By this point, who is surprised to hear a tech startup is complicit with digital piracy – even when it isn’t brazenly named OpenSea?
Since 2017, OpenSea has hosted a cryptocurrency marketplace for Non-Fungible Tokens (NFTs), unique identifiers for digital objects. Although these technologies are new and, to many of us, baffling, OpenSea’s story will sound familiar to creatives who have watched platforms like YouTube and Facebook profit from stolen content.
We saw how social media giants facilitated copyright infringement to drive up user engagement. But now, on new services like OpenSea, users are minting stolen art as NFTs and selling their plunder. Blockchain technologies were supposed to ensure authenticity and provenance. Instead, they’re allowing internet users to steal other people’s work, while tech companies permanently record thefts in digital ledgers for non-governmental currencies.
Preying on creatives isn’t innovation. It’s exploiting actual innovators for profit. We’ve seen it before with social media, we’re seeing it now with NFTs, and we’ll see it again in the metaverse.
Big Tech’s Playbook
Since the dawn of social media, there’s been a playbook for bringing startups to lucrative sales or initial public offerings (IPOs). Eager tech entrepreneurs can build (and have built) their fortunes on the backs of creatives, in three easy steps:
- First, create a platform where users can post text, images, sounds, and/or videos. Thanks to flawed court interpretations of 1990s-era laws, there’s little risk of liability for what people post.
- Next, turn a blind eye when they upload illegal materials. Free and convenient access to creative works entices people to platforms.
- Finally, monetize all that content. The traditional method is selling ads.
YouTube is a classic example. In 2006, co-founder Steve Chen decided to “concentrate all our efforts in building up our numbers as aggressively as we can through whatever tactics, however evil.” YouTube soon was sold to “
Don’t Be Evil” Google for $1.65 billion – despite internal objections that YouTube was “80% illegal pirated content.”
Facebook followed suit. It introduced video in 2007 – NINE YEARS BEFORE creating its copyright protection tool, Rights Manager. Predictably, small creatives lost ad revenues as their videos were “freebooted.” Then, Facebook raised $102.4 billion in a 2012 IPO.
OpenSea Charts the Usual Course
Like predecessors that don’t use ships as trademarks and haven’t launched websites from the uninhabited British Indian Ocean Territory, OpenSea does little to deter copyright infringement while fostering a booming marketplace.
OpenSea doesn’t worry about illegal content because it is largely immune to prosecution for user activities, thanks to Section 230 of the Communications Decency Act. Meanwhile, OpenSea gets 2.5% from every sale. That means it profits directly from pirated art.
As CoinDesk explains, “OpenSea and its investors don’t need to care about plagiarism because it actively helps their business model.” While OpenSea makes money, “it’s creators’ work on the line.”
Remembering internet history, we read OpenSea’s tweet, “We’re experiencing unprecedented growth, & scaling our approach to buyer safety is essential,” with a raised eyebrow. What they’re really saying is they’re not going to do a goddamn thing about infringement.
It’s becoming clear that IP crimes will become worse in the metaverse, where NFTs already function as deeds for virtual space.
What will happen to the film industry when pirates mint NFTs for pre-release movies and show them in simulated theaters, owned by no legitimate distributor? What will happen to the music industry when live concerts are illegally streamed to virtual stadiums, complete with stolen likenesses of performers?
The answer, of course, is that the devastating effects of Big Tech’s lack of accountability will only escalate. We know that digital video piracy already costs the American economy at least $29 billion and 230,000 jobs each year. We’ll soon see how much worse the news will get.
At least one online art community, DeviantArt, has taken steps to protect its members from NFT theft. But creatives can’t police the internet by themselves – and we shouldn’t have to. We need tech companies like OpenSea to be held responsible for the harm proliferating with their assistance. Until then, creatives’ hard-earned money will continue to be diverted into the pockets of copyright infringers.
NFTs promise to someday create a new class of tech trillionaires – but if that day comes, will there be any creatives left?