【英語学習　NFT】VIRTUAL ART AND NON-FUNGIBLE TOKENS　仮想芸術と非代替性トークン

参照元：VIRTUAL ART AND NON-FUNGIBLE TOKENS

ABSTRACT

Fueled in part by the wealth recently created from digital currencies, major art dealers such as Christie’s and Sotheby’s have embraced the sale of non-fungible tokens attached to unique digital works of art. What are non-fungible tokens, how is this related to the blockchain and what do we know about this rapidly evolving market for digital art? It appears that digital art can be added to the growing list of uses for blockchain technology now becoming a part of modern life.
This article proceeds in seven parts. First, is a discussion about the new and explosive market for
digital art. Second, I explore the evolution of the digital world and virtual property. Third, is an
explanation and historical account of the blockchain and virtual currencies. Fourth, is coverage
about non-fungible tokens. Fifth, is a brief look at unresolved issues impacting the law of NFTs
and potential solutions are provided. Sixth, are a few thoughts about the future of digital
property. And last, I conclude.
This dramatic extension of blockchain and other digital technology to the world of art and music
represents a new and exciting platform for creative expression. I believe this paper offers a
valuable addition to the literature by providing a readable introduction and overview of what is
now known about the likely impact of blockchain technology and non-fungible tokens to music
and art. This important development should have a significant impact on the future of innovation
and property law.
Keywords: art, Beeple, bitcoin, blockchain, Christie’s, climate, collectibles, Coin Desk,
copyright, crypto asset, cryptocurrency, CryptoPunks, crypto-theft, digital art, ethereum,
intangible, intellectual property, law, music business and publishing, Nifty Gateway, nonfungible tokens (NFTs), online payment systems, ownership, possession, property law, Second
Life, smart contract, Sotheby’s, synthetic worlds, token, virtual property, virtual real estate,

OVERVIEW

On March 11, 2021, Metakovan, a pseudonym, paid $69 million for a piece of unique
digital art titled “Everydays – The First 5000 Days,” and paid for it with ether, a cryptocurrency.1
With this landmark purchase fueled in part by the wealth recently created from digital currencies,
art buyers, creatives, and investors became suddenly aware of the exploding market for unique
digital art. The art world, major traditional art dealers such as Christie’s and Sotheby’s, have
embraced this new development. The underlying strange brew of cryptography, game theory,
interest in art collection, need for the creation of true unique digital ownership interests, and a
solid dose of speculative hype has now fermented into a term that has become one of the driving
law and technology stories of the year: non-fungible tokens. Also during 2021, $2.9 million was
paid “for the NFT of Twitter founder Jack Dorsey’s first tweet, which you can easily see on-line”
‘just setting up my twttr.’”2
What then are non-fungible tokens, how is this related to the blockchain and what do we
know about this rapidly evolving market for digital art? It appears that digital art can be added to
the growing list of uses for blockchain technology now becoming a part of modern life, such as:
accounting and auditing;3
agriculture;4
artificial intelligence (AI);5
business supply chains;6

carbon markets;7
commercial real estate;8
commodity platforms;9
copyrights;10 creative and
artistic endeavors;11 economic planning;12 elections;13 fiat money;14 financial services and capital
markets;15 and the Internet of Things (IoT);16 just to name a few. But the application of NFTs to
art is a central application in a new direction. After all, one bitcoin is much like another. But an
NFT equivalent of the Mona Lisa is very different from the NFT equivalent of Action Comics
#1. NFT technology leverages digital uniqueness in a way that makes a new social phenomenon
possible. There is only one Mona Lisa in the Louvre: owning a copy doesn’t provide the same
thrill.
This article proposes that pent-up demand for true digital uniqueness — collectability —
will drive the online market for NFTs to survive the current crypto-crash. Values for digital art
will be down in the short term, certainly, as people absorb paper losses from paper gains. But if
we mean to say — as we do mean to say — that the technology will be more than a flash in the
pan, it is worth delving into the roots of the demand for online uniqueness. The demand for oneof-a-kind art has roots as firmly planted online as off, and showing that the demand for digital
collectibles has long driven economies in online environments and virtual worlds will help
ground the inevitable discussion over whether NFTs are merely a fad or a phenomenon.
Our thesis is simple: We believe humans value rarity and uniqueness particularly in a
social context. When it comes to art, the value that humans attribute to uniqueness is tied to the
strength and breadth of communities that gather around the art, that admire it, value it, and
provide social value to those who collect, support, and enjoy it. Collecting art is social. This
article will establish that where strong social bonds form online communities around items,
whether a community of admirers of Banksy, or the players of an online role-playing game,
markets for unique items and arts will arise. Thus we argue that the NFT phenomenon is largely
independent of valuation of cryptocurrencies, except to the extent that those who are excited
about cryptographic token technologies are more likely to understand and value unique tokens,
and in a crypto boom, are more likely to pay eye-grabbing sums.
This article proceeds in seven parts. First, we discuss the new and explosive market for
digital art. Second, we explore the evolution of the digital world and virtual property. Third, is an
explanation and historical account of the blockchain and virtual currencies. Fourth, we explore
non-fungible tokens. Fifth, we look briefly at unresolved issues impacting the law of NFTs and
provide potential solutions. Sixth, we present a few thoughts about the future of digital property.
And last, we conclude.
This dramatic extension of blockchain and other digital technology to the world of art and
music represents a new and exciting platform for creative expression. We believe this paper is a
valuable addition to the literature by providing a readable introduction and overview of what is
now known about the likely impact of blockchain technology and non-fungible tokens to music
and art. This important development should have a significant impact on the future of innovation
and property law.

I. MARKET FOR DIGITAL ART EMERGES

On March 13, 2021, The Wall Street Journal reported a first sale of an entirely digital
work by auction house Christie’s, creating “a frenzy in crypto asset markets by paying a record
sum for… artwork that exists only digitally. Its authenticity is verified primarily because it
carries an NFT, or digital proof of purchase that is recorded on a digital ledger known as a
blockchain.”17

The NFT Gold Rush

According to Christie’s, “a cryptocurrency investor based in Singapore called Metakovan
won Beeple’s $69 million digital collage at auction ̶a sale that smashed records in markets for
both art and non-fungible tokens, or NFTs.”
18 As reported:
Metakovan is the founder of Metapurse, a crypto-based investment firm. [A
spokesman for Metkovan known as] Twobadour said that their fund outbid
dozens of rivals over the course of the 15-day online contest to win Beeple’s
pixilated amalgamation of irreverent drawings and fantastical landscapes that the
artist combined into a single collage called ‘Everydays: The First 5000 Days’…
NFTs are all the rage now, but Twobadour, who spoke on Metakovan’s behalf
as the fund’s steward said he and his partner have spent the past several years
focused on amassing what might be the world’s biggest collection of tokenized
collectibles and art, worth nearly $120 million combined, with Beeple serving as
its star. Four months ago, the fund paid $2.2 million for a different set of 20
Beeple works on the online marketplace Nifty Gateway…
The artist [Beeple], whose real name is Mike Winkelmann, is known for
completing a new work each day for the past 13 years and counting… Metapurse
has been able to scoop up Beeple’s works at such high prices because Metakovan
was an early investor in cryptocurrencies, starting around 2013… After buying
that previous set of 20 Beeple works in December [2020], they bought land in
digital gaming spaces and built museums to display the images before minting
tokens off the virtual experience they created. An initial 1.6 million tokens of
B.20 were sold at 36 cents apiece. By [March 12, 2021] the cost of one token had
risen to $16.35, giving the tokens a collective worth of 163.5 million, according to
Coinmarketcap.com.19

Reports document that just a month before, digital art depicting “Donald J. Trump
facedown in the grass, covered in words like ‘loser,’ sold for $6.6 million, a record for a nonfungible token, or NFT… Fittingly, the image was paid for in Ethereum, a form of
cryptocurrency that, among millennials, is almost as well known as Bitcoin.”20 Although U.S.-
centric, The New York Times provides a potential explanation for this phenomenon by observing
“Rather than elbowing past one another for reservations at the latest restaurants… or getting into
bidding wars for apartments at 740 Park Avenue, they are one-upping one another in online
auctions for jewelry, watches, furniture, sports cards, vintage cars, limited-edition Nikes and
crypto art.”21 A Christie’s spokesperson indicates their shift in strategy “ahead of the NFT boom,
but the sudden popularity of the digital medium indicated that the art world was primed for an
overhaul. ‘People are collecting art differently now, and it’s time for some radical changes.”22
Exhibit 1 depicts an image of Beeple’s EVERYDAYS: THE FIRST 5000 DAYS, 2021.23
Evident now, “The art market, coming off a pandemic year marked by sluggish sales,
also sees an opportunity to cozy up to a largely untapped audience of crypto-millionaires.”25 The
Wall Street Journal reports:
Christie’s is capitalizing on the momentum by reorganizing its sales in May in
part to appeal to millennials and cryptocurrency investors who want more
emerging art and NFTs, the house said. Instead of labeling its two biggest sales by
their artistic styles ̶ like impressionist-modern and postwar-contemporary ̶
Christie’s will slot its offerings by time frame, specifically the 20th century and 21st
century.26
Bids from more than 30 were received, resulting in a winning offer of “350 Ether, or
about $560,000.27 Accordingly, Mr. Roose writes, “I listed it on Wednesday morning, and before
I went to bed that night, the top bid had risen to more than $30,000. When I woke up the next
morning, it was $43,000. In the final hour of the auction… a bidding war broke out.”28 Bids from
more than 30 were received, resulting in a winning offer of “350 Ether, or about $560,000. A
few minutes later, after the auction platform had taken its cut, nearly $500,000 in cryptocurrency
landed in my digital wallet.”29 Exhibit 2 is an image of Mr. Roose’s winning art. Mr. Roose
reflects:
Some NFT collectors believe that owning early, prominent crypto-tokens, will
eventually be like owning rare, first-edition books or priceless paintings. [NFT
collector] Mr. Ouyang admitted that the value of my NFT was ‘still highly
speculative and subjective.’

But he said he believed that NFTs and other
blockchain-based technologies would ultimately reshape the entire media
landscape, allowing creators to reimagine how they create and monetize their
works.
This particular NFT from The New York Times is one of the answers and
will become a historical landmark in this inevitable movement,’ he said. ‘That’s
why I think it is valuable.’30
On May 28, 2021 we read about historical documents of interest being monetized
by the University of California at Berkeley. According to The New York Times, UC
Berkeley’s plan is to “auction the first of two digital art… NFTs. The object being
offered is based on a document called an invention and technology disclosure. That’s the
form that researchers at Berkeley fill out to alert the University about discoveries that
have the potential to be turned into lucrative patents.”32 Originating in 1996:
The title of the invention… is ‘Blockade of T-Lymphocyte Down-Regulation
Associated with CTLA-4 Signaling.’ The University hopes that potential bidders
will be attracted to an early description of a revolutionary approach to treating
cancer developed by James P. Allison, then a professor at Berkeley. He found a
way to turn off the immune system’s aversion to attacking tumors and he showed
that it worked in mice.
That advance eventually led to the creation of Yervoy, a drug for the
treatment of metastatic melanoma, and Dr. Allison, who is now at the MD
Anderson Cancer Center at the University of Texas, shared the Nobel Prize in
Medicine in 2018. Thus, the Berkeley disclosure form could be thought of as the
scientific equivalent of Mickey Mantle’s rookie baseball card – a memento of the
beginnings of greatness. ‘I think of it almost as a history of science artifact,’ said
Richard K. Lyons, the chief innovation and entrepreneurship officer at Berkeley.
‘Imagine somebody saying, ‘I want to own the NFTs for the 10 most important
scientific discoveries of my lifetime.’” A 24-hour auction of the NFT of Dr.
Allison’s invention disclosure will take place as early as June 2 [2021] using
Foundation, an NFT auction marketplace that uses Ethereum, the cryptocurrency
network of choice for NFT collectors.
Eighty-five percent of the proceeds will go to Berkeley to finance
research, the remainder to Foundation. If the piece is later resold, Berkeley will
receive 10 percent of the sale and Foundation 5 percent. Because the making of an
NFT requires a lot of computing power, part of the money the university earns
from the NFT sale will be used for carbon offsets to compensate for the energy
consumed, Berkeley officials said. The second NFT that Berkeley plans to auction
in the coming weeks will be the disclosure form describing the CRISPR-Cas9
gene editing invention by Jennifer A. Doudna, a professor of molecular and cell
biology at Berkeley. She shared the 2020 Nobel Prize in Chemistry with
Emmanuelle Charpentier of the Max Planck Unit for the Science of Pathogens for
their work on technique.33

History of Digital Art

Christie’s provides a history of digital art, “dating back to the 1960s. But the ease of
duplication traditionally made it near-impossible to assign provenance and value to the medium.”
During November 2018, Christie’s first transaction of this type took place, “when it registered
the entire 42-lot Barney A. Ebsworth Collection of 20th
-century American Art on the Artory
blockchain. The collection totaled more than $322 and marked the first time an art auction at this
price level had been digitally recorded.” Robert Alice’s Block 21 was offered by Christie’s
during October, 2020, “as part of its Post War & Contemporary Art Day sale… The first work of
art with an embedded NFT to be offered at a traditional auction house, the lot attracted nontraditional bidders and crypto enthusiasts alike ̶and sold for almost 11 times its low estimate.”34
Christie’s states:
The recent introduction of Non-fungible tokens (NFTs) and blockchain
technology has enabled collectors and artists alike to verify the rightful owner and
authenticity of digital artworks. EVERYDAYS: THE FIRST 5000 DAYS will be
delivered directly from Beeple to the buyer, accompanied by a unique NFT
encrypted with the artist’s unforgeable signature and uniquely identified on the
blockchain.35
Additional transactions taking place before the Christie’s $69 million Beeple’s sale are
reported by financial journalist Jason Zweig who notes, “In February [2021], an NFT
representing the Nyan Cat video meme, which looks like a feline Pop-Tart dragging a rainbow
through outer space, sold for more than $500,000. A video NFT of LeBron James dunking a
basketball sold for $208,000.”36
Rapid technological changes brought about by significant product developments such as
the Gutenberg Press often help facilitate Renaissance-like artistic creativity. The Gutenberg
“formation of the printing press in the fifteenth century paved the way for mass production of
texts and images. With new communication capacity being enabled by this technological
advancement, the widespread of material and intellectual exchange becomes possible.”37 Inmodern times, “many of the working approaches used by digital artists can be traced back to the
early days… of computer development. Since the emergence of the World Wide Web in the
1990s, a diverse variety of opportunities were further opened for visual arts with seemingly
infinite permutable dimensions.”38 Bo Xing attributes the emergence of digital art to three
primary factors:
Firstly, it is such a common practice for artists, in particular young professionals,
to use a wide range of media arts for creative purposes, producing static/dynamic
images, as well manipulating sound tracks and text scripts;
[S]econdly, digital art is not an isolated practice, divided from other forms of arts.
It is essentially a methodology that incorporates all types of interconnections with
other art exercises together with other manner of presentations and enquiries,
illustrating that we are witnessing and experiencing a new wave of creative
revolution; [and] [L]ast but not the least, it is worth noticing that an army of
digital artists are now working in numerous industries shoulder to shoulder with
hardware and software practitioners at the forefront of innovation.39
Just as in the physical world, the advent and growth of the electronic social spaces, from
games like World of Warcraft to blockchain-based environments like Decentraland, to the social
bubbles of Twitter have fostered a need for online value, both in terms of currency and payment,
and in terms of unique digital assets to hold that value. Paying fungible currency–dollars–for a
unique creation–art–is a loop we have not yet experienced in the present economy. Our
economies remain half online, half off. While current laws and the scope of regulations struggle
to keep up with rapid technological change, policy makers and criminal enforcement officials
face significant new challenges.
According to Harvard professor Jonathan Zittrain and researcher Will Marks, in sum, an
NFT’s “first buyer is getting three things: the warm feeling that may accompany financing an
artist; the pride that comes with claiming a relationship to a digital artifact and its creator; and
perhaps most tangibly, an asset that can be traded…”40 Consider:
The buyer is not, however, acquiring that they alone can use. In the physical
world, if you purchase a candy bar, you can’t give someone a piece of it without
losing a few bites of your own. That makes your freedom to take a bite valuable,
because the bar has only so much chocolate.
By contrast, an NFT buyer is not purchasing a work, but rather a publicly
available token that links to a work. For example, for a digital picture, the token
may be a unique number and a link to a copy of the picture, hosted on a service
such as IPFS. The token itself is visible to all, as is the work to which it points, so
anyone else can look at the work and download it. And most NFT transactions
don’t purport to convey copyright or other intellectual-property interests
regarding the work in question, so owning an NFT tied to an animation of, say a
flying Pop-Tart cat doesn’t put you in a position to use that animation any
differently than someone who hadn’t bought it. You have only a token that is
hosted publicly online, ‘registered’ as assigned to your digital wallet rather than
someone else’s. If you orchestrate your wallet through an app, the app might
present you with a handsome visual trophy case listing the NFTs that you’ve
purchased. (As you can see, we’re having to reach to describe unique value..)
41
Christie’s announced the sale of works made during the mid-1980s by Andy Warhol that
were recovered from obsolete floppy disks during 2014. These five original Andy Warhol works,
existing previously only as digital files “will be brought to life again as 1 / 1 NFTs… They are
being offered for sale individually by Christie’s on behalf of the Andy Warhol Foundation for
the Visual Arts established by Warhol.”42 The online sale ran on Christie’s website from May 19,
2021 to May27th.43