Identity for the NFTs (Non-Fungible Tokens)

Alexandre Maravilla    6 April, 2022
NFT and microprocessor

There is a Twitter account committed to reporting NFT authorship scams. This type of online fraud, which is on the rise, infringes on intellectual property and currently affects artists and creators of artwork, yet in reality impacts on any original copyrighted content on the internet that can be tokenised.

The problem is that NFTs accredit the possession of a digital asset, but do not verify the identity of the possessor, allowing the appropriation of the work of others.

What are NFTs (Non-Fungible Tokens)?

In a simple way, and following the example of pieces of art. Let’s imagine that we have an original painting by a renowned artist hanging in our living room and we decide to take a high-quality image of it and digitalise it. Then, using a tokenisation tool, we create its NFT. The NFT would be the certificate of authenticity and possession that verifies that the digital version of the painting we have hanging in our living room belongs to us. 

To ensure that the certificate is not manipulated or forged, it is stored in a decentralised way in Blockchain, without depending on any central authority for its custody and management (such as a notary’s office). Along with the certificate, a Smart Contract is also stored, a contract (written as software code) that defines and regulates how the NFT, and its associated representation (in this case the image of the digitised artwork), can be bought, sold and transferred. This contract is executed directly between the buyer and the seller, without the need for the intervention of an intermediary.

It is important to point out that the NFT (certificate + contract) is not the digitalised artwork itself (it is not the image). Moreover, just as we understand perfectly well that the physical representation of the artwork (the one we hang in our living room) cannot be stored on the Blockchain, it should be mentioned as well that the digital version is not stored there either (although technically it could be), but it is usually stored in the so-called crypto wallets. The most common is to use the software versions of the wallets (although there are also hardware-based ones). Perhaps the best known is Metamask. 

What is the problem?

Going back to the example of the tokenised painting. Now that we have created the NFT, we can proudly display the digitalised image of our artwork on social media. And with the NFT, we demonstrate that the image is unique, thereby creating scarcity and increasing its value. This NFT and its associated image can be marketed on the Internet, and this is where the problem comes in. The NFT has been created without the consent of the author, the artist who created the painting hanging in our living room. Why does this happen? Why can we create an NFT of a piece of art without the consent of the author?

NFTs demonstrate ownership of a unique asset, but do not verify the identity of the holder. The possession of the NFT is not linked to a verified real identity, as most blockchains, such as Bitcoin and Ethereum are pseudo-anonymous. Blockchain accounts do not reveal any information about the identity that controls them. And here is the problem, we cannot verify the identity of the first holder of the NFT who should supposedly be its author. 

Verifying possession of the NFTs

There is an unwritten rule in social media that if you don’t own an NFT, you can’t use it as your profile picture, but of course, there are jpg images that are worth hundreds of thousands (or even millions) of euros. Who wouldn’t want to “borrow” that image and use it as their profile picture? Who can verify that the image I am displaying corresponds to an NFT that I own?

Last January Twitter announced that it was launching a feature aimed at verifying NFTs displayed in profile pictures on its social network. “If you own an NFT, you can upload it as a verified profile picture on Twitter. Link your Ethereum Wallet to your Twitter account and a list of the NFTs you own will be displayed.” The verified NFT is shown with a blue check. With Twitter’s new functionality, it validates that the user displaying an NFT as a profile picture owns the NFT he or she “boasts”.

Twitter shows a blue check in the profile image when member is using an NFT that owns
Twitter shows a blue check in the profile image when member is using an NFT that owns

Returning to the example that concerns us in this article, we as creators of the NFT of the painting that we have hung in our living room, and that we have digitalised, could upload the image to Twitter with the validation of its NFT. Twitter will show a blue check on it and thus demonstrate that we are in possession of that NFT. Although we are not the rightful owners of that digital asset. Twitter validates ownership but does not verify authorship.

Authorship verification of NFTs

As we have shown, tokenising a work of art is simple nowadays, just take an image of a certain quality of the chosen representation, and there are hundreds of tools that convert them into an NFT. How do we then guarantee copyright? How do we ensure that only the real artists and creators of the works are the ones who digitise them through the NFTs? The solution is to provide a layer of identity to the NFTs, a layer of identity that was forgotten in their initial conception.

Identity for the NFTs

Decentralised identity standards or self-sovereign identity (SSI) are based on blockchain technology and are therefore an ideal complement to provide identity to NFTs in use cases where it is necessary. These standards are being driven around the world, although it is the European Union that is leading their adoption.

It is possible to link an NFT with a verified real identity through SSI standards and in particular through VC-Verified Credentials.

Non-Fungible Tokens (NFTs) and Verified Credentials (VC), commitment to Web3 and the Metaverse

As we have explained, NFTs and VCs are not the same, NFTs prove the possession of a digital asset, while VCs can prove the identity of the possessor of that digital asset. So, going back to the example used, in the same way that we can verify the possession of an NFT, we can verify the authorship as well. In the case of tokenisation of works of art through NFTs, this preserves intellectual property and protects copyright. For other cases, such as NFTs that may represent our avatars in the Metaverse, this identity layer will help create more secure and trusted interactions, thus benefiting the mass adoption of these exciting new environments.

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