The Ministry of Digital Transformation and the Ukrainian blockchain community have launched a virtual museum that will feature drawings that are works of art and blockchain technologies; they, in chronological order, will reflect the history of Russian aggression against Ukraine. Currently, the museum presents a collection of NFT drawings by Ukrainian artists about the first six days of the war.
According to the Minister of Digital Transformation of Ukraine, Mykhailo Fedorov, the world’s first NFT war museum collected more than 600,000 dollars in support of Ukraine on the first day of selling virtual exhibits. A total of 1,282 digital works of art were purchased. The collected funds will go to the cryptocurrency fund, which was created by the Ukrainian crypto exchange KUNA to support the Ukrainian army and digital and cyber resistance.
“We became the first to combine blockchain technology and modern art in order to document the historical truth about the Russian Federation’s war against Ukraine”, he reported on the Telegram channel Mykhailo Fedorov.
In recent years, we constantly hear the terms NFT or crypto-art, but it is not easy for people who are not related to information technology to understand it. Therefore, we are happy to share what we have already figured out ourselves.
NFT- art or crypto-art is digital art, the works of which can be seen only from digital electronic devices (gadgets). Accordingly, these works must be created digitally – images, music, 3D models, texts.
A digital virtual accounting unit with a certain value – a token – is attached to each image. Tokens can be interchangeable, then they can be exchanged as currency; examples of fungible tokens are Bitcoin, Ether, and other cryptocurrencies. Or tokens can be non-fungible – Non-fungible tokens (ie NFT); they are created in a single instance, contain identification information and are unique due to the blockchain technology, which allows you to store information about the owner of the token, about the history of its sale, but it is impossible to change the identification information.
The first NFTs appeared back in 2017 in the Ethereum system. Such tokens, like any cryptocurrency, can be stored in your crypto wallet and transacted, bought and sold. But bitcoins, etheriums and other digital currencies and even real money easily replace each other and are divided into parts. NFTs cannot be split into pieces or exchanged for a similar token. From this point of view, NFT has the properties of a unique object in the physical world.
That is why this technology is used to distribute digital collectibles, as the NFT contains both the digital object itself and information about the creator of the work (this is how NFTs help protect copyright) and data about the owner, namely his wallet number in the Ethereum system.
Therefore, authors of NFT works do not have to worry about plagiarism: even if someone takes a screenshot of the work and wants to pass it off as their own, the author or owner of the NFT will be able to prove, thanks to the encrypted data, that the rights to the NFT – the work belongs to him.
The new sphere is not yet regulated in Ukraine, which raises many legal issues.
On February 17, 2022, the Verkhovna Rada of Ukraine adopted Law of Ukraine No. 2074-IX “On Virtual Assets”. The law will enter into force only after amendments are made to the Tax Code of Ukraine regarding the taxation of transactions with virtual assets. The new law introduces the concepts of “digital currency”, “digital financial assets”, utilitarian digital rights.
But NFT cannot be called cryptocurrency or digital currency in its pure form. Such tokens cannot be used to pay for anything, they can be called a digital financial asset. A person buys a unique virtual object or a digital certificate for a unique object in the real world.
Thus, according to current legislation, NFT should be perceived as a right to other property, since NFT is an expression of a right to an object of intellectual property.
According to experts, from the point of view of law, it is no different from the art market, but it has its own specifics from the point of view of the turnover of digital assets. Therefore, provisions on digital rights and provisions on objects of intellectual property rights and circulation of things should be applied to NFTs in Ukraine.
At the same time, everything is often simpler in foreign law. For example, in the USA, tokens are classified according to their economic essence: if a token is used to pay for a product, it is a cryptocurrency; if the token gives corporate rights, it is a share; if the token provides some service, it is a service (utility), if the token, such as NFT, refers to a picture, then it will be considered as a combination of copyright, exclusive right and the thing itself (a picture in a frame or a “digital” frame) .
It is worth noting that the popularity of NFT art is growing rapidly. According to Business Insider, only in the 3rd quarter of 2021, the volume of trades in the works of crypto-artists exceeded $6 billion.
Sources:
https://metahistory.gallery/warline
https://t.me/zedigital/1459
https://www.theverge.com/22310188/nft-explainer-what-is-blockchain-crypto-art-faq
https://zakon.rada.gov.ua/laws/show/2074-20#Text