Opinion by: Yat Siu, executive chairman and co-founder, Animoca Brands
A discussion on digital property rights, copyright, intellectual property, the open metaverse, AI and value without physical form.
When I attend conferences and similar public events, someone almost always approaches me to ask how cryptographic tokens (fungible or non-fungible) can have value even though tokens are virtual and do not exist in the physical world. It’s a surprisingly common question, especially one-on-one.
Virtual objects like NFTs and cryptocurrencies are both digital and intangible; their existence is not based in the real (physical) world, and (unlike digital currencies) they generally do not have backing by real-world institutions.
The ability to have value (specifically, monetary worth) is crucially important regarding the open metaverse, the decentralized internet of Web3 characterized by true digital ownership (see What IS the open metaverse?).
I recently delved into the value of the virtual during an interview with CNBC, which may prove quite helpful to some readers. I’d like to discuss this topic in greater detail and with some historical context.
When discussing whether something that doesn’t exist in the real world can have real monetary worth, it is important to remember that intangible things have carried value for centuries; the key is ownership and the benefits associated with that ownership.
How the ownership of ideas created the modern world
One of the most important building blocks of modern industry and innovation-based economies was laid down more than three centuries ago in Great Britain with the long form title of “An Act for the Encouragement of Learning by Vesting the Copies of Printed Books in the Authors or Purchasers of Such Copies, During the Times Therein Mentioned.”
Also known as the Statute of Anne and the Copyright Act of 1709 (or 1710), this legislation provided the basis for modern copyright and intellectual property laws by establishing that the author of a particular work, not its publisher, was its rightful owner.
The statute marked a pivotal moment in history by distinguishing between creators and distributors in much the same way that today we distinguish between creators (artists, writers, musicians, etc.) and the platforms that distribute their works (Netflix, Medium, Spotify, etc.).
By granting creators exclusive rights to their works for a limited time, the Statute of Anne and subsequent acts established an economic framework for intellectual property under which creators could retain control and financial benefits over their works. At the same time, society gained access to those works through public libraries, book sales and similar means of distribution.
The result was a veritable explosion of literature, science and philosophy that fueled the European Age of Enlightenment and the Scientific Revolution.
This period in history saw the rise of literary giants such as Jane Austen, Victor Hugo and Charles Dickens, and intellectual titans including Voltaire, Rousseau, Kant, Hume, Mary Wollstonecraft and Adam Smith. In the sciences, the publicly available work of visionaries like Charles Darwin, Gregor Mendel and Marie Curie allowed us to radically advance our understanding of the physical world.
The ability to own their ideas brought fame and financial independence to innovators, enabling them to challenge norms, push boundaries and distribute groundbreaking ideas. Copyright provided an economic incentive to create and share idea-based works, ensuring that contributions would endure and inspire future generations.
Copyright was so powerful and impactful that other nations followed with their own measures, including the United States with its Copyright Act of 1790.
Copyright and other forms of intellectual property protection have been accelerating innovation and powering economies for over three centuries. One of the most notable examples of this effect is China.
China was a free haven for IP infringement. Pirated digital and physical goods were prevalent until the 1990s and early 2000s, when China began to strengthen its IP protection. This contributed to a meteoric rise in domestic Chinese innovation, and today, China is the world’s leading generator of ideas in the form of scientific studies, patents, technology, content, etc.
China’s reforms to IP protection in the 1990s and early 2000s contributed to an explosion in the number of annual patent applications, considered a proxy indicator of innovation (image from Our World in Data)
Owning the work of our minds
Today, it is widely acknowledged that intellectual property is subject to ownership just like material things, even though it is intangible and time-bound. We recognize that copyright, trademarks, patents and similar measures establish and protect ownership of the intangible.
In a previous essay, I mentioned the work of the philosopher John Locke, describing the man as “one of the OGs in the field of ownership and a major inspiration for both the European Enlightenment and the US Constitution.”
Loosely stated, Locke reasoned that a person has a natural right to own the labor of their “body” and “hands.” Copyright applied this Lockean view to the intangible products of the mind.
Recent: Why crypto’s next breakthrough could start in the classroom — Animoca’s Yat Siu
As I noted in that essay, Locke’s reasoning — that a person’s labor generates property — provided a strong basis for “ownership of intangibles including intellectual property, usage time, data, and the derivatives of data.”
Intellectual property is fundamentally intangible: Scientific breakthroughs, literary works, musical compositions and various other creations of the mind emerge “from thin air” and without fixed physical form.
In capitalist economies, the protection of intellectual property plays a crucial role in supporting and incentivizing creators, making it possible for the work of our minds to enjoy commercial success, distribution and longevity. Without IP protection, entire industries (including technology, science and medicine) would be severely stunted by the lack of economic incentives to undertake research and development.
It is no exaggeration to say that the Statute of Anne changed the world by launching a framework for creators to own and protect the work of their minds, which in turn made it possible to enhance and sustain innovation.
The introduction of intellectual property protection laid the foundation for ownership over the intangible. It enabled our minds to create intangible capital assets, thus fuelling the economic engines of wealth generation. Just as importantly, copyright granted rights explicitly to creators, helping to decentralize the concentration of power away from big publishers.
Ownership of the intangible represents such obvious and immense value to us at Animoca Brands that we made the advancement of digital property rights our core mission.
The economic power of assets without physical existence
It is well established in traditional business and finance that the intangible can have worth. Brand equity, intellectual property and goodwill are all considered valuable. The reams of intangible data you produce daily through your online activities are highly prized by companies and platforms that use it (and sometimes abuse it) to extract value from you.
Consider that intangibles already dominate the global economy:
The US Patent and Trademark Office (USPTO) estimated that in 2019, IP-intensive industries contributed 41% of US domestic economic activity, supporting 63 million jobs (44% of total US employment).
The World Intellectual Property Organization (WIPO) estimated that in 2023, intangible assets were valued at $62 trillion — multiples more than the total market cap of gold (about $17 trillion to $25 trillion).
(On a related topic, the sheer economic power of IP makes recent suggestions by Jack Dorsey and Elon Musk that we should “delete all IP law” all the more bizarre. Removing something that has successfully driven innovation, investment and development for more than 300 years hardly seems like the wisest course of action. I discussed this matter in a thread on X.)
Blockchain technology is a game-changer because it can provide provable ownership, scarcity and economic opportunities for intangible assets in a decentralized manner at minimum cost, quickly and securely.
In a non-blockchain framework, a public record of ownership for an asset is maintained by a trusted central authority, often a government agency. This presents significant challenges, including security, barriers to access, poor efficiency, high costs to owners, red tape and the poor cost-effectiveness of protecting items of relatively little worth.
In blockchain-enabled frameworks, however, decentralized and immutable ledgers can greatly reduce waste, vulnerability and opportunity loss while providing and automating important record-keeping functions more efficiently and securely than centralized systems. But that’s not all.
The work of artificial minds
IP-based value creation is particularly critical in the context of the artificial intelligence revolution currently underway.
IP protection recently gained attention through a viral trend of AI-generated images in the style of Hayo Miyazaki, the legendary founder of Studio Ghibli. This trend brought to the forefront some concerns about AIs that are trained using protected IP and the potential impact that easily generated imitations have on rightful IP owners.
The film industry has been wrangling with this issue for years:
“OpenAI, a major US artificial intelligence company, and Google both wrote to the Office of Science and Technology Policy about an AI action plan this month, making the case that it would be beneficial for AI developers to be able to use copyrighted materials to train AI…
“SAG-AFTRA, the union that represents about 160,000 performers, wanted film and TV producers to obtain consent from actors to create and use their digital replicas. They also fought for actors to be compensated at their usual rate — even if a digital replica of them performs the role.”
CBS News, March 17, 2025
These are thorny issues that will impact most industries, sooner or later. Can a society successfully legislate to protect the work of our minds from the highly efficient imitative assaults of artificial intelligence? Will AI regulation enhance industries or merely restrict innovation and competitiveness?
There is a technological solution to some of the concerns around AI and copyright. Blockchain provides a secure and trustable type of framework for large-scale tracking, provenance, ownership and various other aspects of intellectual property that are currently being challenged by generative AIs.
Even better, blockchain can also facilitate usage tracking and royalty payments related to ownership of individual assets, even for assets of very low value.
In the AI-driven world of the near future, blockchain technology can be the basis for efficient mechanisms that provide fair rewards and accreditation to creators whose intellectual property fuels AI (a subject I addressed briefly in my TED Talk).
Digital property rights: The next frontier
When someone asks me how NFTs or cryptocurrencies can have real value despite being intangible, I usually ask them the same question about the work of their favorite musician, author or filmmaker. Most people have a fundamental appreciation for intellectual property rights in the context of “traditional” industries because those industries have considerable experience managing ownership of the intangible.
Intellectual property is recognized to have real value without physicality, and creators have the right to ownership over their intangible creations, empowering them to create capital “out of thin air” through the work of their minds. This also applies to virtual objects (and, indeed, virtual objects often represent or are linked to intellectual property).
Whether you own an idea, something you wrote, a digital currency, or an NFT, the key point is ownership and its associated benefits. Ownership of something (virtual or real) confers some degree of opportunity that would otherwise not be possible without that ownership.
As the world embraces the digital frontier, the mission of Animoca Brands strikes me as more relevant than ever: to make available digital property rights for all, thereby helping to ensure that all creators can be rewarded fairly not only for their own creations but also for their relative contributions to the work of others (such as AIs, social networks, advertisers, remixers, etc.).
The same principle of ownership over the intangible that helped fuel the Enlightenment, the Scientific Revolution, and the Information Age can now be extended to our digital lives in the decentralized open metaverse, where technological frameworks already enshrine provable ownership of the virtual, and where creating and accessing virtual assets is inherently democratic and easily available to all participants.
A little over 315 years after the Statute of Anne began to pave the road that leads to the open metaverse, the confluence of technology and property rights is now poised to unlock nearly unimaginable creativity, economic empowerment and progress for billions of people.
Opinion by: Yat Siu, executive chairman and co-founder, Animoca Brands.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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