this post was submitted on 27 Aug 2024
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92
“Should art be regulated by the SEC?” NFT artists file lawsuit (arstechnica.com)
submitted 3 months ago by [email protected] to c/[email protected]
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[–] [email protected] 93 points 3 months ago* (last edited 3 months ago) (9 children)

This article makes my brain want to bleed.

I'll say it louder one last time for the people in the back:

THERE ARE NOT ENOUGH BITS IN ANY TYPE OF NFT TO STORE ART ON THE BLOCKCHAIN. THE BEST YOU CAN DO IS A URL WEBLINK TO THE IMAGE AND AN IMAGE HASH. THAT IS FUNCTIONALLY NOT THE SAME AS STORING THE ACTUAL IMAGE ON THE BLOCKCHAIN. IF THE ORIGINAL IMAGE GETS DELETED, THE URL AND HASH ARE BOTH EFFECTIVELY USELESS.

The art is always a completely separate entity from the NFT itself. Trying to act like this is "regulating art" is just more cryptobro bullshit.

[–] [email protected] 21 points 3 months ago (2 children)

Clearly, the answer is more blockchain. In fact, let’s blockchain the blockchain and then blockchain that blockchain to… Woo, I got carried away. What were we talking about?

[–] [email protected] 11 points 3 months ago

Don't recall... let's check the Blockchain!

[–] [email protected] 2 points 3 months ago (1 children)

blockchain where we buy hashes linking to the image library of babel.

[–] [email protected] 1 points 3 months ago

What do you mean babel? My links are on megaupload! Wait…

[–] [email protected] 13 points 3 months ago

There are currently [2] insecure techbros downvoting reality.

[–] [email protected] 5 points 3 months ago

There are a couple projects with native block chain art but as you might expect it's low resolution pixel art due to the nature of block chain being prohibitively expensive to use as storage

[–] [email protected] 4 points 3 months ago

Dude you might as well try to explain algebra to cats. When you inevitably fail then at least you can pet the cats.

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[–] [email protected] 32 points 3 months ago (2 children)

the NFT is not the art itself, it is at best a proof of ownership.

[–] [email protected] 24 points 3 months ago* (last edited 3 months ago) (1 children)

It's not even that.

There is a huge lack of insight into who owns the copyright of an NFT. This confusion likely stems from the fact that an NFT comprises two things: (i) the identifiable, non-fungible, non-replicable, and transferrable cryptographic asset recorded on the blockchain, and (ii) the creative content. The creative content is separate and distinct from the actual asset recorded on the blockchain. As such, the person or entity that created the creative content owns the copyright. The content creator continues to own the copyright, even if the NFT is sold to someone else. It’s analogous to Jeff Koons selling artwork he created—Koons can sell the art to one person to hang on their wall, but since Jeff also owns the copyright, he can sell that same artwork as an image on t-shirts.

https://bpp.msu.edu/magazine/nfts-what-you-need-to-know-to-protect-copyrights-june2022/

NFTs are literally just URLs, pointlessly stored on "the blockchain". URLs that point to servers which can be switched off at any moment.

[–] [email protected] 6 points 3 months ago (4 children)

wait, what are you even buying then?!

I thought (i) at least served as a proof of ownership for (ii)...

[–] [email protected] 16 points 3 months ago* (last edited 3 months ago)

Nope.

This is why anyone not huffing paint has stayed far away from NFTs.

[–] [email protected] 6 points 3 months ago (1 children)

No, the "non-fungibility" simply means that anyone who creates an NFT with the same link will be distinct from your link to the image, even if the actual URL is the same. Both NFTs can also be traced back to when they were created/minted because they're on a blockchain, a property called provenance. If the authentic tokens came from a well known minting, you can establish that your token is "authentic" and the copy token is a recreation, even if the actual link (or other content) is completely identical.

Nothing about having the "authentic" token would give you actual legal rights though.

[–] [email protected] 1 points 3 months ago* (last edited 3 months ago) (1 children)

yeah, I understand the tech far better than I understand the law. I thought they legally counted as a contract, i guess they're not even that.

[–] [email protected] 0 points 3 months ago (1 children)

For a contract transferring property, you need 2 parties: One offering and the other accepting. Having knowledge of a cryptographic key implies none of that.

You could get something like this done by transferring the asset to a reputable trustee. The trustee - a law firm, bank, or such - checks that the paperwork is in order and it has the necessary rights. It binds itself contractually to convey some benefit - eg a revocable copyright license - to whoever can show that they have a certain cryptographic key/control of a wallet.

The firm should regularly check if the beneficiary still holds the key. It might get lost or forgotten, after all. The possibility of losing access to the asset by theft or accident is the only thing that involving NFTs add to such a scheme, so one might as well lean into it.

[–] [email protected] 4 points 3 months ago

At best you're buying into a collective agreement of ownership among those also participating in the NFT ecosystem. You own a thing because a large enough group of people agree you own it and respect the authority of that token.

At worst you've been scammed and are trying to convince yourself the above is true and that said "large enough group" includes anyone at all capable of enforcing said ownership. Spoilers: it does not.

[–] [email protected] 4 points 3 months ago

NFTs are great for replacing things like deeds or vehicle titles, where we need paperwork to verify ownership. But the problem arises when it's cryptographically hard (meaning exceedingly unlikely on reasonable timescales) to reverse fraudulent transfers of those documents. Cutting out a centralized authority at the price of making the system more vulnerable for gullible people is almost always not worth it.

[–] [email protected] 27 points 3 months ago* (last edited 3 months ago) (3 children)

If pieces of art metadata are being traded like securities, then yes, the SEC should regulate their trade.

It should have absolutely nothing to do with the "art" associated with that metadata, it should just be regulated for what it is.

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[–] [email protected] 27 points 3 months ago

Regulating a money scam that uses art as a token isn't regulating art, it's regulating money scams.

[–] [email protected] 18 points 3 months ago

Given that the world of high art is basically entirely used by rich people as a way to launder money and dodge taxes?

Yes. It absolutely should. It should have been like 30 years ago.

[–] [email protected] 14 points 3 months ago* (last edited 3 months ago) (1 children)

The problem with what creeps like Mann are claiming comes down to the difference between “art” and buying an “interest” in art as a speculative investment. Mann conflates these two ideas, trying to bestow the wholesomeness of artistic expression with his investment business venture. I’m all in favor of getting artists paid, and structuring society in a way that encourages the production of art, but Mann wants to weaken securities regulations and consumer protections to do that. That’s a terrible idea because it will lead to many more people being conned and defrauded.

If investors were merely trying to support an artist’s work, and not seeking to profit from their investment, they wouldn’t need a securities mechanism like NFTs to do it. We already have money for that.

If a side effect of regulating NFTs as securities is to somehow damage the regular fine art marketplace, as I think Mann’s suit is warning, that is no great loss for society. The fine art market is a blight, a fraud-riddled playground for ultra wealthy douchebags to sequester wealth and does nothing to advance art or promote the creation of artworks writ large.

Mann has ridden the crypto speculative bubble and has an inflated impression of the value of his work. He’s carved out a niche as a sort of court jester for billionaires like Mark Andreesen who want to rebuild financial systems in a way that would dismantle the regulatory state and enshrine an elite class as technologically empowered feudal lords. He thinks the money is compensation for his songs, but it’s largely just a side effect of crypto bros forever trying to find a greater fool to hold the bag in a pyramid scheme. In that effort, his lawsuit is basically a marketing campaign for his investment business. I hope the court puts an end to this once and for all, but I’m not optimistic.

[–] [email protected] 11 points 3 months ago* (last edited 3 months ago) (3 children)

I thought the whole point of crypto/blockchain technologies was to avoid government regulations?

EDIT: Never mind, they're suing because the SEC declared them as securities, which the artists don't want.

[–] [email protected] 15 points 3 months ago (1 children)

"artists"

[–] [email protected] 4 points 3 months ago (1 children)

It looks like they're suing because the SEC declared them as a security, and the artists don't want them to be classed as one.

[–] [email protected] 3 points 3 months ago

I see.

[–] [email protected] -3 points 3 months ago (1 children)

I believe NFTs are actually a good idea on paper for this use case. Our implementation of the idea is weird though.

I don’t know why the SEC though. NFTs are not “money”. It’s a contract that shows ownership. It’s a legal issue in my opinion

[–] [email protected] 4 points 3 months ago (1 children)

The SEC also regulates trading in stocks, which are contracts that show ownership, just of a portion of a corporation instead of a piece of art. They're both classified as securities because they can be bought, sold and traded as investments where people can stand to gain or lose large sums of money in said trades. They work in very similar, if not identical, ways. If the NFT did not function so much like a stock investment and was just something you could buy or sell as a regular good, then the implementation would not be so weird.

[–] [email protected] 1 points 3 months ago

But can’t that same argument be used for a Picasso or Van Gogh painting? Are those also regulated by the SEC for ownership? NFTs are trade-able when it comes to art. It’s just a contract in the form of a deed of ownership at a digital layer being transferred.

If regular art which is often considered an investment and hogged by the ultra rich is also regulated by the SEC then you’re right. If it’s not then I don’t get why we treat the “art” which is owned by a NFT contract differently based on the type of contract we’d like to consider binding.

[–] [email protected] 9 points 3 months ago

I wonder how much it costs to get an advert article like that.

[–] [email protected] 2 points 3 months ago (1 children)

The only purpose of NFTs is to raise sea levels by metres and inundate every coastal city. Owning NFTs is a crime against humanity. Anyone who has ever owned an NFT belongs in prison

[–] [email protected] 2 points 3 months ago

The only purpose of NFTs is to raise sea levels by metres

So NFT's will get rid of silicon valley?

[–] [email protected] 0 points 3 months ago

"art"

If it was actually art, it wouldn't be able to be traded like a commodity. NFTs have very little artistic value.

[–] [email protected] -4 points 3 months ago

It's kind of a shame that Jonathan Mann got wrapped up in all this NFT grift. Many of his songs are quite catchy, I recommend checking him out on YouTube if you haven't already.