For the past two years, non-fungible tokens (JNF, or NFT in English) have seen a spectacular cultural boom. These tokens linked to a digital file by a “smart contract” and registered on the blockchain (computer protocol considered inviolable) as a guarantee of authenticity, have made it possible to value digital artworks, hitherto difficult to sell because they were infinitely reproducible. Other JNFs have been used to market digital copies of physical works: paintings, sculptures, etc.
Market stars such as Jeff Koons, prestigious museums such as the Uffizi in Florence, the British Museum in London or the Hermitage in St Petersburg, major auction houses such as Christie’s or Sotheby’s and intermediary platforms have started issuing and selling such tokens. According to the website NonFungible.com, the artistic JNF sector would thus have represented a worldwide sales volume of nearly $2.8 billion (or euros) by 2021, revealing a real speculative refugee.
Since then, this market has experienced rather bearish trends in the first half of 2022. “it is very likely that these use cases will persist and evolve over time”, estimates a report from the Supreme Council of Literary and Artistic Property (CSPLA), affiliated with the Ministry of Culture, to be public on July 13. According to him, “Ultimately, it concerns all sectors: from graphic arts to film, from publishing to music, both the private sector and the public sector”.
“While JNFs have tremendous potential, they are not without risks and vulnerabilities for authors and rights holders, as well as consumers,” immediately underline the rapporteurs, Jean Martin, lawyer at the Court, and Pauline Hot, requesting party to the Council of State, who have heard about sixty experts. They invite the government “to secure the use of this technology to encourage the most virtuous use cases that will have the vocation to persist beyond the speculative phenomenon”.“The first identified risk is:the many scams that accompany each speculative phenomenon: scams, fraudulent transactions, sale of “empty” JNFs, misappropriation of wallets. »
Difficult to accurately qualify from a legal standpoint, the JNF can be considered, according to these authors: “a proof of ownership on the token, to which other rights to the digital file can be linked”. “Such digital files remain subject to copyright and related rights, unless expressly contractually agreed”, the two rapporteurs insist. On May 31, some twenty major foundations or estates of artists, including those of Matisse and Picasso, had in fact denounced in a joint text that “non-fungible tokens are increasingly being used to market digital copies of works” (…) often without the help of the artist or his successors in title”. This is especially during resale “from JNF in the secondary market that the risk of copyright infringement is greatest”add the reporters.
Develop a charter of good practice
Even if it is a work that has fallen into the public domain, the commercial exploitation of the image must ensure that the “moral rights of the author” are respected, the CSPLA’s reporters specify that the development of a “charter of good practice” for platforms issuing JNFs.
Another proposal, this time to stop the spread of counterfeits: “setting up third-party checkers of the content associated with the JNFs exchanged on the blockchain”. The rapporteurs also ask that the “JNF to be integrated into the European reflection on the harmonization of the fight against money laundering and terrorist financing” which thrives mainly thanks to the opacity of cryptocurrencies.
Finally, the highly energy-intensive side of blockchains, which consume a few tens of TWh per year, which corresponds to the electricity consumption of entire countries (between one and three times that of Denmark), is another problem at the time of global warming. earth, notes The Report. However, he notes that switching to other systems could make it possible to reduce this disastrous carbon footprint in the future and therefore advocates “the environmental example of innovative JNF projects supported by the government”.
French museums expected
When assessing initiatives implemented in the fields of art, heritage, music, film, audiovisual, books or photography, they first consider that the production of JNF represents a particular source of income, although difficult to assess. She can “enable through participation mechanisms or joint funding to support certain cultural projects”, judgments on the rapporteurs, but also “to reach a new audience and (news) amateur communities » by means of “more playful use” such as collectibles.
French museums have so far been on the sidelines as a precaution. However, the report finds that “the risk of such an attitude is missing the strategic positioning of cultural institutions in the metaverse” (1)whose early creation of JNFs intended for display in digital museums could be a first step”. He recalls that on April 24, 2022, the President of the Republic stated in an interview with specialist media The Big Whale that he was in favor of development by major public cultural institutions. “of a policy in the field of JNF, e.g. through the promotion, dissemination and protection of twins or variations (note: digital reproductions) of their physical collections. And he wanted to launch a collective reflection on “what would be a dematerialized museum of the history of France”.
The CSPLA report thus advocates: “the implementation of progressive experiments”, for example with a player such as photo agency RMN and external service providers, both for acquisitions of JNF linked to recent digital works and for the production of JNF linked to works from public collections. With the key “a guide to operational recommendations”.