NFT is a short form for non-fungible tokens. It is a certificate for proof of ownership of a digital or real asset that has unique characteristics. Its non-fungibility nature makes it indivisible and unchangeable unlike money or other cryptocurrencies that can be interchanged for another.
Tokens on the blockchain can be classified as either fungible or non-fungible assets.
For instance, you can break dollars into cents and bitcoin into particles known as satoshis. But you can’t break or sell part of Nfts without spoiling the whole. It is like selling part of a sculpture or painting.
Fungible tokens are interchangeable; they are identical and can be replaced by another identical token. These tokens can represent anything from cryptocurrencies such as Bitcoin and video game currency to tokenized versions of real-world goods like crude oil or gold.
Non-fungible tokens (NFTs) are one-of-a-kind and so cannot be exchanged.
These collectibles are minted as NFTs through a Cryptography technology known as a Blockchain network. This is where vital information about the NFT is stored indefinitely and can be viewed by the public to ensure ownership transparency.
Non-fungible assets are unique and cannot be immediately interchanged, such as a piece of digital art you made, a car ownership certificate, or a game character.
The NFT development has changed the game for digital artists and content creators. NFT offers a platform for them to safeguard the ownership of their works and monetize them. In addition, creators also get royalties on their works each time the NFT is transferred to a different owner, so as a creator of an NFT you can still earn from your creation even after you have sold it.
NFTs are the hot cakes of the digital world, so it’s only natural they come with some legal and originality challenges. While NFTs are considered to be a certificate of authenticity, in reality, creators don’t necessarily have to possess the copyright of virtual collectibles before minting them on the blockchain.
The implication of this is that when you buy artworks from fake digital creators, you may be liable for copyright infringement by the rightful owner of the copyright. In some cases, the collectible may not even be hosted on the blockchain, but a conventional and unsafe hosting solution somewhere on the internet.
The issue with neither the sellers nor the buyers owning the copyright of some NFTs is that it creates room for scammers to abuse the space. Many scammers end up profiting more than the true artists since the market is decentralized and there is no law prohibiting them from doing so. Therefore, before buying any NFT do your due diligence, research the authenticity of the artwork and verify whether the person selling it has the authority to do so.
This is a significant issue that Autentica Technology can resolve.