Shirley Palumbo, Esq. LL.M
Blockchain technology has been asserted to store information in a way that is secured, but not necessarily secret. Seemingly, one of the main purposes of a blockchain usage is to avoid the information being edited or corrupted. Thus, words like transparency, provenance and integrity are known characteristics of the blockchain. While the encryption verifies sediments and accurately reflects the past information, it does not necessarily translate to the information being protected as a “secret”.
Indeed, the encryption is public, and while cryptocurrency, like bitcoin, trades in the blockchain most times with no identifiers linking it to a particular individual, standard digital analytics and forensics can provide the identity of the owner of a wallet, in addition to ownership of any other wallet he may own. (Sibenik, P, 2019). Likewise, the unique features of an NFT token in the blockchain makes ownership and provenance known, such that authenticated information of ownership by the debtor, a transfer or a trade of the NFT may be more easily identifiable, and thus, not a secret. There is no secret kept where a blockchain ledger records all transactions and has all the information concerning provenance, ownership and price. (Deforge, A., 2014). The blockchain will authenticate and protect provenance, and the original owner cannot later enlarge the information as a matter of public record on the blockchain. (Bailey, J. 2017).
Secrecy may be found through a secret key or a smart contract embedded in the crypted token or though applications introduced by the developer that limits the blockchain data to a group. (Benhamouda, et. Al 2020). The private key is the owner’s secret and proves ownership and authorizes transfers. The owner must keep the private key information surreptitiously, in secretive manner, until the transfer of the data is complete in order to avoid the secret being spilled.
As control of the NFT might not be exclusive to the secret key, ensuring ownership over competing possessors will depend on the terms encrypted into the smart contract that is embedded in the NFT, as interpreted by the legal system where ownership is being contested. Giving away control of your NFT is giving away your secret. Hence, the owner and future owners or trustees should change the password to keep the secret. Changing the secret key password and encrypting is possible. In fact, staying in control of the NFT and changing the password is what the owner of the NFT in a blockchain can immediately do to safeguard the secret.
SURVEY – Are your clients planning on adding crypto as a business opportunity within the next 2 years?
Benhamouda, F., Gentry, C., et. Al (2020) Can a Public Blockchain Keep a Secret? ACM Digital Library https://dl.acm.org/doi/abs/10.1007/978-3-030-64375-1_10 [dl.acm.org]
Bailey, J. Artnome, The Blockchain Art Market Is Here, December 27, 2017
Deforge, A. Rich. J.L. & Tech. 13, September, 2014, note 20.
MyCrypto.com at https://support.mycrypto.com/how-to/migrating/how-to-change-your-wallet-password-unencrypted-to-encrypted [support.mycrypto.com]
Sibenik, P. ( 2019) How Anonymous Are Cryptocurrencies? – Cryptforensic Investigators [cryptforensic.com] (January 8, 2019)