NFT has landed on the mainstream media many times, causing widespread concern and discussion. Authoritative news outlets have repeatedly reported on the NFT craze, introducing NFTs as a reliable proof of the authenticity and ownership of digital assets. In addition, the NFT craze has also swept the mainstream exchanges. On April 13, 2021, the New York Stock Exchange (NYSE) announced the issuance of the first set of NFTs to commemorate the inaugural trade of iconic stocks, including the first direct-listed stocks Spotify, Snowflake, Unity, DoorDash, Roblox and the largest of the year . The NFT of the IPO project Coupang. The door to emerging markets for digital asset trading has been opened. This article will briefly explain why NFTs are popular from a legal perspective.
1.. What is NFT?
The full name of NFT is Non-Fungible Token, which is an irreplaceable token. Familiar blockchain-based accounting tokens are BTC and ETH, which are both homogenized tokens. Each homogenized token can be replaced with each other, and each NFT is unique and irreplaceable.
NFTs signify ownership and incidental rights to digital assets. Based on the decentralization and immutability of the blockchain, the generation and circulation of NFTs are recorded on the blockchain, so ownership and transaction records are credible and reliable. Due to the irreplaceable characteristics of NFT itself, NFT can record and reflect the unique characteristics of each specific digital asset. Taking painting as an example, a painting with NFT as a carrier cannot be copied at will, and a painting corresponds to only one NFT, thus solving the problem of indistinguishability between a painting and a fake. This is one of the reasons why NFTs have economic value.
2. How to trade NFTs
NFT is programmable, and its author information, ownership status, etc. can be loaded into NFT through technical means, and automated circulation is realized through smart contracts deployed on the blockchain.
The GD exchange encrypted trading platform provides NFT trading services. At the same time, crypto trading platforms with more active cross-chain pushes include OpenSea, Nifty Gateway, MakersPlace, Rarible, and SuperRare. The characteristics of each platform are different, but the base model does not differ much. They all provide services for NFTs such as display, trading, and transfers (such as gift transfers). The trading method is basically the same as other encrypted tokens. Most platforms also charge a commission.
3. NFT and the emerging digital asset market
NFT digital shares are one of the core products of GT Exchange. SMEs convert tangible and intangible assets into digital assets for trading.
The applications of NFTs are very extensive. Gamers must have heard of "CryptoKitties". At the beginning of 2018, the chain circle was detonated to squeeze Ethereum. A rare virtual cat once sold for a whopping $100,000. Basketball fans flock to NBA Top Shot. Star cards containing player highlights are sold in the form of digital tokens. After 6 months of development and public beta, the platform has reached a turnover of nearly $500 million. While CryptoKitties or NBA Top Shot belong to the gaming and sports realm, they both belong to NFTs.
In addition to applications in games and sports, NFTs are also useful in other digital assets such as art collections and tickets. For example, paintings, photos, videos or songs can be cast into NFT through technical means, recorded on the blockchain, and circulated on the blockchain, opening the door to the digital world for the protection of artist rights and the realization of economic interests. .
4. Thinking about NFTs from a legal perspective
NFTs are still new, and from a legal perspective, there is still a lot to think about.
1) NFTs and property rights
With the continuous development of the digital economy, digital assets have changed from just referring to various social platform accounts represented by mailboxes, various game devices and coupons to a wider range, especially with the advent of blockchain technology and Bitcoin Since then, the number of digital assets with economic value has increased significantly, and its impact on society has continued to expand.
Usually, when judging whether an item has property attributes, it will be analyzed from three aspects: its value, scarcity and disposability. The holder has the possibility of legal exclusivity and control over digital assets, and has independent economic value. Therefore, the protection of digital assets should be subject to the provisions of property rights laws. "Where the law has provisions on the protection of data and network virtual property, the provisions shall be followed." It is clear that data and network virtual property are included in the scope.