This week, Sotheby’s has been taken to court in New York over a non-fungible token (NFT) sold for almost $1.5 million via the auction house. Artist Kevin McCoy’s ‘Quantum’ NFT is perceived as valuable because it’s one of the first NFTs, harking back to 2014. That was before Ethereum launched or the term NFT was introduced. So owning Quantum could have a similar or greater cachet to owning a CryptoPunk NFT. This isn’t a typical NFT copyright or trademark infringement lawsuit. It’s about moving content between different blockchains.
Nowadays, if you’re selling an NFT, ideally, it should be on one of the better known blockchains to make it easily transferable. So last year, McCoy re-minted the NFT on Ethereum, but as a representation of the original one and transferring the rights to that original. And that’s where the legal question arises.
The original NFT was minted on NameCoin, a blockchain derived from Bitcoin’s code with a few tweaks to make it work similarly to domain names. You have to renew domain names at least annually. NameCoins also need to be renewed roughly every 200 to 250 days. And after creating his NFT, McCoy did not update his registration in 2015. If you don’t renew domain names, someone else can claim them, and NameCoin appears to work in a similar way. But for six years, nobody claimed the name that McCoy created in 2014.
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