“NFTs, these new tools that herald a virtual revolution”

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.

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Whether you’re Generation “X,” “Millennial,” “Xennial,” or even “Baby Boomer,” you surely remember the time when one-of-a-kind or near-unique pieces of collectibles sold for very high prices: limited edition sneakers, one – off Barbie dolls, Funko Pops (those little dolls that can’t be taken out of their packaging!), 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, more specifically digital files. And even art collectors are slipping into this virtual world that we now call digital art or “crypto art”.

Artificial intelligence obliges, intangible objects of all kinds are in vogue and virtual collectibles, both the most serious and the most crazy, nestle in the most unexpected corners of our society or even of our imagination. They are called NFTs, ie “non-fungible tokens“, in French from “non-fungible tokens”, that is, objects whose value is inestimable and thus theoretically non-transferable in a market.

Its original purpose was to protect digitized artworks that have been made available to the public on the Internet and are likely to be plagiarized. Whether virtual or material, these works are now, whatever you say, considered a good that can be bought or sold in the marketplace. In other words… they are integrated into economic circuits like any other good. 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, interests 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 (artistic or non-artistic) objects it denotes have become perfectly replaceable, that is, have become interchangeable in a market for a commodity of equal economic value, whether it be an amount of currency or other tangible or intangible good.

For this reason, it would therefore be relevant to stop using this qualification that corresponds to a reality that, 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 commodification. It would actually be more accurate to speak of it protected replaceable token (PFT) or why not legal artifact binding (LABORATORY).

From the purchase of monkey portraits at the Bored Ape Yacht Club, and as stated by the seller, the purchaser of a portrait has access to club membership.

Laura 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 purchase portraits of monkeys from the Bored Ape Yacht Club, all similar in the structure of their faces, but unique in facial expressions or colors. From this purchase, and as specified by the seller, the purchaser 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 trade 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,” grossed nearly $69.3 million at Christie’s in 2021.

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

Such enthusiasm for NFT markets without any real substance may come as a surprise. The fact remains that fortunes are made and broken on exchanges between Internet users, some passionate about the novelty of the device, others interested only in potential profits that can be substantial and almost instantaneous.

NFTs are at the crossroads of an unexpected revolution.

Laura 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 the 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 its precise definition. Only since 2017 has there been a serious concern for conceptualization. It must be said that the NFT market continues to represent 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, until now there is no taxation that is perfectly adapted to these new products, which entails a high risk of litigation. While it might seem logical at first glance to link NFTs to the digital asset tax regime, given the complexity of the situation, nothing is optimal. For example, what about the application of the tax regime for works of art to NFTs? It’s hard to decide, as the legal definition of these works remains vague in terms of digital goods. The question may also arise whether it is decided to regard NFTs as intangible movable property and, for example, active cryptos that are comparable 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 are still incomplete with regard to the NFT, in particular with regard to the transfer of the moral and economic rights of the work, and are therefore generators of uncertainties and risks.

In these times of concern about the energy crisis, the same applies on an ecological level. Creation (Edition) of NFT is very energy intensive and therefore probably 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.

With NFTs, a new phase in the virtual revolution has begun.

Laura Alice Bouvier

Finally, the place occupied by the criminal issue is far from negligible. In addition to the issues related to NFT thefts that have made headlines in recent months, another concern is emerging. 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 metaphorsIn these seemingly harmless virtual universes, young women (or men!) are now revealing attacks that can be very traumatic.

However, the law is still hesitant. For example, if there is no body of flesh and blood but an avatar, can we speak of rape in the sense of the penal 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 is sometimes pushed to the limit for victims wearing virtual reality helmets, urgently requires more protection for both the youngest and the young. Let’s also remember that the increasingly thin line between real and virtual is likely to lead to increasingly violent acts that are increasingly difficult to control.

With NFTs, a new phase in the virtual revolution has begun. He’s probably being talked about, for better or for worse. Unless he collapses on himself, victim of an extreme void.