How NFT Ownership Works
In March 2021, a digital collage by an artist named Beeple was sold for US$69 million (£51 million) at Christie’s Auction House. Since then, these digital collage units, also known as NFTs, have been increasingly popular for owning and storing online media, which is traded through online ledgers called blockchains.
What Are NFTs
NFTs can be thought of as exchangeable jpegs or gifs that come in a variety of art forms like a stunning digital painting or an adorable digital panda. Unlike real treasures, an NFT owner can only display the item on a digital screen. One might think they can post it online, but this isn’t always the case. So, what does one get when they acquire an NFT, and what do they legally own?
To comprehend NFTs, one must first comprehend the term “fungible”. In Latin, fungus means to execute. Interchangeable indicates something can be traded. Money is fungible, meaning you can buy anything worth $10 with any $10 bill. However, NFTs are not fungible, or interchangeable. They are all unique.
NFT content can be developed in various ways. NFTs may represent a particular piece, like Beeple’s artwork, or a sequence of goods, like music records with special features and concert tickets. NFTs allow owners of limited works or collections to directly reach their audience. Previously, only the rightful owner of a work of art could sell it online. By law, copyright originates automatically whenever a design is created – as long as it reflects the “author’s own intellectual creation”. The creator of a piece owns the copyright and can do whatever they want with it.
How to Buy and Sell an NFT
When somebody buys an NFT from an artist, they own it. An NFT is a blockchain-traceable digital ownership certificate for a digital asset. The NFT owner has no further rights to the work. This encompasses copyright rights such as public communication (making the asset available to the entire world) and adaptation or replication, similar to buying a physical collectible. Owning an artwork does not provide you the right to exhibit it publicly. In addition, it does not grant you the right to sue someone who reproduces the painting without your consent.
NFTs and Copyright
The problem with online material is that it is easy to distribute, duplicate, and replicate. Buyers of NFTs should be aware that doing so without the owner’s consent is a copyright violation. Most NFT exchanges (secondary marketplaces where owners of NFTs can buy, sell and trade their NFTs with others) will enforce copyright and remove any NFTs that go against copyright. These rights can only be transmitted under the NFTs rules, in the format of a license. In some NFTs, the buyer was granted restricted copyright usage rights. In other circumstances, the creators have prohibited all commercial use.