NFT – what is it about, law, examples

What is NFT? What legal issues should be considered? Is there a revolution in the alternative investment market?

NFT – what is it?

NFT means “indefinite token” or “non-exchangeable token”.. What does this mean? Simply put, NFT is a collection of records that are unique to a given blockchain network and cannot be replaced by anything else. This property makes NFT almost a work of art, and more and more people looking for alternative investments are interested in this phenomenon. That’s right? What are the prospects for the oil market? Does the law keep pace with the development of technology? The answers are given by Adam Ziębicki, a lawyer for Chałas i Wspólnicy.

To better understand exactly what NFT is, it is worth quoting an example – using cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH) or others, we can convert one BTC to another BTC and so on. can be exchanged for bitcoins in a ratio of 1: 1. In the case of NFT, it is not possible to do so, because there are no similar copies or copies other than a certain NFT.

NFT is a digital record that represents a given value and can only be bought and sold in a blockchain of a particular cryptocurrency. The most popular blockchain that offers the ability to list and purchase NFT is the Ethereum network. The most popular service that allows the above is OpenSea (as well as others like Mintable or Rarible), access is free, and anyone can check and own which NFTs are offered at a given time.

“NFT is not just a graphic for the 21st century” is not a work of art. One of the websites operating in the Tezos cryptocurrency blockchain offers the opportunity to buy music NFT, for example, a collection of historical materials from Whitney Houston. In turn, the creators of memcoin of “Dogebonk” announce the creation of a website that will provide NFT sales in the form of memes. Interestingly, Facebook and Instagram also intend to give users the opportunity to create, display and sell NFT, but at this stage we are doing it. There is no detailed information on what it will look like and on what blockchain it will be based. The potential of NFT is unlimited and really everything depends on human creativity. I think we are witnessing the development of a large market. potential that will be included (or already included) by leading players and is worth watching closely, ”commented Adam Ziębicki, a lawyer for Chałas i Partners.

Let’s look at a few more examples. An Indonesian student recently sold photos he took over four years as NFT. One of the restaurants in New York announced that only the owners of the fish (“Flyfish Club”) exhibited by NFT will be allowed to enter. Another interesting example of NFT is the “Ether Rock” collection, where you can buy NFT, which represents only a stone that differs in its shades. Not to mention the Bored Ape Yacht Club, where you can buy NFT with bored monkeys. The latter was dreamed of by celebrities like Jimmy Fallon, Steph Curry, Snopp Dogg or Mark Cuban, who were willing to pay hundreds of thousands of dollars for an NFT.

Oil market and law

“Currently, the oil market is unlimited and basically everything can be sold as NFT. However, this does not change the fact that there are a number of legal factors that must be taken into account. First of all, it does not mean the sale of NFT. Other intellectual property rights remain with the developer and the buyer only receives a certificate confirming the acquisition of the work and the right to display the specific work. Please refer to the rules of the website where the NFT information was purchased. There are no legal rules. However, this may change in the future, as even such a change was made in 2021. Law on Combating Money Laundering and Terrorist Financing According to the text of the Act, cryptocurrency exchanges operating in Poland from November 2021 should be recorded in the register of activities in the field of virtual currencies There are no such rules, but it is quite reasonable to expect that they will be established at the EU level at some point, ”Ziebicki added.

In addition to legal issues, there is an issue related to the correction of the cryptocurrency market. In order to own a certain NFT, you have to pay an appropriate price for it, expressed in a certain cryptocurrency, so its price has a significant impact on the whole project. So you can save very quickly and lose a lot of money.

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