IOI
The American digital artist Mason Rothschild, who created the MetaBirkins series of NFTs (Non-Fungible Tokens), a fast increasing aspect of the cryptoworld, is being sued by Hermès, a French luxury fashion house.
The case has once again brought the ongoing argument over NFTs into sharp focus—the uniqueness and true value of these digital artefacts, as well as the critiques levelled against them.
What makes Hermès want to sue Rothschild over MetaBirkins?
Rothschild has been accused by Hermès of profiting from the company’s trademarked ‘Birkin’ tote bag, which was debuted in the 1980s.
To be clear, Rothschild does not produce physical Birkin-style bags. He created digital art inspired by it, dubbed “MetaBirkins,” which consists of a sequence of colourful tote bag motifs. He then sold this artwork as an NFT on the internet.
Hermès International and Hermès of Paris, according to The National Law Review (NLR), have filed a case in the Southern District of New York for trademark infringement and dilution. The firm has described the history and fame of the Birkin bag in its complaint. Hermès holds a US trademark for the word Birkin, according to NLR.
The brand has claimed trademark infringement in its complaint due to its trademark rights. It also claims that the artist’s sale of the NFT and advertising of his artwork as “MetaBirkins” constitutes “unfair competition.”
The case also references a cybersquatting claim involving metabirkins.com, according to NLR. The illicit activity of registering names that are close or identical to those that are trademarked is known as “cybersquatting.”
Rothschild, on the other hand, appears unfazed, announcing on Instagram that he will fight back. “I am not manufacturing or selling imitation Birkin bags,” the digital artist stated in a statement posted online. I’ve created artwork depicting fictitious fur-covered Birkin bags.”
But why are NFTs regarded as one-of-a-kind digital assets?
NFTs are one-of-a-kind, irreplaceable tokens that may be used to verify ownership of digital goods like music, artwork, and even tweets and memes. In contrast to fungible currency such as money, the word ‘non-fungible’ merely indicates that each token is unique (a ten-rupee note can be exchanged for another and so on).
Bitcoin and Ethereum, for example, are fungible, which implies that one Bitcoin may be swapped for another. However, because the two are different and thus unique, an NFT cannot be traded for another NFT. Depending on which asset it represents, each token has a different value.
NFT transactions are recorded on blockchains, which are digital public ledgers, with the Ethereum blockchain hosting the majority of NFTs. NFTs gained popularity in 2021, when artists began to see them as a handy way to monetize their work.
What are some of the other reasons for the strong demand for NFTs?
Another advantage is that NFTs are part of a new type of financial system known as decentralised finance (DeFi), which eliminates the need for institutions like banks. As a result, decentralised finance is regarded as a more democratic financial system because it facilitates laypeople’s access to capital by effectively eliminating the function of banks and other related institutions.
Despite this, because NFTs are a decentralised system, anyone can sell a digital asset as one. This can occasionally cause issues. For example, if you sell someone else’s artwork as an NFT, you may be infringing on their copyright. In the case of the MetaBirkins, the same thing happened.
So, what happened at some of the most recent NFT auctions?
The Economist made an NFT of one of its issue’s cover photos in October last year, depicting Alice from “Alice in Wonderland” peering down the rabbit hole into “this odd new world,” where terms like cryptocurrencies, Ethereum blockchains, and metaverse are becoming more common.
Ex-Twitter CEO Jack Dorsey sold the platform’s first Tweet as an NFT in March 2021. “Just putting up my twttr,” wrote Dorsey in a March 2006 tweet. This tweet, which would most likely outrage grammar pedants, sold for more than $2.9 million. Dorsey’s crypto wallet would have been credited with this sum.
What are some of the criticisms leveled toward NFTs?
One of the complaints of NFTs is that they create value where none exists, such as when memes and tweets are sold for large sums of money. Another major criticism levelled about NFTs is the huge quantity of electricity they require, which results in significant levels of greenhouse gas emissions.
According to the Cambridge Bitcoin Electricity Consumption Index, the amount of electricity consumed by the Bitcoin network in a single year could power all tea kettles used to boil water in the UK for 30 years or could satisfy the total electricity needs of the University of Cambridge for 993 years.
Any anyone can submit an offer on any tweet on the website ‘Valuables by Cent,’ which Dorsey used to auction his tweet as an NFT. When someone buys a tweet, they receive a digital certificate certifying their ownership of the tweet, which is signed and authenticated by the tweet’s creator.
Once a tweet has been acquired, it can be resold on the website or displayed in a user’s online gallery. The tweet can also be kept in the buyer’s personal collection.
But why would anyone buy a tweet to begin with? The website answers this topic in its FAQs by saying, “Valuable moments happen every day within the space of a tweet.” The value of these moments is captured in the form of digital treasures when they are turned into NFTs. When you buy an NFT from someone, you’re establishing a direct relationship with them. “Wow, that’s really cool.”
