The Hydra
Why Trying to Remove a "Fake" NFT Is Pointless
The recent popularity of the CryptoPhunks project has ignited a debate over whether companies should surface low-effort parodies/copies/derivatives to buyers. On one side there are those who support removing these projects. They argue that these projects are theft of intellectual property and should be treated with DMCA takedowns. On the other side are people who believe that no company should get to decide which projects are legitimate and which are not. Taking a project like CryptoPhunks down, they argue, is censorship that goes against decentralization and the principles of Ethereum. I side with the latter group and think that these projects do not really matter, and platforms should avoid taking them down so they can avoid being arbiters of truth. But the debate highlights the paradigm shift we must take as we enter a distributed-first world and it demonstrates the lack of tools we have for surfacing provenance.
Some History
The CryptoPhunks project was created as a parody of the original CryptoPunks project. Their manifesto states:
The early purpose of CryptoPhunks was to poke fun at the high-brow, pompous group of people that were reflecting the “old-school” rules of art into this new frontier of NFT’s. CryptoPhunks wanted to test these limits of “parody” and bias against centralized marketplaces, of provenance on the blockchain, censorship, while also setting out to unite strangers and collectors from around the space.
The project was later taken down from the popular marketplace OpenSea not once, but twice. After the second removal, the project came onto my radar and I decided to mint 31 Phunks because I felt unsettled that a marketplace for decentralized goods could be an arbiter of legitimacy1. The day after all of the Phunks were flipped/minted, OpenSea decided to relist the project after a series of conversations between owners of Phunks and Nate Chastain, OpenSea's Head of Product. Since then, the project has ignited a debate about the limits of copyright laws and the amount of centralization that should be allowed in a marketplace that sells decentralized goods. For example, another project called Turned Apes took the original images of the Bored Ape Yacht Club, flipped them, and sold them on OpenSea. The project was removed from OpenSea after many owners of the original BAYC submitted complaints.
Trying to Kill a Hydra
I'm not sure where the line should be drawn and what balance there should be between centralized actors and decentralized protocols, but OpenSea's actions strike me as the wrong position to take. Censorship resistance is essential for a blockchain to function properly. Ethereum's co-founder Vitalik Buterin wrote a blog post in 2015 in which he said:
Censorship-resistance in decentralized cryptoeconomic systems is not just a matter of making sure Wikileaks donations or Silk Road 5.0 cannot be shut down; it is in fact a necessary property in order to secure the effective operation of a number of different financial protocols.
NFTs on Ethereum are not able to be censored. Every NFT that is minted on the blockchain will remain there forever. I, and everyone reading this, can look up on Etherscan to see who owns a given NFT. Those properties are a guarantee given the NFTs are on Ethereum and Ethereum remains decentralized. Whether or not OpenSea decides to list a project, the tokens for the NFT will remain on the blockchain forever; while OpenSea may not display it, other marketplaces for NFTs will. In addition, people will continue minting NFTs that contain the same image as an original. When a marketplace begins making decisions on which project to remove and which projects to keep up, they are imposing some form of censorship and will continue moving the goalposts for what counts as legitimate grounds for removal.
For example, according to this
Twitter reply, LarvaLabs did not specifically request OpenSea to take down CryptoPhunks. OpenSea judged for themselves that the project needed to be taken down. After the appearance of the Turned Apes project, OpenSea took it down because many BAYC owners (who hold the rights for their individual ape) requested it be taken down.
The problem with this type of takedown is it lacks the transparency that decentralization requires to function. How many members of a project need to request a takedown for it to be honored? Is it 1, 10, 1000? Do we look at the percentage of owners requesting takedowns? What if one project gets publicity and receives many requests for takedowns but another does not? Intervening with takedowns leads down a slippery slope and opaque rules that leave everyone except the judge (in this case, OpenSea) in the dark. Banning projects then becomes fighting a Hydra. Try to kill one project and two more will appear. Change the rules to kill the new projects and more will appear, and so on.
Towards Provenance
So then, how do we kill this Hydra? I think we all agree that the benefits NFTs provide for artists are radically transformative. The ability for creators to profit off and collect royalties from their work should be something we all strive to protect, but we cannot fight the Hyrda by trying to cut off its heads. The benefits of NFTs lie not in the image associated with the token, but rather the token itself2. Our efforts to fight illegitimacy should focus on that. With NFTs, provenance (the proof of authenticity and historical record of ownership) is guaranteed as a feature of being stored on the blockchain. Rather than removing a project that is deemed to be "illegitimate", we should allow for a decentralized way to point to the provenance of the authentic token. The buyers of the clone are then aware that the token they're purchasing is not legitimate and we avoid trying to censor the blockchain.
In our current legal framework, we place all of our emphasis on the appearance of a project to determine if it is illegitimate. We ask: Does the project look like this other project? Has enough work been done to consider this piece "transformational" enough that it is a new work? These questions are valid when we live in a world without transparency, but with NFTs we can largely ignore such questions. Instead, we need to ask: Does this token have provenance? Can I look up on Etherscan and see the history I expect to see with this token? Is the art signed by the creator? We need to shift the focus away from appearance and towards provenance when we look at authenticity. Since the blockchain is immutable and public, we will always know who owns the original CryptoPunks and the original Bored Ape Yacht Club Apes3.
In the past, even experts have struggled with determining the authenticity of an artwork. There are numerous examples of museums figuring out years later that the work they purchased was inauthentic. NFTs solve this problem through provenance, but we need to place our emphasis on provenance over appearance when we're determining what is authentic. Every purchaser of CryptoPhunks knows that they are not buying an original CryptoPunk because it's a completely different token. Rather than censor projects like this, we need to create and display tools that evaluate provenance to allow the community to arrive at a distributed consensus. As punk4156 wrote, "pixels are defended with copyright, provenance is defended with blockchains."
We are entering a world where blockchains serve as the arbiter of Truth rather than a centralized entity and we need to adjust our frameworks to adapt4. Shift the focus away from copyright, away from appearance, away from pixels, and towards the blockchain, towards provenance, and towards Truth.
Concluding Thoughts
We're in a period of transition. Like the internet of 1995, we're trying to figure out how to make use of these tools that we have and just like there was a learning curve with using computers and accessing the web, there will be a learning curve with interacting with the blockchain. I may look back at this post a couple of years from now and disagree with my position here, but censorship is not the answer. Whatever solution we decide to use needs to be rooted in the first principles of a blockchain. Among those include censorship resistance, immutability, and distributed consensus.
-Rayo
Interestingly enough, sometime between late 2020 to early 2021 OpenSea removed the following phrase from their Twitter bio: "A marketplace for the decentralized web." Internet Archive
In fact, almost no NFT actually stores the art on the blockchain, doing so would be way too expensive. Most NFTs are just a representation of the metadata for the art.
I realize here that until we all become used to minting every creative endeavor as an NFT, we will run into people having their artwork minted without their knowledge. In such cases we still need to rely on provenance, but rather than looking at which token came first we will need to look at which was signed by the real artist.