a base-layer blockchain provider, Secret Network, announced the auction of “uncut screenplay scenes” from Tarantino’s 1994 film Pulp Fiction as NFTs, film director Quentin Tarantino settled a lawsuit filed by Miramax in September 2022. The lawsuit had been filed after Secret Network announced the auction.
Ownership is one of the most critical aspects of nonfungible tokens (NFT). They are a representation of the evolution of execution and ownership of art, content, music, in-game assets, etc., since they are digital assets with distinctive identities that are verifiable on a blockchain network.
However, they have also created a new dimension of discussion about the interaction and grey area around copyright, intellectual property (IP) and trademark laws.
In a recent highly publicized fiasco in the cryptoverse, crypto decentralized autonomous organization (DAO) Spice DAO was mocked for believing that the ownership of a copy of the unpublished manuscript of the film Dune granted them its copyrights as well. The DAO intended to produce an “original animated series” inspired by the book to be sold to a streaming service for which it would require copyrights. The book was won at a Christie’s auction in November last year for over $3 million.
In this case, copyright laws dictate that the copyright is valid throughout the lifetime of the creators and even 70 years after their death which entails that the DAO cannot make the animated series without the permission of the living co-creator, Alejandro Jodorowsky. Cointelegraph discussed this incident with Andrew Rossow, a technology attorney and Ohio law professor, who said:
“The Spice DAO and Dune fiasco was a landmark in its own right that sends a very powerful message to everyone involved in the NFT space — creator or owner. The $3-million mistake that was made proved that intellectual property’s dominion in digital fine art is essential to its success and longevity.”
While it might not be a secret that the ownership of an NFT doesn’t necessarily mean that the underlying copyright of the work has been transferred to the owner, it doesn’t seem evident to all market participants. Rossow explained that copyright law affords six “bundles of rights” or exclusive rights to a creator, which collectively establish their copyright. The first four rights are crucial to NFTs right now — the right to reproduce the work, the right to create derivative works, the distribution right, and the public performance rights.
Marie Tatibouet, chief marketing officer of cryptocurrency exchange Gate.io, spoke with Cointelegraph about the Dune fiasco, noting that anyone who did the proper research and due diligence would’ve known that the sale of a book’s copy had no copyrights attached to it. She said, “There still seems to be a wider misconception around what exactly NFTs are and what’s included when one purchases or trades an NFT in the space. As the industry develops, so will educational resources and a wider understanding of the market.”
Lawsuits begin to pour in
As things now stand, brands and companies have begun to crack down against NFT projects that violate copyright, IPs and trademarks. On Feb. 4, Nike filed a lawsuit against StockX for trademark infringement on Nike sneaker NFTs. The sneaker company has lodged a 50-page long complaint that claims the reseller has sold nearly 500 Nike brand sneaker NFTs impacting Nike’s reputation and legitimacy. Additionally, the shoemaker has accused StockX of selling the NFT sneakers at inflated prices amid “murky terms of purchase and ownership.”
Even French luxury fashion house Hermes has recently had a legal confrontation with Mason Rothschild, creator of Hermes Birkin bag-inspired NFTs MetaBirkins. Hermes mentioned in its complaint, the “defendant’s MetaBirkins brand simply rips off Hermès’ famous Birkin trademark by adding the generic prefix ‘meta’ to the famous trademark Birkin.” In response, the creator compared himself to Andy Warhol painting Campbell soup cans in that he is making art from a well-known commercial image.
Jeff Gluck, CEO of CXIP Labs — an NFT minting platform — discussed the incoming lawsuits with Cointelegraph. Gluck is also an IP and copyrights lawyer with over 14 years of experience in the legislative domain. He stated:
“There are dozens of artists preparing lawsuits against OpenSea for selling infringing NFTs. These examples are a sneak preview of a wave of litigation heading towards the space. It’s both good and bad in that it discourages creativity and growth in some ways, but it’s beneficial because it will ultimately help provide some guidelines in terms of clear legal parameters and guidelines for the space.”
Gluck further pointed out that one of the biggest problems NFT marketplaces are facing right now is that if they mint NFTs for their users and/or provide any level of curation, they are not shielded by the Digital Millennium Copyright Act (DMCA) and thus can be sued directly for copyright infringement by creators. The DMCA was passed in 1998 to implement the 1996 World Intellectual Property Organization’s Copyright Treaty and Performances and Phonograms Treaty. In part, it creates limitations on the liability of online service providers for copyright infringement.
Rossow believes that is an essential requirement for any NFT creator to highlight the copyright, trademark and IP implications of the NFTs they launch. He said, “The smart contract behind an NFT is what governs the rights on how it can be used. It would also make sense that the creator(s) behind any NFT project are crystal clear to their audience before minting on what rights they will have with the NFT once they mint and purchase it.”
Blockchain and copyright laws
The NFT industry has grown faster than even its participants could have imagined. The market sales surpassed $40 billion in 2021 just on the Ethereum blockchain. A recent NFT market report from Chainalysis found that the weekly total cryptocurrency value and average value per transaction have grown hand-in-hand from January to October in 2021. The prime reason for this growth is the hype that has surrounded these assets for the last two years from minting platforms, games, marketplaces, exchanges and others.
Related:From art to gaming: The biggest NFT trends of 2021
As a by-product of this high supply and demand, there are a lot of scams, hacks and other intentional property law violations that have been become more frequent. Tatibouet elaborated on this phenomenon, stating, “Considering many platforms have made minting NFTs quick and easy, it’s also made it possible for those with malicious intent to produce and sell NFTs of copyrighted items. Platforms are slowly starting to adapt to this; however, it may remain to be an issue for the foreseeable future.”
She also noted that platforms will need to adapt quickly and introduce barriers to those looking to abuse the system since they are liable to face legal repercussions, being the direct link between consumers and creators. As multinational companies that have large intellectual property libraries that are being abused, the NFT industry can expect legal issues down the road.
However, NFTs are also a relatively new innovation compared to the existing prevalent copyright, IP and trademark laws, which could be an opportunity to amend the law to account for this new technology. Varun Sethi, founder of blockchain legal services firm Blockchain Lawyer, told Cointelegraph that copyright laws need to recognize the tokenization of digital assets as a revolutionary and evolving legal option and accept the NFTs owner as the copyright owner.
However, Sethi noted the obstacles involved, saying, “There are challenges pertaining to updating of the registered owner as per copyright record plus fragmentation of ownership of a single digital art into multiple NFT owners plus payment of filing fees for becoming actual owner and not just an ostensible owner.”
Sethi foresees even more ownership issues when NFTs change hands unless the law is amended so that all NFT sales are recorded as ownership swapping as per the copyright office’s records.
Even though NFTs as a whole fall under copyright and IP laws of the countries in which they are issued, there are NFT projects that are now aiming to solve the grey area around this legal concern and offer copyrights for NFTs as well. CXIP Labs is such an example wherein copyright registrations are included in the minting process itself.
A platform called GuardianLink is using its proprietary artificial intelligence technology to monitor the web for any duplicate, rip-offs and copy-cat NFTs of the creators using their platform. This enables both creators and collections to protect their NFT assets.
The cryptocurrency community is known to adapt to changes fairly quickly due to the nascent nature of the industry and the technology. Thus, as the legal issues around NFTs develop and reveal more about what modifications need to be made to the prevalent structure, there will also be protocols that adapt.
Eventually, all museums will build their digital copy in the metaverse, according to Dmitry Ozerkov, the head of the Contemporary Art Department at The State Hermitage Museum.
Ozerkov is currently developing the “Celestial Hermitage”, a digital version of the iconic Russian museum, which will be exhibiting NFT art.
“We are all moving into the digital era and our digital twin will be following us everywhere”, Ozerkov told Cointelegraph in an exclusive interview.
The State Hermitage in Saint Peterburg, Russia, is the largest museum in the world by gallery space with around 3 million works of art.
In September 2021, the museum took its first steps in the NFT world by selling 5 digital reproductions of its most famous masterpieces in the form of NFTs raising almost $450,000.
In November the Hermitage launched its first entirely digital exhibition, titled ‘The Ethereal Aether”, where 38 NFTs are showcased within a digital reconstruction of the museum.
Unlike the physical Hermitage, where visitors can only watch the works o display, the virtual exhibition allows visitors to interact with the NFTs on display.
“You can pass through these doors without touching anything, while in the virtual world, you can do anything: you can play with artworks, you can make them interactive, you can add data to it”, explained Ozerkov.
The exhibition can be visited online for free until December 10th.
As pointed out by Ozerkov, the interest of the Hermitage in NFTs transcend market dynamics and seeks to investigate the artistic value that NFT can bring into the contemporary art world.
“My idea was to take a selection of existing works out of the market and to put them into the museum and to have a look: what remains in them as art? Is there any art there or we like, what we value in them is only money?”.
Watch the full interview on our YouTube channel and don’t forget to subscribe!
The music industry has undergone a massive transformation in recent years. We have seen the advent of the internet leave its mark on music, and most notably, 1999 spelled the coming of Napster. This then-revolutionary peer-to-peer online streaming service defined a whole generation and enabled musicians to share their creations with the world.
Streaming has become the dominant format for music today, through Apple, Amazon, Tencent Music and the clear category winner — Spotify. The goal of distribution services and platforms like Spotify is to enable and empower artists to create more without worrying about anything besides honing their craft.
However, that’s just on paper — does reality reflect this utopian ideal? Not so much.
Sure, the “transformation” of music in the past decades is evident, but it seems that someone got left behind. And the saddest thing is that those who got left behind are the very artists that make us all get goosebumps, make our feet move and bring the widest of smiles on our faces.
The economics of streaming are tough. Platforms like Spotify operate under a business model where the platform operator takes a cut for each stream. That makes sense as Spotify offers better-than-nothing distribution, but there is still a huge problem. Ultimately, it is roughly 70% that ends up with the music rights holders, and the discovery feature tends to put lesser-known artists at a disadvantage vis-a-vis the household names. The result is a top-heavy distribution funnel benefitting the already-made-it musicians.
It isn’t yesterday’s news that music is still a rather damp and dark place for most artists trying to win bread by creating and doing the above. The industry is still plagued by revenue-hogging intermediaries seeking to undercut those who matter most. If you aren’t like the Taylor Swifts, Billie Eilishes and Justin Biebers of the world, you are likely struggling to make ends meet. And even if you are like them, you are probably not getting your due either.
On the bright side… change is coming. No, scratch that — change is here.
Ushering in a new era of music
Nonfungible tokens (NFTs) and the underlying technology are introducing a whole new ball game and a level-playing field that will enable and empower artists. What NFTs do is unlock value by making digital scarcity real and assetized. At the same time, they allow musicians, designers and everyone in between to exercise control over their work, effectively making them masters of distribution.
Related:NFTs are a game changer for independent artists and musicians
Do you remember the first NFT you bought? And do you also remember the feeling after you bought it? Felt quite remarkable, didn’t it? That’s another thing about digital collectibles — owning them, stacking them, is simply intoxicating.
Now, imagine if you could support your favorite artist and get your hands on their latest hit directly from them and get the “NFT kick” out of it too. Say you want to attend a festival filled with all your favorite DJs — wouldn’t it be an absolute delight to be able to get your ticket straight from the source? And how rad would it be to also get a unique, customized and one-of-a-kind proof of attendance with your very own name in there? Now we’re talking.
Alright, that’s all cool and soon to be ubiquitous, but what’s the deal with streaming platforms like Spotify? Great question. Most certainly mean well (at least so we hope) and have moved the needle in the right direction. However, that’s not quite enough in a world littered with arbitrary numbers and standardized screens.
Reintroducing scarcity and making music feel unique again
Digital scarcity is necessary to create a unique user experience and enable fans to form longer-lasting and more profound connections with their favorite artists.
As it stands, there is nothing truly unique about music on Spotify — tracks don’t come in limited editions, music connoisseurs are not able to get their hands on rare album releases, and Spotify lacks a scarcity system. Think about it — if you are a diehard fan of the Canadian DJ and producer Deadmau5, you would probably want to own the #1 release of a given track or an album. Or then the #10 release, or #50 — something with a higher intrinsic value that showcases your love for a given artist. Why doesn’t that exist?
Such a “tiered” system of releasing music would undoubtedly benefit the artist since limited and early editions imply higher value. At the same time, it also enables fans to grow together with the artist. Take that #1 release of a Deadmau5 track you own as an example. The moment the track makes it into, say, the Weekly Top 10, others will see your name right next to it — that way, fans can get a slice of the “fame” pie.
At some point and for whatever reason, it might make sense for a fan to sell that #1 release NFT. Care to guess who would get a cut of that sale? Correct — the artist.
Related:Celebrities are embracing NFTs in a big way
Direct one-on-one interaction, a margin of clout for the fans, an enhanced sense of belonging, and deeper connections — that’s one reason, or three reasons rather, why NFTs are en route to causing a fair share of trembling at the next Spotify shareholder meeting. The other? Enabling and empowering artists and putting them back in the driver’s seat.
A new era of the creator economy
You see, music streaming platforms stripped value away from musicians by standardizing everything, and the past few decades’ worth of digitalization largely created an environment that limits the artist’s control over distribution. With NFTs, this control is now present again — you can program and track anything and do whatever you want with your music if its initial release to the world utilizes NFT technology.
Oh, and you can now also give your fans a piece of the pie by introducing other creative twists such as revenue-sharing. The more popular the artist, the happier the fan — everybody wins. Couple that with the ideas outlined above, and we’ve got ourselves a recipe for success. Who would have thought that’s possible?
Related:Bull or bear market, creators are diving headfirst into crypto
We are entering a new era of the creator economy, and NFTs are the next logical step in enabling and empowering artists even more. It is high time to reintroduce scarcity in an industry predicated on uniqueness and vacate the driver’s seat for those best-suited to take on the road ahead.
Move aside Spotify; NFTs are coming.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Joan Westenberg is a Web 3.0 writer, angel investor and creative director. She founded a tech PR and communications firm called Studio Self and is a part of the MODA DAO team. Her writing has been published in The SF Chronicle, Wired, The AFR, The Observer, ABC, Junkee, SBS, Crikey and over 40+ publications and her regular work can be found on Pizza Party, sharing notes on Web 3.0, the Metaverse and NFTs.
Trading volumes across various verticals of nonfungible tokens (NFTs) have been on a tear this year.
Combined sales for collectible and art NFTs have reached $7.4 billion as of Q4 2021. The art NFT market has grown from $17.8 million on January 1 to $1.8 billion in total sales as of Nov. 5, 2021. At the beginning of 2021, the collectible NFT market started with a total sales volume of $55.5 million. It has since ballooned to $5.6 billion. As reported by Reuters, total NFT sales volumes jumped from $1.3 billion in Q2 to $10.7 billion in Q3.
Record sales like that of the rare Bored Ape Yacht Club NFT, which went for a record $3.4 million on Oct. 26, puts the frenzy of the NFT market into more context. The sale closed on Sotheby’s online art auction platform Metaverse. The last record auction of a Bored Ape Yacht Club NFT happened in September, closing at $2.9 million. The Oct. 26 record took place in tandem with another expectation-beating auction the same day in which a Bored Ape Yacht Club NFT collection auction of 101 pieces sold for $24.39 million.
The Bored Ape Yacht Club NFT art series, which launched in April 2021, has accumulated almost $1 billion in total sales this year, according to DappRadar. Sotheby’s first auction of NFT artist Pak fetched $16.8 million in April as well, and Christie’s followed with an NFT piece by artist Beeple for $69 million.
“What we are seeing with NFTs is the emergence of an entirely new audience of traders into the space, driven by possibly the most friendly on-ramp to crypto ever seen,” Pedro Herrera, senior blockchain analyst at DappRadar, told Cointelegraph.
The “hype machine” is real
In April, the art and data science blog Artnome highlighted the correlation between the number of views by registered collectors on SuperRare and an NFT’s sale price on the platform. The authors concluded that “the hype machine is real,” as data showed that the number of views by registered collectors of a work correlated to a higher sales price for the NFT.
There were two surges in the market this year that also coincided with solid spikes in internet searches for the term “NFT.” The first happened after the highest-paid price for an NFT — Beeple’s $69 million auction of his photo collage “Everydays: The First 5,000 Days” — was sold through Christie’s online auction site on March 11. It was the first NFT ever to be auctioned at a major fine art auction house, and the hype poured fuel on the market. The total monthly sales volume in the art NFT market surged from $32 million on March 1 to $83 million by April 1.
The second surge came on July 31, when sales in the collectible NFT market increased from $1.2 billion in total all-time yearly sales to $4.65 billion by Sept. 30. The peak of the “NFT” search term coincided with two of the most popular AI-generated collections, CryptoPunks and the Bored Ape Yacht Club, beginning to dominate the crypto art market.
In a May 2021 New York Times op-ed, Hungarian network scientist Albert-László Barabási described his analysis of transactions that took place on the SuperRare crypto art NFT marketplace platform.
In the analysis, Barabási examined the number of co-owned art NFT transactions between collectors on the platform. He defined co-owned art NFTs as art NFTs that had been bought and sold between more than one collector through SuperRare. He analyzed each artwork as a “node” on a “network” of transactions between registered SuperRare collectors to see how many of the same pieces had been owned by different collectors.
His reasoning was that art collectors typically collect and trade in one type of art, whether a particular artist, style, genre or medium. Therefore, he hypothesized that there were only a small group of collectors making the purchases of the high-end art NFTs.
As it turns out, he was correct. Barabási found that a group of four collectors owned most of the works with only three degrees of separation between any one of them and the 16,000 works of art they collected.
In a report released by crypto analytics firm Moonstream that analyzed transactions on the Ethereum blockchain between April and the end of September, the authors found that there is great inequality in the Ethereum NFT market, with the top 16.71% of NFT owners controlling 80.98% of the NFTs.
Furthermore, most of those purchases are for NFTs with more extrinsic than intrinsic utility — think utility tokens like name service NFTs — that have a common functionality on-chain versus rare CryptoPunks collectible NFTs going for seven figures.
The report also discovered that 83.29% of the addresses which assumed ownership of an NFT, did so for less than 10 Ether (ETH).
Even though the Moonstream data looks at the broader NFT market, it seems to support Barabási’s analysis that, for the higher-end, intrinsically-valued crypto art market, there is a small, tight club of whales who own the majority of the NFTs. Many of these owners are collectors and marketplaces. But, the report also noted that the barrier to entry for the NFT market is low, and disbursement of NFT ownership is correlated to the level of extrinsic utility of the NFT.
In a poll conducted by The Harris Poll and Adweek in April, 40% of the 1,088 participants surveyed said they were “familiar” with NFTs and 81% said they were aware of NFTs.
“Overall, not many Americans have jumped on the NFT bandwagon yet — only 12% of respondents said they’ve invested in the digital collectibles. But among millennials, that number’s a bit higher: 27% say they’re currently investing in NFTs. Millennials are also the most likely cohort to invest in cryptocurrencies at 37%,” according to the poll.
“Predictably, those who consider themselves ‘collectors’ are also more likely to want a piece of the shiny new digital collectible pie. For overall collectors, 22% said they own NFTs, and for collectors with more than $100,000 in annual income, that jumps to 33%.”
As conveyed in the Hiscox Online Art Trade Report for 2021, the current situation in the market has become hard for many art veterans to understand due to the current values of CryptoPunks and Bored Ape Yacht Club pieces at auction. Many do not know what’s hype and what is not. Perceptions are changing, though. The report’s survey of art auction houses and online websites found that 14% of art marketplace platforms already offer NFTs for sale on their platforms, with another 38% surveyed stating that they are planning to do so soon.
According to the report, there is speculation that the traditional and crypto art markets could merge into a permanent hybrid experience where physical art galleries showcase crypto art and traditional artworks are digitized and sold online. This year, at least four of the most expensive crypto art sales took place on traditional online art auction platforms.
Bobby Ong, co-founder and chief operating officer of CoinGecko, told Cointelegraph:
“Perhaps one of the biggest signs of traditional art collectors entering the NFT market is the fact that traditional auction houses like Christie’s and Sotheby’s are conducting NFT auctions and bridging the gap between NFTs and art collectors.”
Besides the pandemic, the report highlighted two instigating factors fueling the proliferation of the crypto art market in 2021. First, two of the major traditional art auction houses, Christie’s and Sotheby’s, began accepting cryptocurrency as a form of payment. The use of cryptocurrency as payment was a way for the two auction houses to attract and cater to wealthy crypto investors.
Secondly, NFTs provide artists with a public ledger that creates proof of title and authenticity for their work. Besides protecting against theft and forgery, this allows artists to collect royalties in the secondary NFT art market.
Will digital art go mainstream?
With individual CryptoPunk NFTs going for seven-figure price tags, what will it take for the art and collectible NFT markets to go mainstream?
In the April 2021 post on Artnome, the authors stated one of crypto art’s greatest achievements so far has been to “puncture the illusion of contemporary art as a space for ‘high’ culture.” The authors also voiced their intention “to point a way beyond the current situation, in which speculation appears to be as much a driver of art’s value as the works themselves.”
As DappRadar’s Herrara said, “It’s important to draw lines between different types of NFTs. Sure, a CryptoPunk is now the equivalent of a Picasso. Therefore it’s outside most people’s financial reach. However, new and exciting collections, with the potential to become as valuable as CryptoPunks arrive daily with price tags under $400. So frankly, you don’t need millions in your wallet to get involved.”
Patreon executives again teased their company’s expansion into the world of crypto at a 2021 Creator Economy Summit by The Information panel. Patreon CEO Jack Conte appeared with Chief Product Officer Julian Gutman, saying:
“I really love the idea of creators owning their media and owning their content. […] I love the idea of shifting power away from institutions and toward individual creative people.”
Conte noted that while the platform doesn’t currently have full time employees focused on cryptocurrency, it was considering hiring them. Gutman went on to say, “I think for us, really thinking through how we’re continuing to ensure we’re creating a sustainable recurring future for creators is why we’re evaluating the crypto space more broadly.”
These statements follow last month’s announcement that the company was seeking feedback from its clients about the possibility of launching a Creator Coin/Social Token. On a livestream, Patreon Head of Policy Lauren Crentshaw said:
“We’ve heard from a number of creators who have been interested in the opportunity to offer exclusive memberships and benefits to their patrons through a coin or token, a digital item that they can hold onto that shows that they are part of your fan club.”
Patreon’s current terms of service specifically prohibit the use of the platform to sell cryptocurrencies outside of the sphere of personal investment advice.
In 2019, libertarian talk show host Dave Rubin switched from Patreon to accepting donations in bitcoin due to what he perceived as censorship on the platform’s part. Last month Twitter rolled out a crypto donation feature that integrated with many web based applications, including Patreon.
Many nonfungible token (NFT) marketplaces are allowing digital collectors to identify artwork based on the wallet address of its creator through a partnership with software giant Adobe.
In a Tuesday announcement, Adobe said it would be partnering with major NFT marketplaces including OpenSea, KnownOrigin and SuperRare to allow users to verify the authenticity of the digital content. Adobe’s Content Credentials can add an NFT creator’s wallet address and social media information to the metadata of tokens listed on the marketplace.
“This partnership furthers our commitment to empowering users with more tools as we collectively rethink how we transfer digital goods on the internet,” said an OpenSea spokesperson. “Working in tandem with market leaders like Adobe and the growing NFT community, we will keep providing features to increase trust and transparency across the metaverse.”
The feature will still seemingly have the option for NFT creators to remain pseudonymous, with them choosing to display crypto addresses linked to their online identity or full real social media profiles. Rarible, another marketplace that offers Adobe’s digital verification system, said the feature would help “fight misinformation with attribution and verifiable truth of content.”
Related:Bragging rights: Twitter previews verification badge for NFT profile pics
According to data from DappRadar, OpenSea is the largest NFT marketplace by daily trading volume, reported as more than $50 million at the time of publication. SuperRare, Rarible, and KnownOrigin rank far below with roughly $1 million, $328,000, and $42,000 daily trading volume, respectively.
The platform recently faced criticism from many in the crypto space after OpenSea head of product Nate Chastain was accused of pumping up the prices of NFTs that he featured on the homepage before selling. OpenSea said its employees are barred from buying and selling collections that are being featured on the platform.
Software giant Adobe is trying to make it easier for nonfungible token, or NFT, creators to prove they are the artists behind their work by linking social media profiles and crypto wallet addresses.
In a Tuesday announcement, NFT marketplace Rarible said it would be partnering with Adobe, allowing token creators to display the software company’s Content Credentials to verify the authenticity of the digital content. According to Adobe, this feature can add an NFT creator’s wallet address and social media information to the Content Credentials metadata of tokens listed on Rarible, helping “to fight misinformation with attribution and verifiable truth of content.”
As a member of Adobe’s Content Authenticity Initiative alongside the BBC, Getty Images, Microsoft and Nikon, Rarible will still seemingly have the option for NFT creators to remain pseudonymous, with them choosing to display crypto addresses linked to their online identity or full real social media profiles. The identity of the buyer behind the $69 million purchase of Beeple’s NFT in March remained anonymous until they chose to disclose their identity.
Related:Copyright infringement and NFTs: How artists can protect themselves
According to data from DappRadar, Rarible is the eighth largest NFT marketplace by daily trading volume, reported as $393,910 at the time of publication. However, the platform’s transaction volume has seen a significant decline since peaking at $2.5 million in April. OpenSea had more than $58 million in volume, putting it far above SuperRare, at $1.3 million.
Earlier this summer, CNN and The New York Times each warned that the nonfungible token (NFT) bubble, fueled by buzz over eye-popping valuations for digital art and interest from collectors, might already be bursting.
As the sixth employee at a social media startup called Wildfire — which was acquired by Google in 2012 — I’m all too familiar with skeptics and precautionary tales when it comes to new and emerging technologies. Based on my experiences across entertainment, licensing and blockchain technology, I contend that if the so-called NFT bubble is bursting, it could be a net positive for the future of the industry. The industry is so nascent, we’re the first batter of the first inning right now.
Related: Beyond the hype: NFTs’ actual value is still to be determined
NFTs: The industry to explore
Public attention is always shifting from one trend to the next, so naturally, the otherworldly surge in popularity of NFTs that we’ve been seeing would eventually taper off. This presents us in the industry with an incredible opportunity to explore the many doors that NFTs will open to creators, IP owners and consumers alike.
For brands looking to grow and reach new audiences, NFTs are emerging as a bonafide marketing channel. Once NFTs gain more mainstream recognition beyond the initial swell, creators will have the ability to reach more and more users. Platforms like Telegram, Twitch and Discord have already demonstrated the many ways to create and nurture a fan base. Just imagine what a robust NFT marketplace will add to this growing movement.
As digital certificates of authenticity, NFTs can function as guardians of intellectual property rights. The NFT space will ultimately look like the music publishing model, where music publishers and songwriters amass catalogs of copyrights that deliver a persistent stream of royalties in perpetuity, driving long-term valuation. The creation of a management platform that allows IP owners to manage NFT transactions (think business intelligence, analytics and CRM capabilities) is on the horizon.
Related:Nonfungible tokens: A new paradigm for intellectual property assets?
NFTs also serve as digital passports, completely revolutionizing the fan experience and reimagining the idea of the fan club for artists, brands and IP owners. As the world fully opens up after the COVID-19 pandemic, fans will use their NFT portfolio to unlock behind-the-scenes offers, VIP experiences and special meet-and-greets. Given that digital assets, like tangible goods, are based on the economic principles of supply and demand, scarcity will enhance value and increase the number of consumers and digital natives who seek to get in at the ground level. Additionally, proximity-based NFTs will drive experiences, both offline and online.
NFTs: Moving forward
The future of NFTs becomes increasingly potent as we in the industry continue to think first and foremost about fans and consumers. We must shift the attention of the media and consumers away from the six and seven-figure primary sales numbers to a focus on creating real value by way of infusing true utility into NFTs. We must focus on creating smart, strategic collections of NFTs (as opposed to one-off drops) that gain enhanced value over time as the utility of the NFTs purchased becomes increasingly evident to fans.
The industry is rapidly evolving from what I consider to be NFT 1.0 — NFTs as digital collectibles — to NFT 2.0 — NFTs as storytelling vehicles. Projects such as Stoner Cats are the tip of the iceberg in terms of leveraging NFTs as access tokens to view exclusive video content. What excites me, even more, is NFTs as storytelling vehicles, where the NFTs are powered by deep gamification strategies and community layers and become critical components of a multi-platform, transmedia storytelling experience.
At Wildfire, we were always aware that a rising tide lifts all boats. We made significant efforts to bolster not just our company but the entire social media marketing category. I feel the same way about the nascent NFT industry. Most importantly, NFT companies must remain steadfastly focused on the fans and consumers so that we avoid becoming an industry that sinks under a perception of misguided cash grabs and short-sightedness.
Related:Navigating the NFT minefield: It should be made easy for first-time buyers
NFTs will become a fan’s persistent passport and gateway to unlocking unique experiences — both online and offline. This will occur as NFT collections become smarter, more strategic, more gamified and deliver meaningful utility that sustains long-term fan engagement.
As the industry matures, people will become more sophisticated in how they think about NFTs and the ultimate value NFTs deliver for fans and IP owners alike. The utility will become increasingly important as fans and consumers seek to better understand the “so what” factor behind NFTs. So what that I own this NFT. . .what can it do for me? What benefits does it bring to my life? What value do I gain by owning this NFT and how long will this value last?
The industry will continue to take major strides forward as key innovators in the space turn our focus to community, game mechanics and narrative storytelling to drive real value and utility from the NFTs we bring to market.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Ben Arnon is the co-founder and chief revenue officer at Curio, an NFT platform for the entertainment industry. Ben’s career began in the entertainment business with lead roles at Jersey Films, Universal Pictures, Universal Music Group, and Yahoo! Music. In 2010, he joined tech startup, Wildfire, and helped to scale the company to an acquisition by Google. Ben held a sales leadership role at Google for four years, before transitioning back into entertainment.
The market for nonfungible token, or NFT, digital artwork is taking on the traditional art industry. Within the first six months of 2021, analytics firm DappRadar recorded $2.5 billion in NFT sales, showing a major increase from the $13.7 million in sales during the same time period in 2020. Christie’s auction house reported $93.2 million in NFT sales during the first half of 2021. In addition to impressive sales, the NFT marketplace OpenSea, which reportedly hosts 98% of the entire market’s transactions, registered $4 billion in NFT trading volume during August this year.
While the rise of blockchain-based digital artwork is notable, many of the artists responsible for creating today’s most sought after NFTs are men. For instance, digital artist Mike Winkelmann — better known as “Beeple” — made NFT history after selling “Everydays: The First 5000 Days” for over $69 million on Christies. The platinum-selling musician “Two Feet” and acclaimed 18-year-old visual artist FEWOCiOUS also made headlines after selling four collaborative NFT artworks for more than $1 million. It was also momentous to see that the Argentinian designer Andrés Reisinger sold ten pieces of virtual furniture for almost $70,000 in an NFT online auction.
Women aim to change the “crypto bro” culture through NFTs
While the ratio of male to female NFT artists remains unclear, statistics show that there are considerably less women than men involved in the overall crypto sector. For example, a recent survey conducted by cryptocurrency exchange Gemini found that just 26% of females hold crypto. Although this is the case, the report also noted that more women than men indicated a willingness to get involved in crypto in the near future.
As such, it’s important to point out that a number of women artists have begun creating NFT projects to show growing female participation, while also aiming to drive more women to the crypto sector.
Lavinia Osbourne, founder of the community “Women in Blockchain Talks,” told Cointelegraph that the NFT sector may be more appealing to different genders given the fact that it focuses on creativity:
“Learning new words such as DeFi, blockchain and crypto wallets, much less understanding these terms, takes up a lot of energy and time. Art, on the other hand, is a lot more engaging. Many people may not understand what an NFT is and how it works, but they know art and they know how to be creative.”
To Osbourne’s point, Maliha Abidi, a female artist, author and activist, told Cointelegrah that her passion for digital media initially attracted her to the NFT world. Abidi explained that she has been campaigning for women’s rights through her artwork since 2012, but, after learning about NFTs, she created a project called “Women Rise.”
According to Abidi, Women Rise is a unique collection of 10,000 NFTs featuring female activists, artists, scientists, coders and more. The project’s mission statement is to “watch women rise on the blockchain.” Abidi added:
“I wanted to make sure that I was starting my journey in NFTs by celebrating real world women around the world. This project isn’t just about ethnic diversity, but it’s also about cultural diversity, religious diversity and diversity in terms of fields where women are breaking the glass ceiling. It’s also an extension of the work I’ve been doing over the last nine years.”
Abidi plans to officially launch the Women Rise project at the end of November this year, around the same time as the United Nations’ 16 Days of Activism against gender-based violence campaign scheduled for November 25. “Art is a huge part of this project, but it’s also about activism and shining a light on the role women play in real life,” said Abidi.
Abidi further remarked that she is most excited about the project’s plan to give back to a number of organizations she has worked with over the years. For example, she shared that 25% of proceeds will go to the Malala Fund, while another 10% will be donated across organizations supporting gender equality, girls education and mental health in marginalized societies.
According to Abidi: “Traditional artists aren’t just limited to women, but also includes men and non-binary people. We need to redefine the roles here. The NFT space is for everyone who wants to showcase their creativity.
Unsurprisingly, there are many female artist who feel encouraged to enter the world of crypto due to the passion for women’s rights and digital media. Lisa Mayer, founder of the NFT project Boss Beauties, told Cointelegraph that the opportunities made possible from nonfungible tokens resonated with her goals to help empower women:
“Before launching Boss Beauties, I started a company called My Social Canvas. We created a number of products designed by women, where the proceeds would go back to women creators to fund their education. But, following the COVID-19 pandemic, we needed to think of other business models for alternative funding sources. This is why NFTs and digital artwork connected with me and My Social Canvas.”
Mayer explained that Boss Beauties was launched three months ago, featuring a collection of 10,000 unique portraits of strong independent women representing different career paths. “There are women astronauts, women in STEM, doctors, race car drivers and more. The promise here is that all these traits mixed together show that a woman can be anything she wants.”
Following the launch of Boss Beauties, Mayer shared that the entire collection sold out in just 90 minutes, demonstrating the financial impact NFTs can have for small business owners. “I was blown away by this because during the pandemic, I had been working hard to get My Social Canvas to survive. As a small business owner I was really emotional to see the collection sell out so quickly,” she said.
While the sale of the Boss Beauties collection marked a milestone, Mayer also mentioned that out of the 10,000 NFTs created one was saved to be displayed as a physical piece of artwork at the New York Stock Exchange (NYSE) to celebrate “International Day of the Girl,” which took place on Oct. 11.
According to Mayer, this is the first NFT known to be displayed at the NYSE. “It will be displayed outside the iconic Muriel Siebert Boardroom, which honors the first woman to own a seat on the New York Stock Exchange. Muriel joined the 1,365 male members of the exchange on December 28, 1967,” she said. The NFT is currently being auctioned off to fund scholarships and mentorship programs for women and girls in finance.
Efforts to help women overcome a “fear of crypto”
Although the NFT space appears to be resonating with more women in comparison to other crypto-related sectors, educational awareness is still needed to drive participation.
For instance, Mayer explained that many of the technology savvy women in her network still don’t know about NFTs, given that the space is so new. As such, a steep learning curve must be overcome, which Mayer believes will be conquered once women understand the financial opportunities associated with NFTs. “This is an opportunity for a transfer of wealth,” she remarked.
Echoing Mayer, Athan Slotkin, an entrepreneur and investor commonly known as “The Shadow CEO,” told Cointelegraph that once more people are aware of the economics behind NFTs they will want to leverage them. “Boss Beauties raised about 5 million dollars in 90 minutes. People will see this as potential.”
Furthermore, Abidi mentioned that education is also needed to help prevent scams and gatekeepers from infiltrating the crypto space. Referencing the example of the “Fame Lady Squad,” Abidi explained that three men pretending to be a female-led NFT project was one of her first introductions to NFTs, adding: “It was sad to see that a lot of people supported Fame Ladies, but that it was really a scam. The challenge here is that we must have more education and less gatekeepers in crypto.”
While education is still required in all aspects of crypto, it’s important to point out that female-led groups have recently been created to help increase awareness within non-intimidating environments.
For example, Osbourne explained that Women in Blockchain Talks plans to soon launch a female-centric NFT Marketplace called “Crypto Kweens.” According to Osbourne, the marketplace is being built on the Rarible protocol and will serve as a place for female artists, entrepreneurs, creatives and founders to come together to support one another:
“It will be a place where others can support them and be part of the movement to make the metaverse representative of women and marginalized groups. Male artists will also be welcomed as long as their work is in line with the theme of ’empowering, honouring and uplifting the female form.’”
In addition to Osbourne’s initiative, Hailey Lennon, partner at law firm Anderson Kill, told Cointelegraph that she recently formed Crypto Connect, which is a networking group for those involved or interested in crypto and blockchain. Lennon explained that the group’s board of directors is led by all women, noting that a strong female presence will help bring more women and men into the crypto sector.
In regards to NFTs, Lennon mentioned that Crypto Connect’s Nashville lead is Evie Phillips, chief marketing officer of the NFT platform NFT Glee. Given Phillips expertise, Lennon commented that educational awareness around NFTs will be discussed at upcoming networking events, along with the idea that Crypto Connect memberships could be tied to NFTs in the near future. In turn, both women and men who leverage NFTs for themselves will likely understand the space better.