“Should art be regulated by the SEC?” NFT artists file lawsuit
“Should art be regulated by the SEC?” NFT artists file lawsuit
SEC had ruled that some NFT digital art pieces are unregistered securities.
This article makes my brain want to bleed.
I'll say it louder one last time for the people in the back:
THERE ARE NOT ENOUGH BITS IN ANY TYPE OF NFT TO STORE ART ON THE BLOCKCHAIN. THE BEST YOU CAN DO IS A URL WEBLINK TO THE IMAGE AND AN IMAGE HASH. THAT IS FUNCTIONALLY NOT THE SAME AS STORING THE ACTUAL IMAGE ON THE BLOCKCHAIN. IF THE ORIGINAL IMAGE GETS DELETED, THE URL AND HASH ARE BOTH EFFECTIVELY USELESS.
The art is always a completely separate entity from the NFT itself. Trying to act like this is "regulating art" is just more cryptobro bullshit.
92There are currently [2] insecure techbros downvoting reality.
12There are a couple projects with native block chain art but as you might expect it's low resolution pixel art due to the nature of block chain being prohibitively expensive to use as storage
5Dude you might as well try to explain algebra to cats. When you inevitably fail then at least you can pet the cats.
4Yes, and a deed for land ownership is not the same thing as land itself. Nobody cares. That's not the point.
-21And legal regulations around the deeds for land ownership are different laws than the legal regulations for how you can use the land.
But conflating the two as the same thing is the purpose of this lawsuit, even though it's clear as fucking day that they are regulating the deal-making-instrument (the NFT) and not the art itself, which, once again, is a separate entity from the NFT.
22Let’s assume you’re arguing in good faith here so we can understand why land deeds and URLs are completely different.
Deeds are managed by a central authority. There is an agreed-upon way(s) to view and search those deeds. There is a single authority to update or remove deeds. The items the deed refers to also are controlled by a single authority and changing them has a single process.
URLs are registered (loosely) with a central authority but the similarities end there. I can impersonate a URL on a network (even up to large chunks of the internet if I’m able to confuse DNS in a large enough attack). So just because you’ve bought the domain referenced in the blockchain and set up some name servers doesn’t mean any consumer of the blockchain or even the internet is guaranteed to hit your instance of the domain. All a URL is is a reference to something so let’s assume for a minute we can have a global reference. What’s behind it? Again, completely uncontrolled. For now it could be your NFT; what happens if I am your hosting provider and destroy your instance? Move your hardware? What’s to prevent you, the owner of the assumed global reference, to change what that uniform resource locator is actually locating?
Land deeds and URLs are not analogous. Land and the content served at a URL are not analogous. Let’s look at NFTs quickly to see if we can actually do something about this!
Since we have a single-write, read-only database, why not store the full thing in the DB? Well, first you have to agree on a representation. It has to be unchanging so we can’t use a URL. It can’t ever duplicate so realistically hashing is out (unless our hash provides a bijection which is just a fancy way of saying use the fucking object itself). Assuming we’re only talking about digital artifacts (attempting to digitize a physical asset is a form of hashing meaning we get collisions so you can’t prove ownership), we’re now in an arms race for you to register all of your assets and their serialization methods before I brute force everything. Oh and this needs to live everywhere so it can be public so you need peta-many petabyte drives. But wait! Now we’re burning the sun in power just to show you have ownership of 10 and I have ownership of 01. Fuck me that’s dumb.
16
the NFT is not the art itself, it is at best a proof of ownership.
32It's not even that.
There is a huge lack of insight into who owns the copyright of an NFT. This confusion likely stems from the fact that an NFT comprises two things: (i) the identifiable, non-fungible, non-replicable, and transferrable cryptographic asset recorded on the blockchain, and (ii) the creative content. The creative content is separate and distinct from the actual asset recorded on the blockchain. As such, the person or entity that created the creative content owns the copyright. The content creator continues to own the copyright, even if the NFT is sold to someone else. It’s analogous to Jeff Koons selling artwork he created—Koons can sell the art to one person to hang on their wall, but since Jeff also owns the copyright, he can sell that same artwork as an image on t-shirts.
https://bpp.msu.edu/magazine/nfts-what-you-need-to-know-to-protect-copyrights-june2022/
NFTs are literally just URLs, pointlessly stored on "the blockchain". URLs that point to servers which can be switched off at any moment.
24NFTs are great for replacing things like deeds or vehicle titles, where we need paperwork to verify ownership. But the problem arises when it's cryptographically hard (meaning exceedingly unlikely on reasonable timescales) to reverse fraudulent transfers of those documents. Cutting out a centralized authority at the price of making the system more vulnerable for gullible people is almost always not worth it.
4
Regulating a money scam that uses art as a token isn't regulating art, it's regulating money scams.
28If pieces of art metadata are being traded like securities, then yes, the SEC should regulate their trade.
It should have absolutely nothing to do with the "art" associated with that metadata, it should just be regulated for what it is.
26it should just be regulated for what it is.
Ok soooo how should metadata be "regulated"?
-15Alright, reading is hard, but here we go. If:
pieces of art metadata are being traded like securities
Then:
yes, the SEC should regulate their trade
They should be regulated according to securities legislation. Wow! We did it! Does little baby get it now?
12You don't regulate the metadata, you regulate its trade as a financial security.
But you knew that, you're just being obtuse.
12
Given that the world of high art is basically entirely used by rich people as a way to launder money and dodge taxes?
Yes. It absolutely should. It should have been like 30 years ago.
18The problem with what creeps like Mann are claiming comes down to the difference between “art” and buying an “interest” in art as a speculative investment. Mann conflates these two ideas, trying to bestow the wholesomeness of artistic expression with his investment business venture. I’m all in favor of getting artists paid, and structuring society in a way that encourages the production of art, but Mann wants to weaken securities regulations and consumer protections to do that. That’s a terrible idea because it will lead to many more people being conned and defrauded.
If investors were merely trying to support an artist’s work, and not seeking to profit from their investment, they wouldn’t need a securities mechanism like NFTs to do it. We already have money for that.
If a side effect of regulating NFTs as securities is to somehow damage the regular fine art marketplace, as I think Mann’s suit is warning, that is no great loss for society. The fine art market is a blight, a fraud-riddled playground for ultra wealthy douchebags to sequester wealth and does nothing to advance art or promote the creation of artworks writ large.
Mann has ridden the crypto speculative bubble and has an inflated impression of the value of his work. He’s carved out a niche as a sort of court jester for billionaires like Mark Andreesen who want to rebuild financial systems in a way that would dismantle the regulatory state and enshrine an elite class as technologically empowered feudal lords. He thinks the money is compensation for his songs, but it’s largely just a side effect of crypto bros forever trying to find a greater fool to hold the bag in a pyramid scheme. In that effort, his lawsuit is basically a marketing campaign for his investment business. I hope the court puts an end to this once and for all, but I’m not optimistic.
14If investors were ... not seeking to profit from their investment,
Yeah, this really makes sense. \s
0Maybe to paper handed bitches it doesn't make sense.
LMAO I gotta do better at screenshotting shit for dopes who delete their comments.
"and not seeking to profit from their investment, they wouldn’t need a securities mechanism like NFTs to do it."
Sure, that makes sense \s
2
I thought the whole point of crypto/blockchain technologies was to avoid government regulations?
EDIT: Never mind, they're suing because the SEC declared them as securities, which the artists don't want.
11It looks like they're suing because the SEC declared them as a security, and the artists don't want them to be classed as one.
4I see.
3
I believe NFTs are actually a good idea on paper for this use case. Our implementation of the idea is weird though.
I don’t know why the SEC though. NFTs are not “money”. It’s a contract that shows ownership. It’s a legal issue in my opinion
-3The SEC also regulates trading in stocks, which are contracts that show ownership, just of a portion of a corporation instead of a piece of art. They're both classified as securities because they can be bought, sold and traded as investments where people can stand to gain or lose large sums of money in said trades. They work in very similar, if not identical, ways. If the NFT did not function so much like a stock investment and was just something you could buy or sell as a regular good, then the implementation would not be so weird.
4Guess what the SEC enforces? You guessed it, laws!
4
I wonder how much it costs to get an advert article like that.
9The only purpose of NFTs is to raise sea levels by metres and inundate every coastal city. Owning NFTs is a crime against humanity. Anyone who has ever owned an NFT belongs in prison
2The only purpose of NFTs is to raise sea levels by metres
So NFT's will get rid of silicon valley?
2
"art"
If it was actually art, it wouldn't be able to be traded like a commodity. NFTs have very little artistic value.
0It's kind of a shame that Jonathan Mann got wrapped up in all this NFT grift. Many of his songs are quite catchy, I recommend checking him out on YouTube if you haven't already.
-4