TL;DR: An NFT tied to a smart contract lets a creator earn from the first sale and collect royalties every time the rights are resold. Give buyers an affordable, resellable license and pirating becomes the worse deal, an idea that works for games, art and CAD files alike.
An artist creating a masterpiece is always a sight to behold: fire in the eyes, precise, trained movements, perfectly combined hues, and an immense number of hours dedicated to the craft, not to mention overall talent and passion for the work.
The final result of such an endeavor is usually breathtaking and, in the end, grants its creator a ticket into human history, but, alas, often it happens after the artist’s death in poverty.
What if an artist could profit from a new work right away?
What if one doesn’t need to spend years traveling around the world demonstrating their work to all sorts of people until, hopefully, one day it is noticed and appreciated?
This bold and inspiring idea seems quite possible today with all the digital communication we have, and, certainly, there are some enthusiasts who try to make it happen by creating NFTs or Non Fungible Tokens. NFTs are certified one-of-a-kind digital tokens that exist on the blockchain and are later linked to physical or, usually, digital assets. The tokens are produced or “minted” in limited edition runs, rarely more than a few thousand, thus creating an effect of scarcity.
But the catch is that NFTs are not “actual” artworks coded into a blockchain, since storing in it even a 64x64 JPG image would be exorbitantly expensive, but URLs linked to the artwork.
The blockchain time-stamps and makes immutable records of all transactions including the metadata about “who, when, what” was traded and how much was spent, and permanently indicates the ownership history across the distributed ledger.
The technology would make it possible for individuals or corporations to exchange classified information safely as long as all involved trust each other in not leaking it. This also means that an electronic copy turns into an asset that may be sold, bought, or rented.
What can NFTs do for content creators?
First of all: when selling and re-selling rights to a certain piece of content, the original owner and the other right holders get their fair share in the form of royalties. But naturally, when the number of deals grows, so does the dilution, which is compensated by the NFT’s price growth.
Second: each electronic copy is unique, which in turn makes it an NFT, meaning that one may buy and sell rights on the copy and rights on it as an NFT.
This is the same situation as with console videogames that are mostly sold in physical copies, as people who buy a new PlayStation game in a box may easily re-sell it or present it to a friend upon completing. This was one of the most successful steps that Sony took to solve the piracy problem around their platform.
The very same scheme can be done with basically any content, especially when regulated by a smart contract, even with your CAD files, yes.
Say, if you were to own your design in the form of an NFT, you would not only receive money from people buying it directly but also from the ones buying rights on a particular piece of the design. And if the new right-holders sell it, you will receive royalties from each following transaction. This allows enhancing the idea of reselling pieces, as the original creator still has benefited from his or her work even after it’s been sold several times by other people.
Can NFTs counter piracy and IP loss?
By concluding a smart contract covering this kind of transaction, you offer people a choice:
1) They still may pirate your content with no further opportunities to use it;
2) Or, they may buy an NFT copy of your content with the right to resell it or with some bonuses for further content updates;
3) Also, the smart contract may include an option for a full NFT-copy of the content, allowing the buyer to resell the piece of content and receive royalties from deals made further down the chain. This would perfectly work for CAD files, as they mostly exist only in the digital world.
Why are video games more complicated?
When buying an NFT on a particular boxed copy of a game, you neither receive rights on other physical copies published nor on digital copies of it. So to receive royalties from all transactions, you need to buy an NFT on the game as a product.
And upon doing so, you may access the market without any mediators, such as publishers.
But releasing a game without marketing help and advertising is pretty hard. That’s why many indie developers look at blockchain and NFTs to sell their products. In a survey commissioned by the blockchain platform Stratis, 58% of 197 game developers in the US and UK said they were beginning to use blockchain, as PocketGamer.biz reported.
This can help build a reliable chain with the developers being the first and original owners of their product and publishers being the second in line, which will keep them from hijacking a game series from the original owners (see the Call of Duty franchise case).
But at the same time, publishers will get their piece from investing in a game’s marketing campaign. Not mentioning that resources that large companies possess can help in polishing the game or sometimes even in completing it.
What does this mean for CAD files?
To us in CADChain, it is another way to put CAD-files protection on a broader scale.
The technology will make it possible to turn IP ownership into an investment.
And if people are to make money on reselling CAD files, they would not need to pirate it, thus would not sabotage your source of income. Also you can enable 3D models protection with our product BORIS for Cura.
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FAQ about NFTs and CAD IP protection
Does buying an NFT give me the copyright?
No. The token records who holds it, and the rights you get depend on the license or smart contract attached to it.
How do royalties work with NFTs?
A smart contract can send the original creator a share of every resale, so the creator keeps earning as the rights move down the chain.
Can NFTs register ownership of a CAD design?
They can record which version of a design came first and who registered it. Read more about NFT technology for CAD ownership registration and how Ricardian contracts turn a license into a document both people and software can read.
