Author: David Bola
Photo Credit: Reworks Festival
Could you introduce yourself and the Rare Candy 3D project?
I’m mostly known in the crypto scene as Rosspeili. I’m the co-founder and head of corporate affairs / partnerships at Rare Candy 3D, which is essentially a virtual publishing house of scarce physical and digital collectibles registered on the Ethereum blockchain*.
From what I gather, NFTs (Non Fungible Tokens) can be a way to certificate pieces of digital art. They can act as a proof of ownership. However, we already had copyright laws regulating the art sector. What can NFTs do that pre-existing legislation couldn’t?
The way I see NFTs, (besides the technical aspect of how they work or what the technical properties they bear), is a form of digitally verifiable ownership contracts that can be attributed to anything that can be owned. That can be a digital asset, a physical asset, consumable can be a real estate document, or an event ticket.
Obviously we had copyrights before NFTs. However the main difference, is that a document certifying copyright ownership, in the traditional format would be a piece of paper, or a PDF, (delivered by a centralized authority – an agency, a government body, or a private company), that ensures whoever read this paper that “this thing is legit”.
With NFTs, you don’t have to rely on anyone to prove that this thing is real, because this is done by the consensus mechanism of the blockchain that holds this NFT vessel. You don’t have to show any documents to be eligible for an ownership contract.
You started working with the European Blockchain Observatory in 2017, a project supported by the European Commission. How did that connection happen and what is this organization’s objective?
I mostly got involved in this through Eva Kaili, who is a Greek EU-parliament member. She’s the chairman of the Panel for the Future of Science and Technology (STOA) in the European Commission, where she’s trying to push new technologies, while explaining to our representatives why we need to get ahead of the curve as Europe as a United territory and not be left behind China or the USA who are already miles ahead.
My job initially was to explain technical aspects they couldn’t understand on their own. I broke down concepts such as: what is the difference between a token and a currency. What is the difference between a stable coin and a cryptocurrency? In some cases even, we’re working on creating a proposed framework, guidelines that could be transformed into laws eventually.
Europe is not leading in the realm of blockchain, however I can say that we have a very positive approach. For example, we are not trying to fit cryptos into traditional legislation, like the USA are doing. Over there at the moment, anything that has to do with cryptocurrencies (and that has some value, some monetary value or promising monetary value) is flagged as a “security” or as a “dividend” matter.
This creates a lot of drawbacks for crypto projects in the United States, because in fact, they are not appropriately flagged.
Does that mean that they prefer to oversimplify what crypto related assets are, just to be able to fit them into pre-existing categories (and to avoid creating new specialized legislation)?
Correct. This is something we’re a step ahead in Europe. Not only do European legislators understand the difference, (or at least they’re trying actively to understand the difference between all these different aspects that this new technology brings to the table), but they also avoided restricting cryptos under a specific pre-existing framework. Depending on the usage and on the state, there are different regulations, different approaches, to different crypto projects. And I think this is at least positive.
Does the European Blockchain Observatory plan to create new policies in the future?
At the moment, there are only scattered groups working on a variety of proposals, but everything has to go through the commission first, hence the proposals that tend to see the light of being legislated are usually the ones tailored for an old and outdated EU commission audience. Some examples include the German Bundesbank’s proposal to create a European stablecoin pegged to the price of Euro, or the Dutch pilot which uses blockchain to register and manage municipal housing records, yet again, it all comes down to how compelling the proposal will sound in the ears of legislators, and how educated the proposing party is on the matter, and technology to be used, in order to be in position to chop the overall vibe into chewable pieces, easily grasped by the European nursing home.
There’s a geopolitical game going on between big international players in the world of blockchain, crypto and NFTs legislation and regulation. You identified the USA and China as key players. What are their objectives? Are there other key players?
The Chinese approach to this is kind of strict. People think that they’re very restrictive, because they banned cryptocurrency usage for civilians. That’s not the whole truth. China is one of (if not the only) the global leaders publicly praising blockchain technology and underlying its importance for the nation. The Chinese president even said that the country should lead in that space.
Something similar happens in the US. They were the first that started to regulate cryptocurrencies, with the first laws dating back to 2014, although they keep a relatively flexible stance if projects operating within the U.S. are comfortable with the set of rules subjecting such activities.
In Europe, we are somehow laying back and looking into what China and the US are going to do, to be able to learn from their mistakes, their experiments and then implement an even better model, while going back to a market oriented usage of NFTs.
I know we hear a lot about countries like El Salvador who have used the Bitcoin hype to propel fintech tourism and business, but the truth is we never really needed Elon Musk, or Bill Clinton (editor’s note – the former U.S president has been a vocal supporter of cryptocurrencies, most notably at a Ripple Swell event in California) to legitimize crypto. Bitcoin was working before these fancy names, it works now that they are desperately trying to abuse it, and it will keep working when they will be deceased.
We mostly hear about NFTs being exchanged between independent parties – an artist selling an art piece directly to a fan for example. While big brands aren’t fully committed to the market yet. Some are quietly preparing (Nike already holds a patent for virtual sneakers). Can we expect this market to grow until reaching the general public?
There is a huge market that’s waiting to adapt all these new usages. Now, the problems in some cases might be more of a logistical issue. If I create a physical asset, like a T-shirt for example, register it as an NFT and somebody buys it, how do I ensure that the t-shirt is sent to the owner of the NFT?
There are a couple of sketchy methods at the moment. NFT 42 came up with this process where you connect your wallet and your discord account through a portal. We can link the discord account to the blockchain presence, and since all activity on the blockchain is transparent, we can see the portfolio. That means we can ensure that this person actually bought the T-shirt. After going to this portal, they can drop you into a private discord server where you discuss with the company that issues the shirt and tell them, here’s the address where to send it.
Should individuals and companies anticipate the coming of this market or try to adapt as these technologies evolve? What are the benefits of participating in that conversation?
Super important question. When the Internet started, the army used it, banks used it… It was not for regular people right? You can sit back and wait for this technology to be developed and be handed over to you as a product, or you can try to participate.
You can talk to any project linked to crypto, even competitors. We’ve seen competitor projects helping each other. In the end, they all contribute to the broader ecosystem, that is based on the same set of rules. And I think this is very important.
Essentially most public decentralized blockchains are achieved by a large number of people working together at the same time from all over the world contributing however they can. You don’t have to be a coder or a programmer or like a tech genius. I think it’s just a new industry that opens new possibilities. And obviously it brings a lot of new positions. And we see this also in the human resources market at this time.
It takes a lot of energy to produce crypto-services. Of course, these services can be achieved using « clean » energy, but even so, the implementation of this new market implies new energy costs How can that problem be resolved?
The truth is that blockchain in general – not just bitcoins and NFTs, the entire blockchain industry -contributes to something around 1% of the global electricity consumption. It’s huge. But the problem here is the way we produce this electricity and not where we spend it.
We should address the issue of how we produce this power, we should analyze the way we are currently producing electricity. And we should fix that instead of blaming users.
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Lexicon
Ethereum Blockchain: Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether (ETH or Ξ) is the native cryptocurrency of the platform. Amongst cryptocurrencies, Ether is second only to Bitcoin in market capitalization.
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David Bola is the content editor of We are Europe Media. Formerly working at Radio Nova as a freelance journalist and hosts a monthly residency on Piñata Radio‘s soundwaves, with Ludotek, a show focused on video game music.