Symbols that are not susceptible to fungi seem to be an idea whose time has come. NFTs were originally designed for use with card games and can represent nearly all unique assets. Out of the context of gamers, arguably the first NFT to gain a lot of popularity was CryptoKitties, released in 2017.
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CryptoKitties became so popular that trading on CryptoKitty blocked the Ethereum network by placing records over transaction volumes. Since then, NFTs have grown in popularity and are now being developed for a range of in-game assets, digital collectibles, unique pieces of art, and more.
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The 2020 Annual Report on Non-fungicides illustrates the exponential growth of NFT transactions and shows an increase in the market value of NFTs from $ 141.5 million in 2019 to $ 338 million in 2020.
This commentary focuses on NFTs related to Creative Art. Currently, the most famous of these is Every Day: The First 5000 Days, a work created by a digital artist known as Beeple. This work was sold by Christie’s in NFT form for $ 69.3 million on March 11, 2020.
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However, NFTs are also reasonably priced for images, panels, images, songs, videos, and other creative work. As a slightly less visible recent example of the Beeple sale, renowned artist Grimes has raised nearly $ 6 million to sell 10-piece NFTs, some of which are available in thousands of copies. The sale included an NFT of 700 copies of two parts consisting of a short video and original music for $ 7,500 each, plus an NFT for the unique video and accompanying original song, which sold for approximately $ 389,000.
However, before anyone decides to attend an event and start buying or selling artwork in NFT form, it is important to have a basic understanding of what these transactions actually entail.
The information provided here is very general and this commentary is based on US federal law. Laws in other states and some states (and especially California) may more or less restrict what a buyer can get from an NFT, as well as the corresponding rights and obligations of the buyer and seller. Of course, it should be understood that this general information is not a substitute for one-to-one legal advice, which is still a good idea.
What is NFT?
First, it may be important for the parties to any NFT-related transaction to have at least a basic understanding of what they are dealing with. First, NFT is actually a cryptocurrency, but it is not the same as Bitcoin (BTC) in the sense that every BTC can be exchanged for any other BTC. “Interchangeability” means that each NFT is unique, encrypted in the underlying blockchain with specific metadata that distinguishes it from any other symbol, even if the underlying image is the same. The ownership of each NFT is still tracked on the blockchain, and the code determines how ownership is verified and whether the transfer conditions are met. However, no two types of NFT are alike.
Like other types of cryptocurrencies, NFT can be supported on a variety of blockchains including Ethereum, Flow, and Wax. However, some NFT markets are only compatible with certain blockchain chains, which can have commercial implications for the seller and any buyer, with an emphasis on the possibility of increasing value over time.
This comment focuses on NFTs based on basic artwork, so the obvious question is what the seller is actually conveying or what the buyer is actually getting with the NFT.
Sells art in traditional deals
Consider what happens when someone buys a unique piece of art, like a painting, from an artist outside of the digital context. Acquisition of a painting usually involves the transfer of ownership of a physical object. After that, the buyer can own the painting and see it, but his rights are not limited. The buyer owns the artwork, not the “intangible property” associated with that content.
While this may surprise some people, buyers cannot make copies of the painting, display it, or distribute it without the artist’s permission, either at the time of purchase or later. They cannot get it out of it; In many cases, they cannot alter or physically damage the board.