The NFT Craze BY STEPHEN J. GOLDBERG, ESQ.
A R T
B R I E F
The digital artist known as Beeple sold an NFT for $69 million in cyptocurrency at Christie’s auction in March, 2021. The media treated this grotesque sale as if it revolutionized the art world, but if we separate reality from the hysterical hype, it clearly has not. An NFT stands for a “non-fungible token”—probably the most ridiculous acronym ever invented by digital geeks. An NFT is nothing more than a token on a shared digital ledger in the never-ending continuum known as blockchain. I’m not an expert on blockchain; however, suffice it to say, the owner of an NFT can signify his ownership by obtaining a token, or timestamp in a digital ledger that constitutes a blockchain. It’s important not to confuse ownership of an NFT with ownership of a copyright which is governed by copyright law. Common law copyright automatically attaches upon the artist’s creation of the work and statutory copyright is established by a filing with the US Copyright Office. The vast majority of the time when an artwork is sold the artist retains the copyright. The artist may also license the copyright if, for example, he or she wishes to merchandise an artwork’s image. An owner of an NFT does not own the digital artwork or the copyright that attaches to it (ownership is retained by the digital artist). The buyer simply owns the NFT of the first edition of the digital file, but nothing else. Is NFT a con? I leave it to those who have read about the 17th-century Tulip bulb craze in the Netherlands to decide. Beeple (Mike Winkelmann) had a successful career as a graphic designer of video games when he decided he would create a new digital image every day for 5,000 days. The digital file which set the record at Christie’s for a NFT contained all of those images and was titled Everydays: The First 5,000 Days. I’m not going to quibble about whether digital art itself is “art.” As far as I’m concerned, it is. The problem is that the NFT of a digital file is a digital ledger entry which does not constitute an artwork. Over the last few years NFTs have become things of value and can be bought or sold online. In fact, prior to the auction of The First 5,000 Days, Beeple sold numerous NFTs of still digital images he created, as the market for NFTs got red hot. Many of the images making up the The First 5,000 Days and other Beeple digital works are freely available to view online (featured here). A few weeks before The First 5,000 Days was sold, an NFT of Nyan Cat, a ubiquitous meme of a flying cat with a
