Whether for relevance, search, novelty or the potential to define a time, when a word gains notoriety to the point of being voted the highlight of the year by an entity with an unblemished reputation such as the Collins Dictionary, it deserves attention. This is the case of the word “NFT”, the equivalent for “Non Fungible Token”. The term refers to a digital stamp that can be associated with a photo, video or any type of digital file, a type of cryptographic token based on blockchain technology, used to represent the ownership of unique and rare digital items, functioning as a kind of “virtual registry office”.
Fungible is something that can be replaced, so these tokens or digital seals, which are electronic codes, are unique and irreplaceable. And by the law of economics, goods considered unique generate scarcity and, consequently, increase their own value.
Precisely because NFTs, unlike other cryptoactives (Bitcoin, Litecoin, etc.), have the characteristics of being unique, probably scarce and indivisible, they can have an indefinite and often very high value. In other words, while a Bitcoin has a universal value, being possible for two people to exchange bitcoins and still maintain the equity value before the exchange, one NFT is not the same as the other. At each transaction, for different reasons, the same digital asset registered in NFT can assume a different value, as it is unique.
According to the Collins Dictionary team, the term NFT has seen an 11,000% growth in its use over the past year. In addition, several NFT items were auctioned for sky-high figures during 2021, including memes like the little girl Chloe and a $69.3 million digital collage by artist Beeple, and the first Twitter post (in 2006) that earned the owner of this social network, Jack Dorsey, the equivalent of R$ 20 million.
Since NFT is based on blockchain technology, and it is immutable, traceable and proof against duplication, whoever holds the digital asset with the software code that signals the NFT will be the sole holder of that “certified” asset. In the case of a meme, for example, third parties may even continue to replicate it through copies, but even so, there will only be a single file with that certification. See that here we are facing a certification of an intellectual property, in this case, copyright.
It is important to note that there is a conflict concerning the industrial property system, since the availability of a work through an NFT does not replace procedures for registering trademarks, patents, utility models and industrial design at the Brazilian Patent and Trademark Office – BPTO (INPI in portuguese), currently practiced and defined by law.
According to the Brazilian Copyright Law, the authorship of a work comes from its creation per se, and not through its registration. The same happens with other institutes of intellectual property, such as registered trademarks. Thus, the trademark registration system adopted in Brazil is attributable to law. That is: its ownership and exclusive use are only acquired by registration, as defined in art. 129 of the LPI. In other words, the NFT cannot replace this certificate of registration, since the INPI is the competent institution to grant trademark registrations and, with the concession, assign rights to the holder, such as exclusive use throughout the national territory and the right to prevent third parties from improperly using your brand.
The choice of NFT as the 2021 word by the Collins dictionary is one more evidence of the importance of this new and promising market and of this new technology that is becoming more and more a reality in Brazil. The discussion on the subject is urgent so that there is an evolution of regulations, which meets both intellectual property rights and the digital world. NFT is a clear advantage for artists, who can sell their work on the internet more easily with this seal of authenticity.
If you are interested in knowing more about NFT and how to value your talent, please contact our office.