NFT token from a legal point of view

How is NFT different from other cryptographic tokens? The uniqueness of NFT in comparison with other tokens is well said in Wikipedia.

NFT is an abbreviation of the English word non-fungible token, which indicates the irreplaceable nature of the cryptographic token. For example, Ethereum cryptographic units are interchangeable, and NFT implemented on the Ethereum blockchain is not. However, from a legal point of view, uniqueness is not enough, as well as only the form. After all, content is sometimes crucial.

Here we come to the legal assessment of NFT in today’s manifestations. NFT, from a legal point of view, is either “nothing” (although such “nothing” can be considered as a product for which you are willing to pay) or a way to consolidate information relevant to the parties to the agreement on the disposal of works of art and rights to such works. This may be information on the subject and parties to the agreement. From a jurisprudence point of view, an NFT token can be of practical use if it duplicates all or at least the key terms of a work of art agreement.

An NFT token will be null (in relative terms) if the record does not contain any useful information about the work, the parties, or the terms of the agreement. In contrast, NFT tokens can be a form of anchoring: a) the work itself; b) the parties to the agreement in the alienation of the work of digital art; c) dates and conditions of the contract; d) any other information about the work of art, including its description.

In the current implementation, NFT is a blockchain entry with a link to the content.

When considering NFT, we must not forget the role of intermediaries. These are NFT marketplaces and “exchange” platforms. In contrast to newcomers’ perceptions of the form and formula for preserving a digital work of art, the content of NFT ≠ is digitized on a blockchain work. At least in the cases that the author of this material had to analyze, and this is, among other things, the experience of supporting the legal registration of two NFT-marketplaces. With NFT you don’t buy digital artwork, you buy a piece of code that links to a work file. The digital version of the work of art is kept by an intermediary, or even in a third-party repository. Therefore, the work to which the token is linked is not always directly fixed in the distributed cryptographic registry. In this case, the intellectual property rights to the digital artwork are retained by the author of the work.

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