Source: Cointelegraph
Original: “The Value of Virtual Economies: Powered by Ownership of the Intangible”
Perspective from: Yat Siu, Executive Chairman and Co-founder of Animoca Brands
Discussion on digital property rights, copyright, intellectual property, the open metaverse, artificial intelligence, and intangible value.
Whenever I attend conferences or similar public events, someone always approaches me to ask how crypto tokens (whether fungible or non-fungible) can have value in a virtual context that does not exist in the physical world. This question is surprisingly common, especially in one-on-one conversations.
Virtual objects like non-fungible tokens (NFTs) and cryptocurrencies are both digital and intangible; their existence is not based on the real (physical) world and, unlike digital currencies, they typically lack endorsement from real-world institutions.
For the open metaverse—a decentralized Web3 internet characterized by true digital ownership—the ability to possess value (especially monetary value) is crucial (see “What is the Open Metaverse?”).
I recently delved into the virtual value in an interview with CNBC, which may be very helpful for some readers. I want to discuss this topic in more detail and add some historical context.
When discussing whether things that do not exist in the real world can have true monetary value, it is important to remember that intangible things have carried value for centuries; the key lies in ownership and the benefits associated with ownership.
One of the most important cornerstones of the modern industrial and innovative economy can be traced back over three hundred years to England, with a lengthy title that reads: “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.”
This legislation is also known as the “Statute of Anne” or the “Copyright Act of 1709 (or 1710),” which laid the foundation for modern copyright and intellectual property law by establishing the author of a specific work, rather than the publisher, as its legal owner.
The act marked a pivotal moment in history, distinguishing creators (artists, writers, musicians, etc.) from the platforms that distribute their works (Netflix, Medium, Spotify, etc.) in a manner similar to how we differentiate them today.
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 that allowed creators to retain control and economic benefits from their works. At the same time, society gained access to these works through public libraries, book sales, and similar distribution methods.
The result was a genuine explosion of literature, science, and philosophy, driving the European Enlightenment and the Scientific Revolution.
This historical period witnessed the rise of literary giants such as Jane Austen, Victor Hugo, and Charles Dickens, as well as the emergence of intellectual titans like Voltaire, Rousseau, Kant, Hume, Mary Wollstonecraft, and Adam Smith. In the scientific realm, the public works of visionaries like Charles Darwin, Gregor Mendel, and Marie Curie revolutionized our understanding of the physical world.
The ability to own one’s ideas brought fame and economic independence to innovators, enabling them to challenge norms, break boundaries, and disseminate groundbreaking thoughts. Copyright provided the economic incentive to create and share idea-based works, ensuring that these contributions could endure and inspire future generations.
The influence of copyright was so powerful that other countries began to follow suit, including the United States, which enacted its Copyright Act in 1790.
Copyright and other forms of intellectual property protection have been accelerating innovation and driving economic development for over three centuries. One of the most notable examples is China.
China was once a free haven for intellectual property infringement. Pirated digital and physical goods were rampant until the 1990s and early 2000s, when China began to strengthen its intellectual property protections. This led to a rapid growth of domestic innovation, and today, China has become a world leader in creative generation in forms such as scientific research, patents, technology, and content.
The reforms in intellectual property protection in China during the 1990s and early 2000s resulted in a surge in annual patent applications, which is seen as a proxy indicator of innovation (Image source: Our World in Data).
Today, intellectual property is widely recognized as being protectable by ownership just like tangible things, even though it is intangible and time-limited. We recognize that copyright, trademarks, patents, and similar measures establish and protect ownership of intangible assets.
In a previous article, I mentioned the work of philosopher John Locke, describing him as “one of the OGs in the realm of ownership and an important inspiration for the European Enlightenment and the U.S. Constitution.”
In short, Locke argued that a person has a natural right to own the fruits of their “body” and “hands.” Copyright applies this Lockean view to the intangible products of thought.
As I pointed out in that article, Locke’s reasoning—that human labor produces property—provides a solid foundation for “the ownership of intangible assets, including intellectual property, time usage, data, and their derivatives.”
Intellectual property is inherently intangible: scientific breakthroughs, literary works, musical creations, and various other products of thought “emerge from thin air” without fixed physical forms.
In a capitalist economy, intellectual property protection plays a crucial role in supporting and incentivizing creators, allowing the fruits of our thoughts to succeed commercially, spread, and endure. Without intellectual property protection, entire industries—including technology, science, and medicine—would be severely hindered by a lack of economic incentives for research and development.
It is no exaggeration to say that the Statute of Anne changed the world by establishing a framework for creators to own and protect their intellectual achievements, thereby enhancing and sustaining innovation.
The introduction of intellectual property protection laid the groundwork for the ownership of intangible assets. It enabled our thoughts to create intangible capital assets, thus driving the economic engine of wealth creation. Equally important, copyright clearly grants rights to creators, helping to decentralize power from large publishers.
The ownership of intangible assets holds immense value for us at Animoca Brands, to the extent that we are driving digital property rights as our core mission.
In traditional business and finance, the value of intangible assets has been widely recognized. Brand value, intellectual property, and goodwill are all considered valuable. The vast amounts of intangible data generated by your online activities every day are highly valued by companies and platforms, which leverage (and sometimes exploit) this data to extract value from you.
Consider the fact that intangible assets have already dominated the global economy:
(On a related note, the immense economic power of intellectual property makes Jack Dorsey and Elon Musk's recent proposal to “eliminate all intellectual property laws” seem even more bizarre. Abolishing a mechanism that has successfully driven innovation, investment, and development for over 300 years does not seem like the wisest course of action. I discussed this in a post 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 minimal cost, quickly, and securely.
In a non-blockchain framework, public records of asset ownership are maintained by a trusted central authority (usually a government agency). This brings significant challenges, including security, access barriers, inefficiencies, high owner costs, red tape, and poor cost-effectiveness in protecting relatively low-value items.
However, in a blockchain-enabled framework, decentralized and immutable ledgers can significantly reduce waste, loopholes, and opportunity loss while providing and automating important record-keeping functions more efficiently and securely than centralized systems. But that’s not all.
The value creation based on intellectual property is particularly critical in the context of the ongoing artificial intelligence revolution.
Recently, a viral trend of AI-generated images mimicking the style of Hayao Miyazaki (the legendary founder of Studio Ghibli) has brought attention to intellectual property protection. This trend has highlighted concerns about using protected intellectual property to train AI and the potential impact of easily generated imitations on legitimate intellectual property owners.
The film industry has been grappling with this issue for years:
“Major U.S. AI companies OpenAI and Google submitted a letter to the Office of Science and Technology Policy this month regarding an AI action plan, arguing that allowing AI developers to use copyrighted materials to train AI would be beneficial…
“SAG-AFTRA, the union representing about 160,000 performers, is demanding that film and television producers obtain consent from actors when creating and using digital replicas of them. They are also advocating for actors to be compensated at standard rates even when digital replicas are performing roles.”
—CBS News, March 17, 2025
These thorny issues will inevitably affect most industries. Can society successfully legislate to protect our intellectual achievements from the efficient mimicry of AI? Will AI regulation enhance industries, or merely stifle innovation and competitiveness?
There are technological solutions to some concerns regarding AI and copyright. Blockchain provides a secure and trustworthy framework for tracking, sourcing, ownership, and various other aspects of intellectual property currently challenged by generative AI.
Even more impressively, blockchain can facilitate usage tracking and royalty payments related to individual asset ownership, even for assets of very low value.
In a future world driven by AI, blockchain technology could serve as the foundation for an efficient mechanism that provides fair rewards and certification for creators whose intellectual property powers AI (a topic I briefly discussed in my TED talk).
When someone asks me how NFTs or cryptocurrencies can have real value in an intangible context, I usually counter by asking them about their favorite musician, writer, or filmmaker’s works. Most people have a basic appreciation for intellectual property in “traditional” industries, as these industries have considerable experience in managing ownership of intangible assets.
Intellectual property is considered to have real value even without physicality, and creators own their intangible creations, empowering them to create capital “out of thin air” through their intellectual achievements. This also applies to virtual objects (in fact, virtual objects often represent or are associated with intellectual property).
Whether you own an idea, something you’ve written, a digital currency, or an NFT, the key lies in ownership and its associated benefits. Owning something (whether virtual or real) grants a certain degree of opportunity that would otherwise be impossible without such ownership.
As the world embraces the digital frontier, Animoca Brands’ mission is more relevant to me than ever: to provide digital property rights for everyone, helping to ensure that all creators are fairly compensated not only for their creations but also for their relative contributions to others’ work (such as AI, social networks, advertisers, remixers, etc.).
The principles of ownership of intangible assets that helped drive the Enlightenment, the Scientific Revolution, and the Information Age can now be extended to our digital lives in the decentralized open metaverse, where the technological framework has established provable ownership of virtual assets, making the creation and access to virtual assets inherently democratic and easily accessible for all participants.
More than 315 years after the Statute of Anne began paving the way to the open metaverse, the intersection of technology and property rights is now poised to unlock unimaginable creativity, economic empowerment, and progress for billions of people.
Perspective from: Yat Siu, Executive Chairman and Co-founder of Animoca Brands
This article is for general informational purposes only and should not be construed as legal or investment advice. The views, thoughts, and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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