TECHNEMBER or technology news and law

23. 11. 2021

Authors: Robert Nešpůrek, Pavel Amler, Tomáš Chmelka

Art in the crypt? What does NFT stand for?

Let’s start with one of the most interesting and still relatively unexplored phenomena of the crypto world known as nonfungible tokens (NFTs).

The fundamental difference between NFTs and other popular crypto assets, typically fungible crypto assets (cryptocurrencies – Bitcoin, Ethereum), is their uniqueness and originality.

An NFT can be broadly defined as a record or certificate written on a blockchain[1] that represents or is directly linked to an object from the real or digital world (paintings, game objects, tweets or collages, etc.). This record consists of metadata that certifies the existence of certain rights of the subject to the object (mostly the existence of property rights). However, the use of NFTs does not end with this creative approach to the art trade. It turned out that NFTs can serve as the basis for entire computer games.[2]

The size of the NFT gaming market is estimated to amount to approximately 12 billion US dollars and the exponential growth of the past few years is expected to continue into the future. The use of blockchain and NFTs in computer gaming thus has the highest potential to skyrocket.

Although at first glance, the main character in blockchain may seem to be the private sphere, the opposite is true; public authorities, which are very well aware of its benefits, tend to use this technology also.

The digital euro project: What is it? When will it be available?

The introduction of central bank digital currencies (“CBDCs”), which create a direct receivable from the central bank that directly guarantees the type of currency, is increasingly mentioned in connection with the use of blockchain by state authorities. One of these types of currency is envisaged to be introduced by the European Union in its digital euro project establishing a direct receivable from the European Central Bank (the “ECB”).

The digital euro project is primarily a response to the receding trend of using cash in some countries and the ECB sees it as an adequate alternative to cash. In cryptocurrency terminology, the digital euro is a stablecoin, the value of which is linked to a specific fiat currency (hence its value is to some extent predictable). Its introduction could thus enhance financial inclusion, among other things, especially because it is relatively easily accessible and secure.

However, the digital euro project is still in its early stage of preparation, which the ECB launched relatively recently (the official launch took place on 14 July 2021). The final part of the project is expected to consist of several stages, in each of which the ECB will focus on individual parts of the project in greater detail (technical part, legal part and development part).

In the best-case scenario, the digital euro could come to light in 2026, but even so, this is still only a preliminary estimate and we must take into account unexpected problems or variations that may arise during its development and could delay its final launch. From a global perspective, around 80 countries, representing more than 90% of the world’s GDP, are currently considering the possibility of issuing their own CBDC. [3]

A European blockchain? eGovernment on the blockchain

Not only the ECB, but also the European Commission is venturing into the world of blockchain technology. Together with members of the European Blockchain Service[4], it launched a European blockchain project in 2018 called the European Blockchain Services Infrastructure (the “EBSI”) with the aim of creating a single distributed database for the EU eGovernment.

The EBSI currently has four main options of use. These are the introduction of a European Digital Identity, the digitisation of notarisations, trusted data sharing among state authorities in the EU and the possibility of making it easier to obtain education credentials (diplomas). For each use, a working group has been set up to develop a European blockchain application prototype. Work is currently underway to introduce three more modes of use – financing SMEs, facilitating access to social services and processing asylum applications.

Blockchain is therefore undoubtedly one of the biggest technological agents in the past few years. Thanks to its broad application options, it has the potential to influence the current (not only technological) status quo in society. Although this technology certainly has its own pitfalls and limits, it will undoubtedly be very interesting to see what new forms of application blockchain will bring us in the future in real life and what new trends this technology will come up with in the future.

The first protective measure of the NÚKIB: secured e-mail boxes

In early October 2021, the National Cyber and Information Security Agency (the NÚKIB) issued its first ever protective measure under the Cyber Security Act[5], which imposes an obligation on operators of information systems crucial for the functioning of the state and the safety of its inhabitants (especially ministries, key authorities and regions, including the capital city of Prague, as well as some private sector entities) to secure their e-mail boxes.

The aim of this measure is primarily to secure, in a uniform manner, the communication between public authorities, internally within these public authorities, and, where appropriate, between public authorities and other obligated persons within the private sector. The purpose is to reduce the risk of cyber-attacks, in particular man-in-the-middle attacks, where the infringer is in the middle of the communication between the sender and the recipient of the mail and can read it or change its content on the way.

In addition to this measure, the NÚKIB has also issued a detailed methodology as a guide on how to put in place e-mail communication protection.

Although this measure is not binding for all information system operators, we recommend that you at least get acquainted with it and, if necessary, adopt similar measures in your company to enhance security.

Unfair competition and safe havens in clouds? The Supreme Court has intervened!

In September earlier this year, the Supreme Court issued a landmark decision under case No. 23 Cdo 2793/2020 on unfair competition for cloud storage sites in the safe haven regime – a regime where the operators of such sites have limited liability for content uploaded by users to their websites.

The subject of this dispute was the conduct of several cloud sites in providing financial remuneration to users who actively upload files with copyrighted content to their sites. A greater number of downloads of such files clearly led to an increase in the remuneration to such users.

The Supreme Court found this conduct to be unfair competition and held that liability for such conduct was not limited by the safe haven rules.

Thus, if a cloud storage pays users a remuneration that depends on the number or extent of downloads of data files stored by other users without adequately verifying whether the remuneration is not paid in connection with endangering or infringement of intellectual property rights, the cloud is very likely engaging in unfair competition.

If you are an operator of certain storage sites, we recommend that you check whether you meet all the conditions of a safe haven and whether you are not, for example, engaging in similar unfair competition.


[1] Blockchain is a type of distributed ledger technology, the main essence of which is defined in the name itself. A chain of interconnected and interdependent blocks forms a database that is not covered and coordinated by any superior entity and instead is functioning based on the consensus of all its users.

[2] One of the most popular games is Axie Inifinity, where users can buy, sell and bet on various digital pets called Axies.

[3] For a graphical comparison of the CBDC status in different parts of the world, go to https://www.atlanticcouncil.org/cbdctracker/

[4] Members are the EU Member States, Norway and Liechtenstein.

[5] Act No. 181/2014 Sb., on Cyber Security and on Amendments to Related Acts (the Cyber Security Act), as amended.

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