Next Picasso, Ponzi Scheme, or IP Boom? NFTs in the Eyes of the Beholder

• Author: Chris Katopis
• Pages: 30-35

Published in Landslide, Volume 14, Number 1, 2021. © 2021 by the American Bar Association. Reproduced with permission. All rights reserved. This information or

any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written

consent of the American Bar Association.

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Image: GettyImages

NFTs have arrived, and they are continuing to rock the

art world. The big news this year was a work by Mike

Winkelmann, the artist known as Beeple, that sold

for a record sum of $69,346,250 by Christie’s auction house.1

Everydays: The First 5000 Days is a collage of digital images

in combination with a digital, non-forgeable blockchain

code, and it was the highest recorded sale amount for a non-

fungible token (NFT) to date. That surely was a lot of money

for “a JPEG and [a] hyperlink.”2

The artwork’s purchaser was a Singapore-based entrepre-

neur and crypto investor who was proud to be the buyer of a

“signicant piece of art history” that was part of an important

change and a shift in history and th e art world.3 The mag-

nitude of these shifts and changes is causing both the art

world and the intellectual property (IP) community to assess

the consequences.

Art acionados already know that digital art and multimillion-

dollar price tags are realities in the art world. Christie’s rst began

selling digital art embedded via blockchain in 2018.4 Artworks

by modern celebrity artists have long fetched multimillion-dollar

sales—e.g., Koons ($91 million) and Basquiat ($110 million).5

Some other notable NFT sale prices are just as astounding:

• Twitter CEO Jack Dorsey’s rst-ever tweet earned him

$2.9 million as an NFT.6

• An NFT video clip of LeBron James dunking sold for

more than $200,000 on the NBA Top Shot website.7

• An NFT artwork of Paris Hilton’s cat brought her the

equivalent of $17,000 in cryptocurrency.8

NFTs and Digital Tokenization

The paradox of this NFT phenomenon is the resulting value

from the inherent combination of two unrelated elements.

First, we experience the piece physically as art, through a

Chris Katopis serves as the ABA-IPL Section’s legislative

consultant. He began his career working on IP legislation for the

late entertainer and Congressman Sonny Bono and has held a

number of key leadership positions in the federal government. He

can be reached at chris.katopis@americanbar.org.