Protecting Creators With On-Chain NFTs

The best way to protect artists and other creators from copyright infringement is to minting their works as on-chain nonfungible tokens (NFTs). This is because on-chain NFTs store the entirely of creative works, related data, and copyright agreements on blockchain. As a result, on-chain storage makes it is easy to verify ownership.

By contrast, NFTs on Ethereum and other blockchains that do not store media on chain greatly increase the risk that creators will have their rights violated.

Background

Copyright law provides artists and other creators with strong protection against any unauthorized use of their original works such as copies or derivative works.

Copyright owners can monetize their works by selling or licensing to others. Full or partial transfers of copyrights must generally be made in writing with agreements or licenses.

Traditional NFTs Don't Protect Copyrights

An NFT is a blockchain token that has a unique ID and contains data about the art or other media it is associated with. Because NFTs are stored in blockchain wallets, the owner of a wallet owns NFTs located in its wallet.

Purchasing an NFT of a copyrighted work does not by itself give the buyer any rights to the work - not a even a right to a copy. Indeed, creating an NFT of a copyrighted work without permission is a copyright violation.

To properly transfer copyrights in an NFT transaction, copyright language must accompany the transaction. Likewise, to verify whether anyone has the right to use an NFT image online, the data in their NFT wallet must match the NFT's transaction history.

However, the problem with traditional NFTs, such as those that are on Ethereum, is that they store the different components of NFTs separately.

As a result, traditional NFTs leave creators vulnerable to infringement.

The most common type of copyright infringement with NFTs involves people minting and selling NFTs of works they do not own. This requires artists to issue takedown notices to NFT marketplaces, often after the damage has been done.

How On-Chain NFTs Protect Creators

On-chain NFTs provide the best protection for copyright holders. This is because on-chain NFTs place all components of an NFT on a permanent, public blockchain: not only the token and transaction data, but also the NFT's media file and the unique metadata (including the transaction's copyright language).

If an NFT is minted on chain by the owner or rightful user of the media associated with the NFT, then the NFT's public transaction record provides a perfect record of rightful usage. This is because the on-chain data shows the unique ID, a dynamic watermark on the media file, and the transactions for a given NFT.

For on-chain NFTs, a user can prove they are rightfully using it simply showing that the data in their NFT wallet shows them as the owner based on the NFT's transaction data. And the dynamic watermark on media means it cannot be screen captured, which makes online theft and forgery more difficult.

These benefits are impossible unless all components of the NFT are stored on chain. Media and data stored separately from a blockchain leaves a transaction record incomplete. It also leaves the media vulnerable to the control of the private database provider and not able to have its transaction history reflected with a watermark.

Minting on-chain NFTs is being enabled by ICME because ICME uses the Internet Computer blockchain. Unlike Ethereum, storing NFT files on the Internet Computer is affordable. You can log in here to get started.

About The Author

Houman Shadab is a cofounder of ICME