On Saturday, the crypto Group Spice DAO took to Twitter to explains their plans for one of their non-crypto acquisitions.
Last year, the group spent €2.66 million ($3 million) acquiring a physical copy of the book Jodorowsky’s Dune. The book, which details the effort by Chilean filmmaker Alejandro Jodorowsky to make a Dune film in the 1970s, is indeed a rare and valuable book. Only around 10 were made, and they were distributed to producers and executives.
However, even then, the group grossly overpaid for it. With previous ones selling for around €25,000 ($28,000), their copy cost more than 100 times the going rate.
However, in their more recent tweet, the group, attempted to explain their purchase, offering details on their plans for it.
They went on to explain that they further planned to create NFTs of the individual pages and even potentially burn the book as part of a video publicity stunt.
However, following that, the group began to get a significant fact check from others on Twitter. First, several Twitter users noted that the book is already freely available online. Many copies of the book are already easy to access just through a simple search.
But the much bigger problem was that the group seemed to misunderstand what they bought. Owning a copy of the book, regardless of how expensive, does not grant them the copyrights in it. As such, any animated series or other derivative projects would likely run into legal issues.
The same is true for creating NFTs of individual pages and even burning it may be problematic. The fact that so few copies exist means that burning it may run afoul of the Visual Artists Rights Act (VARA) if the editions are signed and numbered. In other nations, moral rights may prohibit that.
In short, the group wrongly assumed that purchasing the book granted them the rights in the book itself. However, this book is no different from any book at your local library or bookstore in the rights it transfers. The only difference is the price.
Despite that, the group justified that heavily inflated price with plans that assumed they would have full rights to the book. Now they are stuck with a book that they paid far more than market value for and no clear path to recouping that cost.
The story has been a great delight to crypto skeptics and others that have enjoyed mocking the mistake.
But while mocking is predictable, the story does highlight a serious problem with the crypto and NFT space. Namely, that many people still do not understand what they are buying and often spend huge sums of money only to be left with very little at all.
A Serious Problem
As we discussed back in March of last year, NFTs are fundamentally a way to try and introduce scarcity to digital works. Since NFTs are recorded on a blockchain, theoretically, they can be limited in number. Though an unlimited number of copies of a digital image may be made online, only the NFTs minted can be sold, and those records are permanent.
However, the NFT has been beset by significant copyright issues. Much of that has come in the form of infringers creating NFTs of works they do not own. This has frustrated many artists, who have struggled to catch and remove all the unlawful NFTs created of their work.
But then there is the other side of the coin. Even with a completely legitimate NFT, there are at least some that seem to be unclear on what they are actually buying. Despite many articles clarifying what exactly an NFT is, there are still those that think buying an NFT gives them some kind of additional rights.
This is partly the NFT’s community’s fault. Crypto and NFTs have long been touted as a way to record and track copyright transfers. This is something that NFTs can theoretically do, but they haven’t been used that way much to date. In fact, the only major use of it in this way that I am aware of is Bluebox, which uses it to track royalties and rights to music.
Instead, the market has become about buying the “unique” or “scarce” NFT, often made from a widely available work. Though novel and interesting, NFTs currently lack much in the way of practical application. Because of this, they create far more copyright woes than they solve.
However, there may be a way to fix and at least one company is trying.
Adding in the Information
Safe Creative is a third party non-repudiation service. It’s an unofficial copyright registration service that primarily serves European countries, where formal registration with a government copyright office is not required, but proof of ownership is often still desired.
The approach they take to NFTs is fairly simple. In addition to creating a record of the work on Safe Creative, their service creates a link to an InterPlanetary File System (IPFS) URL. That URL points to a file that is on the distributed InterPlanetary File System that is both unalterable and cannot be deleted.
That file (see example), contains information about the work, it’s copyright and the rights that were acquired with the NFT. This is a simple and elegant way to make it clear what exactly is being bought and sold as part of the NFT as well as ensure, no matter if the NFT is resold, that the original author will always remain attached to it.
To that end, Safe Creative has solved the issue of copyright clarity with NFTs. Coupled with their registration service, they can also provide assurances that NFTs are authentic as well. The question is whether this, or any similar system, will see widespread adoption.
Is this something the NFT market wants or are those minting NFTs happy about the confusion? That is difficult to say.
However, one thing is clear. If NFTs want to enter the mainstream and become something more users not only offer but rely upon, this is precisely the kind of clarity, transparency and certainty that is required.
Despite their lucrativeness, NFTs are struggling to find mainstream acceptance. Many people simply see it as people paying exorbitant amounts of money for nothing more than a line in a digital ledger. However, those in the field constantly speak of the potential for NFTs and how they could revolutionize art.
However, those potential benefits have not really come to pass. Much like cryptocurrency itself, it’s become a way to gamble and a tool to help a select few become rich from being in the right place at the right time. The artist and copyright revolution seems to be on a permanent hold.
The truth is that solving complicated and nuanced problems like copyright and licensing are neither glamorous nor particularly lucrative. It’s much easier and more fun to make millions selling a digital novelty than it is to get down to brass tacks and sole the issues that plague rightsholders and creators.
To be clear, crypto and NFTs do have the ability to bring about some positive changes, but their current use means they cause far more problems than they solve. For most creators, NFT will remain more of a headache than a cure.