NFTs Through a Hohfeldian Lens

A Simplistic Summary

Photo by Shubham Dhage on Unsplash

In a 1913 essay “Some Fundamental Legal Conceptions as Applied in Judicial Reasoning”, Wesley Newcomb Hohfeld outlined what seems very much like a Promise Theoretic approach to judicial reasoning regarding interest in property. 

Hohfeld distinguishes the jural concepts of Right, Duty, Privilege, No-Right, Power, Liability, Disability, and Immunity.

As depicted, there exist promise-like relationships between these concepts. Hohfeld highlights jural correlatives: Right and Duty, No-Right and Privilege, Power and Liability, Disability and Immunity. Hohfeld also highlights jural opposites: Right and No-Right, Duty and Privilege, Power and Disability, and Liability and Immunity.

If A has a Right against B to exclude B from using A’s property, then B has a Duty to not use A’s property. This is an example of what is usually meant by property. Through the Promise Theory lens, A promising the exclusion of B (Right) works only if B promises to be excluded (Duty).  Additionally, A may also wield the Power to change or create a legal relationship regarding the property. A’s Power is correlated with B’s Liability to the changes created by A. Through the Promise Theory lens, A promising transfer of ownership (Power) only works if B promises to recognize the transfer (Liability).

NFTs seem to claim Right and Power without having the corresponding Duties and Liabilities in place. The NFT industry certainly wishes that the Duties and Liabilities were in place. But, that is not the case today. An NFT is advertised as property, and an NFT purchaser feels like they are buying the Right to exclude others from their property. The problem arises that everyone else has no Duty to be excluded. In the Promise Theory sense, an NFT purchaser promises the exclusion of others (Right), but everyone else does not promise to be excluded (Duty). Additionally, an NFT purchaser believes they assume Power to create legal relationships regarding their purchase. However, everyone else does not have the Liability to be subject to those legal relationships. In the Promise Theory sense, an NFT purchaser promises transfer of ownership (Power), but everyone else does not promise to recognize the transfer (Liability).

I’ll end by highlighting that it seems to me the NFT situation is much worse for NFTs. Not only does everyone not have the Duty and Liability regarding NFTs Right and Power, it also seems to me that everyone has Privilege and Immunity from that Right and Power via all the property mechanisms preceding NFTs.

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