Non-Fungible Tokens and Copyrights

What is a non-fungible token? Non-fungible tokens (NFTs) are unique pieces of data stored on a digital ledger- a blockchain. Non-fungible just means they are unique and can’t be exactly substituted by something else. A dollar can be replaced by any other dollar, making it fungible. But an NFT comes with certain unique properties. Blockchains play a pivotal role by using cryptography to link blocks into a chain of data.

Recently, digital assets have included art, memes, music, videos, digital 3D works, and more.

The unique identity and ownership of an NFT is verifiable through the blockchain ledger and is associated with a license to use the digital asset. But that ownership doesn’t necessarily carry over to the field of copyright. Buying a piece of digital art NFT would grant ownership over the specific art, but not grant proprietary rights over the usage of the art. Underlying copyrights can be negotiated and transferred as part of the price, but shouldn’t be assumed as part of the price.

Unfortunately, copyfraud, a false copyright claim with respect to content in the public domain, is common in the NFT space. Bad actors may attempt to mint an NFT for a work to which they don’t even own the copyrights. While copy fraud has been around for generations, block chains use anonymity features that make it difficult to verify the authenticity of particular digital artifacts, and to track the original owner of a particular digital artifact.