Licence CC-BY ou  Licence CC-Zero

Introduction

Ambition of the project 

During this transversal course entitled "Understanding digital technology: part 2" given by Mr. Yanniv Benhamou, we wanted to develop a project related to Crypto-art under the supervision of Mr. Thomas Gauffroy-Naudin. Thus, we produced a deliverable in the form of a table to present the various marketplaces of NFTs and their specificities. The goal being to easily understand the differences that can be found between the NFT selling platforms, and thus orient yourself on the market that suits you best according to the user profile that you want to be in the crypto-art world.

The goal of this project is obviously to speak to the widest possible range of people, so we also wanted to define, in our own words, some of the terms found in digital art. It is obviously important to remember that given our modest knowledge of the subject, our information is to be taken with hindsight and represents only the gateway to a universe so large and infinite in terms of creativity. Therefore, we invite anyone interested in NFTs to go further in terms of research as our work is not exhaustive. Finally, concerning the legal dimension of CryptoArts, we would like to emphasize that we have based ourselves on a Swiss legal framework. This will necessarily limit the reception of our deliverable internationally, but it is still relevant for anyone who has an interest in the digital art world.

 

Crypto-currency / crypto-art background

What is a crypto-currency? Well, it can be defined as "an asset that is exchanged from peer to peer without the need for a trusted third party". There are no regulatory bodies within this system because it is decentralized. These currencies were generally created by developers who have the ability to choose and define the technical properties of these assets. Thus, they can decide on the number of coins issued, the speed of exchanges, the security of the network and more.

Cryptocurrencies are obtained through a process of electronic mining. This means that a device will allocate part of its power to perform calculations necessary to secure the currency, in return, the miner will be able to recover a small part of units of the cryptocurrency. As mentioned before, the principle of these assets is not to require a trusted third party and this is possible thanks to the blockchain system in which most of the digital currencies are registered and which allow to guarantee their uniqueness, their traceability as well as their origin.

 

Actually, crypto-currencies are not considered as "real" means of payment in most countries (with some exceptions, see below). The reason being that they are considered too volatile, due to their decentralisation, but also because they do not constitute a stable store of value. This seems relatively logical, although one wonders, given the recent rise of Bitcoin and other digital currencies, whether this will change. The only national exception that considers a cryptocurrency as a national currency is El Salvador with Bitcoin, but there are also countries that are very much against it. The case of China for example is very mixed, so it is rather risky to be a miner or a cryptocurrency owner there. This is also the case of Pakistan, Algeria or even Morocco who have simply banned exchanges and miners in their countries.

Definition of NFT

What is an NFT (Non-Fungible Token)? It is a 100% virtual token which has the particularity of being unique. It is generally produced by the Ethereum blockchain, but it should be noted that other systems exist, this one being just the most used.

The difference with crypto-currencies lies precisely in the lack of fungibility present in NFTs. To summarize, it is possible to exchange 1 Bitcoin for 1 Bitcoin for example, but not to exchange 1 NFT for 1 NFT. The reason: the authenticity of each token gives a different value to each piece of work, we can make the analogy with a handwritten signature that would be very similar, but will never be the same.

What are the popular uses of NFTs? Nowadays, we find many of them in the art world (e.g.: Art Blocks Curated from Christie's) or in video games in order to have rare, even unique items. But NFTs are also tools of speculation, this concerns the two other domains mentioned above and can be justified by the authenticity and rarity of each token. Like any object, tokens can be subject to the law of supply and demand. To illustrate this last example, we can mention the history of the Bored Apes Yacht Club. This collection of artistic tokens were designated and sold on the basis of minor visual distinction criteria. These were generated via algorithms that simply created rarity among the works in the collection. But what made this collection so famous was the exclusivity that the owners could enjoy through the various events that the Bored Apes Yacht Club organised. Thus, by offering very private services, reserved for an elite owner of an NFT of the brand, one can create a buying interest that will drive up the price and create a reputation. This is the economic gamble that some NFT collections have succeeded in making and it may be a part of the reason why NFTs are so popular nowadays.  

 

How do you get started with NFTs? Well, for starters, you need to have a digital wallet (cryptowallet) to store and manage your assets securely. Then you need to invest in cryptocurrencies if you want to acquire a work, but this is optional. Finally, you need to go to an NFT buying/selling platform, more commonly known as a marketplace in order to buy and/or sell NFTs.

 

What are the dangers related to NFTs? First of all, you have to keep in mind that CryptoArts is a very volatile market, meaning that a work of art can easily fluctuate according to market trends. So, even if you own a digital work that is worth a lot of money because it is very well priced, there is no guarantee that you will be able to find a buyer easily because of the volatility of the market. It is therefore important to remember that these are very risky speculation tools. Another risk, a smaller one, concerns the storage of NFTs. Let's imagine that the server hosting your token goes bankrupt, or is destroyed by an accident, in this kind of case it is obvious that access to your property is over. Finally, you should not forget that an NFT is a numerical code giving unique access to a token, but if you forget the code for example, you can forget about your property. Dangers are also to be noted on the side of the platforms because it should not be forgotten that the marketplaces can be subject to hacker attacks like all online services. That's why you have to be very careful and never leave your cryptocurrencies on your account of a platform to avoid any theft.

 

 

Comparative NFT Marketplaces

Lexicon

 

AAA (American Arbitration Association)

The American Arbitration Association (AAA) is a not-for-profit organization in the field of alternative dispute resolution, providing services to individuals and organizations who wish to resolve conflicts out of court, and one of several arbitration organizations that administers arbitration proceedings (Wikipedia)

Applicable law

Law according to which the dispute will be settled. 

If no applicable law is given and the injury occurs in Switzerland, Swiss law offers certain guarantees as with personality rights.  cf. Lugano Convention (civil law) and LDIP.

At someone's discretion

At their disposal, at their mercy, in their power.(Larousse)

B2B SaaS platform 

B2B SaaS stands for "business-to-business Software-as-a-Service". It allows NFTically users to create their own "white label" NFT Store or NFT Hub with minimal technical skills. 

Blockchain

Technology for storing and transmitting information without control (def wikipedia)

A blockchain is a database that contains the history of all exchanges made between its users since its creation. This database is secure and distributed: it is shared by its various users, without intermediaries, which allows everyone to verify the validity of the chain. (def www.blockchainfrance.net).

Buying fees

Fees associated with the purchase of an NFT allocated to the marketplace by the user.

Community-first NFT marketplace

Users of the marketplace are getting benefits by using the marketplace, so the fees go to its users. This means that 100% of the NFT Marketplace fees will be distributed to the Token holders who are actively staking.

Cryptowallet

Cryptocurrency wallets keep your private keys (i.e. the passwords that allow you to access your cryptocurrency) safe and accessible. They also allow you to send, receive and spend cryptocurrencies. (def www.coinbase.com) 

DMCA (Digital Millenium Copyright Act) :

A U.S. copyright law that exempts from liability online service providers who promptly remove content or messages posted by users suspected of infringing a copyright upon receipt of a notice of claimed infringement from the copyright owner or its legal representative.

Exclusion of liability/responsability

This is a statement that a person or company may sometimes make in a contract, on a poster, ticket, receipt or elsewhere. Its purpose is to exclude or limit its liability if you suffer damage while using its services, facilities, property, etc … (éducaloi.qc.ca)

Gas fees

Fees which are used to compensate miners for the energy required to verify a transaction and to provide a security layer to the crypto-currency network.

JAMS

Formerly known as Judicial Arbitration and Mediation Services Inc is a United States–based for-profit organization of alternative dispute resolution (ADR) services, including mediation and arbitration

License

A contract under which the owner of a good, process, patent or trademark grants a right of use to a person or company. The license agreement (or licensing agreement) represents this contract. It describes precisely the context and the terms of use, as well as the conditions of payment by the licensee of the royalty linked to the license. (emarketing.fr)

Marketplace

Sales platform for digital works that connects creator and buyer. Exchanges are secured thanks to blockchain technology and use cryptocurrencies.

Mint

Minting an NFT means converting digital data into crypto collections or digital assets recorded on the blockchain. The digital products or files will be stored in a distributed ledger or decentralized database and cannot be edited, modified, or deleted.

Non-Fungible Token (NFT)

A 100% virtual token with the particularity of being unique that is produced via the Ethereum blockchain system for the most part.

Platform moderation

Type and degree of moderation on a platform. Can be automated via algorithms or managed by a platform team directly.

Royalties

Commission received by the artist each time a work is (re)sold.

Selling fees

Costs associated with the distribution, marketing and sale of an NFT allocated to the marketplace by the user.

Smart contract

A smart contract is a self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code. The code and the agreements contained therein exist across a distributed, decentralized blockchain network. The code controls the execution, and transactions are trackable and irreversible.

Staking

The purchase of NFT generates royalties over the long term.

The act of granting one crypto-assets to any cryptocurrency protocol and earning a reward in return. (def Faiver)

Wash-trading

Wash trading is a process by which a user buys and sells with the express purpose of providing misleading information to the market. (def www.investopedia.com)

White label

A white label is a service or product designed by a company (the producer), which other companies (the "distributors") take over and market under their own brand.

 

ETUDIANT-ES

Mme Inès Abidallah, Faculté de Droit

Mme Ambre Aebi, GSI

Mme Méissane Nouassi, GSI

Mme Sarah Herren, Etudiante libre

M. David Caraça, GSI

M. Loris Charlaix, SDS

M. Tiago Dos Santos, GSEM

M. Hamid Jolou, GSEM

M. Maxime Mandot, GSEM

M. Aryé Zafrany, GSEM

 

Assistant du cours

Thomas Gauffroy-Naudin | Chaire des Humanités Numériques de l’Université de Genève 

https://www.unige.ch/lettres/humanites-numeriques/equipe/collaborateurs/thomas-gauffroy-naudin