Videos and images uploaded to social networks, user content creation in Web 2 and Web 3, fungible and non-fungible tokens, virtual land purchased in the metaverse, who owns them, what are the Terms and Conditions of each platform, how is ownership recognized in Web 3?
When we make the well-known click on the Terms and Conditions of each platform, we often cede to the service providers a significant amount of rights over our data, metadata, privacy, content creation[1], disposition, management and custody of virtual assets, among others.
In this article, we will focus specifically on the creation of content and virtual assets that are in the midst of evolving with the transition from Web 2 to Web 3. Let’s remember that Web 1 was a first version of the network, where web pages were the link for interaction with the user, who had no intervention in their content and only observed the information presented by the web creator.
Web 2 refers to the version of the Internet that most of us know, dominated by companies that provide services in exchange for personal data, centralizing the service and not allowing users to intervene in the meaningful decisions of each platform. The creations belong to the users and, by subscribing to the terms and conditions, they grant a license of use in favor of the owners of the platforms[2].
A clear example of Web 2 is social networking, where users have begun to interact and share information, videos, and images through centralized platforms (Facebook, Instagram, Tinder, etc.). We can say that the fundamental change from Web 1 to Web 2 is in the front-end.
Web 3, in the context of Ethereum, refers to decentralized applications running on the blockchain to achieve a distributed and transparent system that promises greater privacy and security for users, allowing everyone to participate without trading their personal data. On the other hand, it allows users to be effective owners of their digital creations and to monetize them.
With the advancement of the blockchain, which has given rise to tokens, cryptocurrencies and NFTs (non-fungible tokens), the creation of digital assets and virtual land, as well as their exchange and trading, has risen to unimaginable levels.
Likewise, platforms based on a DAO (decentralized autonomous organization), an organization controlled by algorithms or smart contracts, are not bound by any particular law and allow a company or institution to operate without hierarchical management and decisions made by the users themselves, through voting or referendums[3]. In addition, many decisions have to do with user-generated content.
In other words, the fundamental change between Web 2 and Web 3 is in the backend.
To understand the evolution of NFTs, it is essential to understand the metrics[4]:
- The number of shoppers grew from 75,000 in 2020 to 2.3 million in 2021 and 2.5 million in 2022. In addition, the number of cryptocurrency wallets trading NFTs increased from 89,000 in 2020 to over 2.5 million in 2021.
- The turnover of NFTs in 2021 was $24.9 billion.
- The value of the NFT market is currently estimated at over $16 billion and is expected to continue to grow.
- Expectations for the growth of the NFT market: We will analyze these figures with respect to the year 2022. In January, the average price of an NFT reached USD 6,900, but since then it has fallen below USD $2,000. On the other hand, in terms of total daily sales, on January 31, 2022, NFT exceeded $160 million, while on March 3, it did not even reach $30 million. This decline may be due to the conflict between Ukraine and Russia, as well as geopolitical tensions in the cryptocurrency market.
- The Merge is considered the most expensive NFT sale to date. Its price was $91.8 million.
- The countries with the highest NFT ownership rates, according to data published by Finder 2021, are the Philippines with 32%, Thailand with 26.6% and Malaysia with 23.9%.
Finally, although NFT purchases have declined in recent months, there is a strong correlation between those who know what NFTs are and those who buy and sell them. So as more people become aware of this new marketplace, NFT sales and purchases will increase.
The world’s largest specialized marketplace for NFTs, OpenSea, recorded the highest financial volume on May 1, 2022. On that day, $543,781,619 were traded.
As we said earlier, Web 2 allowed users to participate in the creation of content that was initially owned by large technology companies that used it to make money.
Subsequently, the platforms changed their terms and conditions, adapting to the changes demanded by the users. Currently, it is made clear that the content created by users belongs to them, but that by signing the aforementioned agreement, people grant the company a series of permissions to use it.
With the advent and development of the cryptographic technology on which the blockchain is based, user creations and digital assets no longer belong to large technology companies. Creators can prove their ownership As a result, they can be stored and/or transferred between the same users or companies, uploaded to networks, or auctioned on dedicated sites; for example, NFTs can be auctioned on the OpenSea marketplace.[5]
The NFTs will have a “certificate of ownership” that will make them unique and unrepeatable in the digital world. In fact, the NFTs[6], will have a huge number of features, among which stand out: container of photos, videos and images, original works of art, collectible virtual objects, unforgettable sports moments, records of all kinds, certificates of ownership, uses in the framework of smart contracts, certificates of investment in cryptocurrencies, tickets to events, digital passports, certificates and professional titles, titles of ownership, among others. From a gaming point of view, skins, weapons, common, special and legendary goods and much more!
Thus, within the framework of Web 3, the power of creation, ownership and monetization of users’ creations and virtual assets remains in their hands, which is a milestone in the history of technology and another step in its evolution.
Therefore, in order to be aware of our rights and obligations as users, both in the platforms that stand out in Web 2, and in those that are booming in Web 3, we must take into account what is stated in the terms and conditions of each of them.
This is essential for the protection of people’s rights, as well as for the development of technology, the understanding of which promotes its adoption and growth, benefiting countless people.
At Siltium, we are aware of these concepts and ensure that the development of all our products is carried out with the appropriate responsibility and professionalism. Clear rules and transparency are fundamental and non-negotiable principles of our company.
[1] Content refers to all works of authorship, creative works, graphics, images, textures, photographs, logos, videos, audio, text and interactive features, including but not limited to NFT.
[2] See, for example, Article 3.3.1 of the Facebook (now Meta) Terms and Conditions: “In order to provide our services, we need you to grant us certain permissions, such as permission to use the content you create and share. Certain content you share or upload, such as photos or videos, may be protected by intellectual or industrial property laws. You own the intellectual and industrial property rights (such as copyrights or trademarks) in the content you create and share on Facebook and in the products of other Meta Companies that you use. Nothing in these terms takes away any rights you have in your own content. Therefore, you are free to share your content with whomever and wherever you want. However, in order for us to provide our services, you must grant us certain legal permissions (called “licenses”) to use your content. We will use these licenses only to provide and improve our products and services as described in paragraph 1 above”. See https://es-es.facebook.com/legal/terms (accessed 07/18/23).
[3] An example of a DAO is Decentraland, a virtual reality world built on the Ethereum blockchain where users can create and monetize services and content. MANA is the ecosystem’s own token that can be used to purchase the various items within the network, such as the virtual parcels of this innovative immersive world. See https://decentraland.org/ (accessed on 07/19/23)
[4] https://hellosafe.com.mx/blog/nft-cifras-clave (accessed on 07/19/23)
[5] See more in: https://marketing4ecommerce.net/opensea-que-es-y-como-funciona-el-mayor-marketplace-de-coleccionables-digitales-de-internet/
[6] Example of fungible tokens: cryptocurrencies. Example of non-fungible token: a digital artwork with a certificate of authenticity.
