If you’ve had anything to do with digital arts, digital assets, or both, in the last few months, it has been virtually impossible to escape the barrage of news about how nonfungible tokens, or NFTs, are changing the game for creative industries. From Kings of Leon dropping their new album as an NFT to digital artist Beeple closing a Christie’s auction with an eye-popping price tag on a piece of his work, the trend has been unfolding at a staggering pace.
Many believe that NFTs are not merely a flashy new medium for artistic work but a vehicle that can generate new efficiencies and redefine relationships between creators, their audiences, and traditional executives and of the music and arts industries.
Better management of intellectual property rights and streamlining the distribution of royalties are among the most frequently invoked use cases. Established copyright management bodies, such as the Italian Society of Authors and Publishers, are joining the movement and heading in the direction of blockchain IP registries, while musicians are putting shares of their work up for sale for investors to profit from the records’ subsequent commercial use. How viable are these solutions, and what roadblocks can their champions run into?
The quest for authenticity
One of the key challenges that the creators of digital content face is the ease with which a perfect digital copy of their creation can be produced at virtually no cost. Because a digital image or soundtrack can be instantly copied and distributed an infinite number of times, it’s challenging for creators to track how and by whom their work is used and, accordingly, to benefit from this usage.
NFTs’ main value proposition is that by creating a unique, blockchain-backed record of each unit of creative work, they can not just encode the sense of its authenticity and scarcity but also enable artists to lay down and enforce the rules around copyright transfer, usage and monetization. G-J van Rooyen, co-founder of blockchain content protection firm Custos Media Technologies, commented to Cointelegraph:
“First, NFTs allow us to securely trace the transfer of rights — in the same way as a Bitcoin payment securely traces the transfer of funds. Second, NFTs can provide perpetual support to creators. For example, an NFT could specify that creators should be rewarded each time an asset is resold at a higher value.”
Specifically, one notable improvement over the traditional world of IP rights protection that NFTs offer is automatic enforcement. Daniel Daboczy, CEO of technology firm Technicorum Holdings, explained to Cointelegraph that by leveraging the smart contracts that lay at their core, NFTs can empower artists to distribute royalties and protect intellectual property without having to seek legal recourse and enforcement.
In many cases, however, the relationship between smart contract-powered technology and existing legal frameworks can be less than straightforward.
What do NFT owners really own?
In most cases, ownership of an NFT does not entitle a person to ownership of the underlying work by default. Rather, it can be viewed as a digital certificate attesting that they own a unique, collectible version of it. Burr Eckstut, special counsel at law firm Covington & Burling LLP, further explained to Cointelegraph:
“NFTs are different from digital content in that there can only be one holder of a given NFT at a given time. NFTs do not, however, typically ‘contain’ the digital content and might not be linked to digital rights management technology that would prevent copying the digital content. The link between the NFT and content may even just be conceptual, but it can still have value as long as the NFTs are scarce.”
Gunther Sonnenfeld, CEO of digital ownership solutions provider RAIR Technologies, noted to Cointelegraph: “There’s really no intellectual property rights protection without digital rights management.” On its own, an NFT is merely a serial number, and an additional layer of functionality must be put in place in order to allow people to reshare the underlying asset while making sure that both the creator and the sharer get their cut.
There are different aspects of the creative work’s usage that NFTs’ smart contracts can be programmed to control. Perhaps the most rigorous option is gating the very ability to access the encoded content. William Honaker, IP and patent attorney at law firm Dickinson Wright, told Cointelegraph:
“If the NFT controls access, then it will enhance copyright protection. If the work is protected against copying and redistribution through the NFT and access is by, for example, a one-use code to view, then it would be protected beyond copyright.”
NFTs can also be used as licenses, whereby those who purchase them acquire the right to use the content for commercial or other purposes, but they do not get the ownership right.
Royalties and fractional ownership
In today’s creative industries, the bulk of value generated from digital art goes to intermediaries such as record labels and distribution platforms. Thanks to blockchain technology, the balance of economic power in this realm can soon shift in a direction more favorable to creators.
Gaurang Torvekar, CEO and co-founder of blockchain-powered workflow platform Indorse, told Cointelegraph: “Along with immutable proof around ownership and provenance of the assets, NFTs also make it possible for the buyers to have fractional ownership of them.”
This mechanism allows for unprecedented flexibility in terms of how copyright is leveraged. Edmund McCormack, founder and CEO of crypto-focused education platform Dchained, spoke to Cointelegraph on the matter:
“If a song is created by a group of artists and registered on the blockchain in the form of an NFT, each of them can claim a relevant fraction of this token, be it 90% or 1%. To gain profits for their creation, they can issue licenses as NFTs as well and sell them to interested parties while remaining the owners of the piece. Moreover, they can sell fractions of their rights to their followers and thus gain investments directly.”
Sonnenfeld added that he expects a variety of NFT-based monetization models beyond royalties to emerge as the market matures. These could include licensing, preferred subscriptions and data redistribution through proper identity management.
Relationship with copyright law
The legal side of many of the processes described above remains fuzzy, as the introduction of NFT-based mechanisms for IP rights management will have to be reconciled with the protections and enforcements that exist under current copyright law.
According to Lokesh Rao, CEO of NFT-based protocol Trace Network, recognition of asset ownership still must be agreed upon in the court of law, and unless NFTs are recognized as equal to a paper or digital certificate, the scope of implementation of this concept will be limited to digitally owned and consumed goods.
D’vorah Graeser, CEO of AI patent search tool KISSPlatform, commented to Cointelegraph: “The biggest bottleneck is that nearly all IP rights are registered rights — meaning that the rights holder needs to register with a government entity. This creates a public record in case of later questions or a dispute. It would be hard to create a similar situation with NFTs that all parties — specifically businesses holding the rights and the court system — could agree on.”
Graeser added that such reconciliation is not impossible, and ultimately some combination of NFTs, legal agreements and court enforcement would be very effective.
Covington & Burling’s Eckstut brought up a handful of other potential legal issues that could emerge in relation to securing copyright interests via NFTs. One is related to the “first sale doctrine” that generally prevents copyright owners from restricting (and therefore benefitting from) further sales of physical copies of their works — something that NFTs can potentially enable creators to do. Another concern is that, under current legislation, United States copyright can only be transferred using a written instrument — a standard unlikely to be met with the transfer of a digital token.
In sum, it’s apparent that incorporation of NFTs into the business of copyright protection on a large scale will require some years of court precedent, as well as modification of codes and statutes that govern intellectual property law.
While technological solutions related to IP rights protection have existed in the blockchain space for years, most commentators who spoke to Cointelegraph on the matter agree that overall, the NFT sector is in the early days of its journey toward taking over the copyright arm of the creator economy.
W. Sean Ford, chief operating officer of blockchain platform Algorand, opined that the technology needed to power these assets and the economies being built around them must cater to a very specific set of needs, listing them for Cointelegraph:
“Simple tooling to create and launch NFTs, strong smart contracts to leverage NFTs for more complex applications, immunity to forking to ensure the original creation can not be replicated, low transaction fees for healthy participation, scalability to support billions of creative assets, and a low carbon footprint for sustainability of the communities these assets serve.”
Currently, a major issue is the fragmented landscape of NFT platforms designed to deliver royalty payments to artists. According to McCormack, royalty payments, in many cases, are only applicable to purchases on each separate platform. Yet, he noted that protocols offering scalable solutions are already emerging: “EIP-2981 could enable content creators to incorporate smart contracts, which automate the royalty payment process, directly into the NFT. The result would be that artists can receive royalties regardless of where the customer purchases the NFT.”
There is not much room for doubt that nonfungible tokens hold the potential to eventually upend the incumbent models of intellectual property rights management in creative industries. Yet it is also true that the integration is going to be neither seamless nor instantaneous, as multiple tensions that exist between the old systems and the NFTs will have to be resolved.
TrustSwap Launchpad hosts token offering for RegTech platform Sekuritance
Sekuritance, a CeFi/DeFi ecosystem delivering compliance, regulatory, transaction monitoring, and identity management solutions, is collaborating with TrustSwap, a full-service blockchain asset platform, to support the execution of its SKRT token offering starting on May 8th, 2021 at 9:00 AM PST.
The cryptocurrency economy has taken the world by storm and it is here to stay. Just like traditional finance, the risk of fraud, misuse, abuse also exists in the crypto space. Due to the decentralized and semi-anonymous nature of blockchain, these factors can be compounded resulting in hesitation of adoption by financial regulators and banking institutions. While there may not yet be a bulletproof solution, there are ways to mitigate risk and potential losses, and blacklisting.
Most people who are active in the DeFi space are also using some form of traditional banking service (credit cards, bank accounts, mortgage/insurance payments, retail commerce, etc.). When crypto proceeds start moving between these realms, the banks and regulators want to know where the money came from, whether it has been declared or taxed effectively, whether it has passed through unauthorized darknet services, and so many more questions needing specific answers. In the event that any of the above questions result negatively, the traditional finance ecosystem is most likely to reject the onboarding or the use of those proceeds to pass through their networks.
The Sekuritance RegTech Suite addresses this by making available specific services and modules to address the various regulatory and compliance requirements.
Sekuritance recognizes that there are many jurisdictional challenges in the RegTech niche so, rather than competing with other software-as-a-service providers in the RegTech industry, they are invited to make their API offerings available also through the Sekuritance Partner Marketplace so that merchants and individuals around the world can enjoy an All-In-One RegTech Gateway.
The Sekuritance ecosystem is comprised of 8 main products:
1. Sekur.Vault (Data Tokenisation Vault)
Sekur.Vault is a unique omni-vault, audited to the highest level of industry security standards and tweaked to not only store what is commonly referred to as “Rubbish In, Rubbish Out” but to add value to the output upon retrieval by cross-consumption of the other Sekuritance modules such as BIN checks, KYC checks, AML checks and more.
The platform’s robust and simple to use API set and dedicated user interface allows the secure storage of Card Data (Debit, Credit, Alternate); Crypto Wallet Private & Public Keys; Sensitive Personal Data; Confidential Corporate Data; KYC, KYB Related Data; Transaction Data for BI and AI and more.
2. Sekur.MFA (Multi-Factor Authentication)
This omni-auth module caters primarily to 3D Secure services for the traditional card payment industry. Development has also started for an on-chain decentralized identity management and claiming process. Our own unique acquirer-agnostic 3D Solution allows merchants to validate and process 3D checks (both versions 1 and 2) before taking payment.
3. Sekur.Connect (RegTech Marketplace)
The Sekuritance RegTech SekurSuite platform is a powerful toolkit on its own but trying to stay ahead of all the global jurisdictions, updates to regulations and policies, AML guidelines, etc. is a mammoth task. So, rather than try to outsmart all the other valuable and recognized players in the industry, Sekuritance is creating a RegTech marketplace where software-as-a-service providers and developers can showcase their solutions and participate in the SKRT token economy.
Sekur.Alert functionality connects to specialized datasets to help keep our customers safe and help them ensure that they are doing business with wallets and identities of good standing. To help grow this dataset, the crypto community is invited to report any fraudulent activity to Sekuritance so that the whole community can be better protected. Every new unique and verified report gets to participate in the SKRT Loyalty and Reward program.
KYC, KYB, KYT, AML, Sanction Screening, and other rule engine applications are all available on the Sekuritance platform. Businesses and institutions can use these tools to identify who customers are and their eligibility for specific product offerings. They can use the Sekuritance RegTech platform to get transaction and IP “Risk Scores” and sub-scores as well as other data in order to prevent fraud and abuse.
The anonymity of cryptocurrencies is a myth. Very few mixing services can outwit modern de-anonymization technologies for Bitcoin tracking and other cryptocurrency alternatives. No one has a clear understanding of how fast the RegTech niche will be evolving but one thing beyond question — regulation of the cryptocurrency space will tighten and all will have to accept the new rules and play by them.
Sekuritance strives to become one of the leading vendors of RegTech solutions for the crypto and fiat industry and believes that the openness of financial data on blockchains will be a driver for regulatory institutions to reinforce control. With a powerful blockchain analytics toolset like Sekuritance, regulatory bodies could end money laundering and make financial reporting easy and transparent.
The Sekuritance Sekur.Certify Blockchain Wallet Verification service allows for a user to claim controlling power certification on a particular wallet once a number of actions would have been performed, KYC & AML checks confirmed and crypto investigation on the wallet completed.
Details of Sekuritance Token Offering
The Sekuritance token offering will be executed by leveraging the TrustSwap Launchpad. Upon the successful conclusion of the offering, a Uniswap pool will be created on May 13th, 2021, and trading can commence for use of SKRT in the Sekuritance network. Alongside the offering, Sekuritance will be showcasing a preview of its RegTech Suite and Partner Platform.
TrustSwap technology utilizes secure peer-to-peer transactions via TrustSwap SmartLaunch; which ensures that Sekuritance and its community can transact securely and without fear of participants or team members negatively impacting the markets following the public offering. TrustSwap’s time-based SmartLock ensures a methodical distribution to mitigate the risk of unauthorized token transfers.
Sekuritance will use TrustSwap SmartLocks for:
- Team token vesting
- Token holder vesting
- Liquidity locks
For more information about Sekuritance visit https://www.sekuritance.com.
Shanghai Man: VeChain on TV, DOGE flips BTC volume, Hotbit hack and more …
This weekly roundup of news from Mainland China, Taiwan, and Hong Kong attempts to curate the industry’s most important news, including influential projects, changes in the regulatory landscape, and enterprise blockchain integrations.
Will DOGEmania ever stop?
Dogecoin has officially flipped Bitcoin in a few categories here in China, with DOGE trading volume on leading Chinese exchange Huobi surpassing that of leading assets ETH and BTC. On May 6th, according to CoinGecko, DOGE volume made up more than 15% of total exchange volume, whereas BTC and ETH were around 8% each. Searches for ‘Dogecoin’ on WeChat surpassed searches for Bitcoin, with 2.3 million versus 1.7 million on May 5th. Dogecoin has become increasingly appealing to the Chinese retail community since earlier this year as many are attracted to the virality and get-rich-quick potential of the colorful DOGE community.
Hacking attempt fails, but causes a major ruckus
Centralized exchange Hotbit was the victim of a hacking attempt on April 30th. The good news was that assets appear to be safe on the platform. The bad news was that user data was compromised, leading to a corrupted database. Trading, deposits and withdrawals have all been paused while the exchange attempts to restore normality. The Chinese exchange has been communicating actively via Twitter, with the interrupted service lasting potentially another week. Hotbit is well known for listing a diverse range of assets, making it a popular spot among more risk averse investors.
Shenzhen-based HOO launches Smart Chain contender
Hoo.com became yet another exchange to launch an Ethereum Virtual Machine, or EVM-based, smart chain, attempting to bridge their CeFi users into the DeFi space. The chain, currently in testnet, boasts low fees of just 0.001 USD per transaction and over 500+ transactions per second, as well as compatibility with Ethereum, BSC, and HECO. Since the start of the year, Hoo’s token has increased by over 350%. Other Chinese exchanges, including OKEx and Gate, have also launched smart chains. Smart chains are proving an attractive way to let users maximize yield while still letting the exchange capture value from the process.
VeChain on national TV
English-language and state-run business channel CGTN created a short expository video on blockchain’s growth post-COVID19. The video and article featured a close look at VeChain’s progress in developing business solutions, explaining how the technology could be applied to the food safety and infection control industry. The media company shot a short video inside the office and interviewed a few of the developers, indicating that the company has done well to comply with regulatory requirements in the tightly run country. It’s no secret that VeChain has a top position and close relationship with many government backed organizations, which is an enviable position for any enterprise Blockchain-as-a-Service provider.
Rising salaries for blockchain devs
The Beijing Human Resources and Social Security Bureau recently released the 2021 Beijing Human Resources Market Salary Survey Report (First Quarterly)”. According to the report, new and hot jobs, which included the tech space, had a median average monthly salary mainly in the $3,000 to $4,600 range. Blockchain engineers comfortably eclipsed that with a wage of $6,700 per month, showing the growing demand for the skills. By contrast, the average annual salary of a blockchain developer in the U.S. often exceeds $12,500 per month, according to recruitment firm Hired.com, nearly double the going rate in Beijing.
Miners back up and running… away?
Mining appears to have resumed as normal following the outages after a deadly coal mine accident last month. The incident required rigorous inspections of mining facilities, forcing many ASIC miners to turn off their machines. Hashrates have currently recovered to near the rates they were prior to the incident in the middle of April. One interesting shift, however, is that the industry appears to be gradually shifting from China to North America. F2Pool founder Chun Wang noted that for the first time in 8 years, more than half the BTC hashing power was coming from outside of China. This may have been partially tied to the incident, but is a trend that many experts are following as mining regulations in China appear to be growing stricter.
XRP, Dogecoin, Cardano Price Analysis: 06 May
With Bitcoin’s market dominance falling once again and the altseason gaining steam, the likes of XRP, Dogecoin, and Cardano have all appreciated significantly on the price charts over the past week or so.
XRP’s recovery since falling to close to $0.20 on the back of the SEC filing a lawsuit against Ripple Labs has been impressive, with the alt recording YTD returns of 510% at press time. Its price action over the past week, however, has been very inconsistent, with bouts of appreciation followed by sharp price falls on the charts. Even so, the cryptocurrency was close to recuperating all its losses following the depreciation on the 25th of April.
While Parabolic SAR’s dotted markers were under the price candles and underlined the bullishness in the XRP market, Awesome Oscillator gave the opposite signal, with its histogram picturing a fall in market momentum.
Dogecoin has been one of 2021’s best crypto-performers, with the alt hiking astronomically to register YTD returns of 10,800% this year. DOGE’s hike has been particularly exponential since the month of April, with the same more or less being the trend in May too. In the last week alone, DOGE has climbed by over 115% on the charts, with many expecting the popular meme-coin to continue surging at least until Tesla CEO Elon Musk’s appearance as “Dogefather” on Saturday Night Live.
The scale of its bullishness was evident when Dogecoin’s technical indicators were checked out. While Chaikin Money Flow was holding steady close to the 0.20-mark, Relative Strength Index noted a slight dip after a visit to the overbought zone.
Mark Cuban was one of the many crypto-proponents to come forward and comment on the meme-coin’s utility and purpose recently.
After a brief phase in February which saw ADA surge up the charts to lead the altseason for a time, the past few months have mostly seen Cardano trade within a tight price channel. At the time of writing, ADA was close to breaking out of the said range, while also inching closer to its previous ATH of $1.55 on the price charts.
In the last three days, ADA hiked by almost 20% on the charts.
While Bollinger Bands remained far apart to highlight volatility, MACD line was moving away from the Signal line to indicate the crypto’s latest bullish credentials.
The altcoin was in the news recently after IOHK’s Charles Hoskinson hit back at critics to comment that it’s bizarre to suggest that Cardano is a blatant scam.
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