Marta Belcher Of Filecoin Foundation - Storing Humanity’s Most Important Information, Plus: P2E Hybrid Expo Asia, Lawsuit Delivered By NFT, And More…

NFT Filecoin | Filecoin Foundation

As much as we know about the NFT space, there is always more to learn. Marta Belcher is the Chair and President of Filecoin Foundation on a mission to preserve humanity’s most important information and create the internet of everyone. Marta makes extraordinarily complex concepts easy to understand in the world of blockchain. In this episode, she discusses how Filecoin offers a solution to incentivize people to join in creating a decentralized web and what role The InterPlanetary File System (IFPS) plays in all of this. She also shares incredible insights into copyright licensing in the NFT space and offers a better understanding of the different ways you can earn as a creator. Join your hosts, Jeff Kelley, Eathan Janney, and Josh Kriger, for this fascinating and information-packed episode, and don’t miss Martha’s valuable nuggets of wisdom.

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Marta Belcher Of Filecoin Foundation – Storing Humanity’s Most Important Information, Plus: P2E Hybrid Expo Asia, Lawsuit Delivered By NFT, And More…

This episode features Marta Belcher, President and Chair of Filecoin Foundation. Besides her role at Filecoin Foundation, Marta is the General Counsel and Head of Policy at Protocol Labs and also serves as Special Counsel to the Electronic Frontier Foundation. Marta is a pioneer in Cryptocurrency Law and has spoken on the topic around the world, including in the US Congress, European Parliament, New York Senate, the OECD, and at Davos during the World Economic Forum. Marta has drafted amicus briefs in the US Supreme Court and US appellate courts for high-profile public interest organizations, including EFF, the Center for Democracy and Technology, Public Knowledge, the Cato Institute, the National Consumers League, Project Gutenberg, and the Blockchain Association.

Marta has been recognized twice by the Financial Times Innovative Lawyer Awards, was named to Law360’s list of Top Attorneys Under 40, and was number 18 on CryptoWeekly’s list of Most Influential Women in Crypto. Filecoin Foundation is an independent organization that facilitates the governance of the Filecoin network and supports the growth of the Filecoin ecosystem and the decentralized web. Marta, welcome to the show.

Thank you so much for having me. I’m excited to be here and talk all about NFTs.

What do you do with all your time?

I originally met Marta in church. I know she goes to church but it’s not the church you might think of. We will let her talk a little bit more about that. It’s great to have you on the show, Marta. What an honor. This pulls on our heartstrings because Jeff and I got into crypto with Filecoin. It made sense to us as the first no-brainer thing that we got involved in the entire space. We had done some decentralization in our food tech business. It was a logical thing that this should be available to every human being on Earth and company. It’s an honor to have you here.

It’s honestly such an honor to be here. It was funny to meet you in a church because I think of that as the ultimate centralized institution. We thought it was a great place to host what we called the Decentralized Web Gateway during Davos in May 2022 and The Sanctuary there.

The church is also, according to some, the first franchise operation.

That’s well put. That’s a good point. It was maybe more decentralized than I’m giving it credit for. It was cool to meet you there in Davos. We will be back there hosting the Decentralized Web Gateway again at The Sanctuary in Davos in January 2023. Hopefully, we will see you again, Josh.

It’s possible. The umbrellas were clutch. Thank you for those. I’m thinking there’s got to be some good hand warmers or something associated with the next one. A good reason for people to get over to the church. Let’s get to the story at hand, which is what Filecoin is up to and how you all played this world of magical, non-fungible projects. Starting with a little bit of the origin story, maybe you can kick it off there. Go back to 2017. What was going on?

When it comes to Filecoin, I had the same experience as you. It makes sense. The thing that is cool about Filecoin is that it’s not just about cryptocurrency. It’s about building the next generation of the web. To give the background on what Filecoin is and how it works, for me, the most important thing about cryptocurrency is that it creates the ability to program your money, being able to write computer code where you can automatically transfer value when a condition is met. It has always made sense to me as a former intellectual property lawyer.

In the IP world, to give you an example, you could say for every second of a song that I play automatically transfer 1.1 million of a cent to the singer and the songwriter. That can all happen instantly and automatically with no intermediary between us across the world, which isn’t tenable using the traditional payment systems.

With Filecoin, we use that same program with money technology to create a decentralized file storage network. The idea is if you have extra storage space on your computer hardware, you can rent it out to others who will pay you to store their files or rather pieces of their files. A computer program will regularly check those files that are still being stored on your computer. If so, we will automatically compensate you with cryptocurrency. We like to compare it to Airbnb for file storage. Storage providers are renting out their extra storage space to earn Filecoin, and users are spending Filecoin to store their files on other people’s computers.

It’s such a helpful explainer. The question that comes to mind is, which individual or group was hanging out and came up with this idea?

The most important thing about cryptocurrency is that it creates this ability to program your money. Click To Tweet

This is all Juan. Initially, Juan, back in 2014, had developed IPFS, the InterPlanetary File System, which is the backbone of the decentralized web, this decentralized storage system. The issue with IPFS and all decentralized storage systems is how do you incentivize people to provide that decentralized storage. It’s one thing if you have the ability to do storage in a decentralized way but you need to provide incentives for people to provide that storage. The question is, “Who’s going to shoulder the cost of the infrastructure for this decentralized version, the web?” If you are trying to create a decentralized version of AWS but you don’t have Amazon to go work with their customers, how do you do that?”

That is what Filecoin was the answer to, was the ability to actually incentivize people to provide storage and make it available. That is the key that has unlocked this ability to have a decentralized version of the web. Filecoin sounds like a niche use case. It’s actually a foundational technology for this decentralized version of the web, where you can create alternatives to the three services that make up the vast majority of storage on the internet nowadays from Amazon, Microsoft, and Google, and not have the issues where you see one of these companies suffer blackouts and have vast SWAS of the web go down for hours and not have these single points of failure. That’s the idea behind Filecoin.

We think about all the stuff we store in our houses and how much space that takes up but we don’t think about the massive amount of storage that’s required for all these converging technologies.

You don’t think about it until there’s an outage. We’ve repeatedly seen AWS go down. Suddenly, people’s network Toaster’s stop working or whatever. News sites go down. You suddenly realize when you see these blackouts how much of our web infrastructure is dependent on a couple of companies. We believe that you can create a much better version of the web if you combine the storage capacity and computing power on all of our individual devices into a supercomputer network and store multiple copies of the data across those devices. On that decentralized version of the internet, websites are going to stay up, even if some nodes fail. The availability of information isn’t dependent on any one server or company. It’s a much more robust platform for what we say is humanity’s most important information.

Part of the reason why it spoke to us when we first heard about it has to do with collaborative consumption, the idea of access capacity, and working on that. Clearly, things like Kazaa, Napster, BitTorrent, and all those, even though some of them grew out of maybe dubious structures, ultimately it was collaborative consumption. People are storing this stuff on their computers, and you are getting bits and pieces of it from everywhere.

That’s what was happening in the early 2000s. It’s interesting how it evolved and how disruptive that was then with blockchain coming into its own. It was such an obvious use case for us, such a great fit, and amazing execution. There were a lot of companies that had conveyed similar visions across a number of different verticals in blockchain coming out of that time.

It was awesome to see Filecoin completely crush it and continue to. That’s great. Your background is in Copyright and IP Law. To a large degree, this is a relevant topic for us in the world of NFTs. Something you might be able to give us a little bit of background, the basics of Copyright and IP Law, as it relates to NFTs and ownership. We don’t get the opportunity to sit down with somebody that has a background such as yours and a willingness to speak. A lot of people aren’t willing to talk about it because maybe they don’t feel comfortable. Please, indulge us.

I was formerly an intellectual property litigator. I did a bunch of copyright cases. That was what led me into the world of cryptocurrency back in 2015 when I got interested in the space. Being an IP lawyer turns out to be useful in the cryptocurrency space, even though I think of myself now as more of a cryptocurrency lawyer than a copyright lawyer. Once upon a time, I was a copyright lawyer. The idea with copyright is that it’s a body of law that protects creative works. One thing that a lot of people don’t realize is that under US Law, you automatically get copyright in a work as soon as you create that work.

If you go and scribble down something on a piece of paper, you have a copyright on that thing that you scribbled. You can go and register that copyright, and that will get you some additional benefits but you don’t have to go and register a copyright to have protection for a particular artwork. All you have to do is create it. One of the things that are important in the NFT space is understanding what is the difference between transferring copyright and transferring an NFT.

You, as the creator of a particular creative work, can transfer copyright to someone else using a standard contract. You can transfer the copyright to someone else. You can say, “I don’t own it anymore. You own it now.” Something you can do is you can license the copyright. You can say, “I still own the copyright to this particular artistic work but you and other people can use it in any particular way that you decide to write a license to do that.” This is all governed by Contract Law.

This comes down to what you and others contractually agree that you can do with the particular work. There’s a lot to be said about how copyright licensing works in the real world but when you get into NFTs, it gets super confusing because people think that when you have an NFT and are buying an NFT, the conception is you are buying the underlying work or the rights to the underlying work. In actuality, and this is the headline, buying an NFT has nothing to do with buying the rights to use or have the underlying work.

Those are two totally separate things. When you buy an NFT, what you are buying is being associated on a blockchain ledger with a particular representation of a piece of work or a thing that points to a piece of work. You are not necessarily buying and not by default buying rights to use that work. You are not buying the copyright itself. You can, if you want, as the owner of a particular work, as part of selling an NFT, also license the rights to the buyer.

In a contract, you can say, “The buyer of this NFT can use this work in X, Y, and Z ways. They can’t use it commercially but they can use it personally.” Maybe they can display it in their home but they can’t display it on the street or you could transfer the entire copyright of the work to the NFT buyer but you don’t have to.

NFT Filecoin | Filecoin Foundation

Filecoin Foundation: The issue with IPFS and, and all decentralized storage systems, is how do you actually incentivize people to provide that decentralized storage. It’s one thing if you have the ability to do storage in a decentralized way, but you actually need to provide incentives for people to provide that storage.

What this comes down to is Contract Law. It’s what you are putting in the terms and conditions when you are buying a particular NFT. That is something that a lot of people are confused about this idea of, “I’ve bought an NFT. What do I own?” The answer is, by default, nothing, but what you have to do is go look at the particular contracts that govern this transaction and see, “What did I buy when I bought the NFT? Do I now have the rights to display the work? Do I have the rights to use the work commercially? Do I own the copyright?” That’s something that is not well understood.

It’s easy to forget when you are in the world of Web3, NFTs, and blockchain, that there’s this rich history, legally speaking, in almost any category you can think of about how these businesses operate, this included. You get in this idea, “We are doing something disruptive here. It’s brand new and this and that,” but the reality is there is that precedent there, and you have to rely on it in a lot of ways.

I’m curious if you heard of the situation that Seth Green encountered, where he bought a Bored Ape, where, generally speaking, we have this as an example that a buyer can use the likeness of how they want. That’s how they’ve conveyed it. He said, and if we believe him, that his Ape was stolen. He was hacked. Somebody stole that Ape.

Proving that that is what happened may be tricky but in that case, somebody else has that Ape in their wallet and was transferred from one wallet to another. Seth claims that it was stolen from him, which we have no reason not to believe him but it’s hard to prove. A) I’m curious if that person popped up or if somebody started using that IP on their own, what do you think about that? B) Since he doesn’t own that Ape anymore, he has a TV series that’s built around that particular Ape. He’s using the likeness in that series. It’s a central character of this hybrid, almost Roger Rabbit-type series. I’m curious as to your thoughts on this interesting case.

What I would say about that and the things that bring up for me is a couple of different interesting things to say. One interesting thing about that is who is the original owner of the copyright. Originally, the copyright was owned by the person who created the work, the company that created Bored Ape, and the actual artist. When someone buys the NFT, there’s a question there as to, “What did the buyer of the NFT buy?” One thing they bought is the fact that this blockchain ledger will reflect that they are the owner of this NFT.

They definitely bought that. Now suddenly, this blockchain ledger no longer reflects that. It reflects whoever stole this Bored Ape NFT. You would have to go look at the particular terms, conditions, and the license to say, “What did the buyer buy?” Typically, with Bored Apes, they have done a pretty good job of doing relatively open licensing around the actual images to enable people to use those. Let’s imagine it wasn’t a Bored Ape. Let’s imagine that it was a CryptoKitty. With CryptoKitties, it was interesting when you bought a CryptoKitty, you would get a license to use the image of that CryptoKitty but only in non-commercial or commercial ways up to $100,000.

If you were the person who owned the CryptoKitty, you could post that CryptoKitty picture on social media. You could even use it in a small commercial thing and only make up to $100,000 because that’s what the contract said you could do. There’s an interesting question, depending on how you write the contract, “If that gets passed along to the next person, do you still retain those rights?” The answer to that literally comes down to Contract Law. You can look at what the contract says and figure out, “If then you pass that along to the next person, do you still get to use it with up to $100,000 per year?”

That comes down to what’s in the contracts. What you are seeing now is a bunch of interesting ways in which NFT creators are creating different kinds of standardized licenses, where we can start putting rules and standards and norms around how you do these transactions in a way that makes it a little clearer what’s going on. One of the things that happen when we talk about, “What happens with copyright in a particular NFT case,” the answer is, “What does the contract say?” It requires a lot more lawyering than I think would be ideal in a Web3 environment.

This is to come. This is why we think the space is exciting because there’s going to be a lot of evolution. If you can make the smart contract say some of the things, then they can be automated. You don’t have to worry about lawyers and people enforcing it or whatever. All the details, it takes a lot to enforce them depending on the actual details of the contract. That brings me to my question. I’m a creator. I spent a lot of time with creative people who make things. They love to make things. That’s all they want to do. They didn’t want to work out all the details of it that are licensed for 1 or 2 years, up to $100,000 or all this stuff.

The idea of an NFT is that it’s a way for an artist to monetize what they are doing or at least a new avenue for monetization that potentially cuts out the middlemen. It’s a complicated question. I want to know what some of the implications are there for IP buyers, sellers, and NFT artists. I love it if you speak a little bit about how much this does or doesn’t solve the problem of the artist, who, in the end, they are going to have to maybe think about this Contract Law, anyway. Maybe there’s going to be a middleman who is a lawyer, who has to write the contract that wants their own percentage. Maybe they set up that contract. I don’t know. What are your thoughts on how this all plays out?

There are a couple of interesting points that go along with what you are saying here. One is NFTs are fantastic for creators because one of the things that allow you to do is to continue to receive payments and royalties as transfers happen downstream in a way that isn’t possible outside of this digital context. Typically, if I’ve sold a painting to you, a physical painting, and I’m the artist, I’ve made whatever I’ve made out of that transaction.

When you turn around and sell it for 10X a couple of years later because now, I’m super famous, too bad for me, I made what I made in the first instance. One of the things to me that is cool about NFTs is that it gives you the ability to program in. Every time there’s an additional transaction, the original artist is going to get a percentage of that NFT revenue.

That is one of the things to me that’s so exciting about NFTs for creators and one of the reasons that this technology is important. Another thing I would say about that is, fundamentally, this comes down to you are typically selling an NFT using some store of the platform. What this all comes down to is what are the platforms developing in terms of what are their standard licenses? How are they developing the terms and conditions such that when you go on that platform, you can easily figure out what you are conveying to the buyer? It doesn’t necessarily require you, as a creator of an NFT, to go and talk to a lawyer.

NFT Filecoin | Filecoin Foundation