Non-Fungible Tokens (NFTs) are a relatively new concept that first emerged in 2014 alongside early interest in cryptocurrency. They serve two purposes; the first being as a digital art piece and the second as data stored on a blockchain (digital ledger). Frenzied mainstream interest in the concept didn’t develop in earnest until early 2021 when the already flourishing NFT market exploded.
Are NFTs worth it?
Over the last year, several high profile celebrities have embraced NFTs, most recently American stars such as Serena Williams, Jimmy Fallon and Paris Hilton.
They have stoked hype behind the now widespread “Boring Ape” NFTs, which allow investors to contribute to the blockchain by buying a portrait of a stylised ape.
Their backing has stoked controversy, with many people becoming increasingly sceptical of the digital product.
To Brad Wilson, an NFT artist who works as CEO and founder of blockchain corporation NuPay Technologies, they have a host of advantages.
Speaking to Express.co.uk, he said they are often interpreted as “unfamiliar and suspect”, with most of their publicity centred on the tokes as a “space for memes and profile pictures”.
He outlined how NFTs can provide buyers with a host of privileges while streamlining art ownership.
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But while NFTs create a new means for investing in art and adding to the blockchain, they also come with a host of new considerations.
Simon Portman, counsel at law firm Marks & Clerk, outlined what legal protections people would need to consider when creating one.
He told Express.co.uk: “NFTs are potentially significant because they comprise a new and unique digital right.
“The pairing of blockchain technology with the digital watermark, as it were, which NFTs contain makes their origin of ownership identifiable and, consequently, they can’t be copied.”
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With NFTs, people are dragging the concept into a new realm, according to Mr Portman.
He said: “NFTs are new, but existing IP frameworks are being grafted onto them.
“For example, copyright or trademark rights may subsist in a tweet, film clip or virtual asset which is the subject of the NFT.
“That does not mean, necessarily, that the buyer will be acquiring rights in the underlying asset itself, and they could be in trouble if they seek to replicate, use or sell on the underlying asset itself when the smart contract does not allow this.”