What Is an NFT and What Is It Good For?
An NFT is a non-fungible token. While 1 BTC or ETH is equal to any other unit of the same cryptocurrency or can be split into smaller units, each NFT is completely unique – it represents only itself and cannot be automatically exchanged. At the same time, an NFT can have a price determined by the market, but we will come back to that later.
An NFT is a digital certificate confirming the ownership of a particular digital asset. The token itself does not contain an artwork but only a link to it and a smart contract that defines the owner’s rights and ability to manage the asset. Information about all owners can be found on the blockchain network. NFTs were originally conceived as a technical means for authors to control their own works in the digital sphere, where piracy or intellectual property theft is a problem, but in practice, things turned out differently.
NFTs and Copyright
An NFT owner’s rights are specified in the smart contract and are usually limited to buying, owning, and selling. Thus, by purchasing an NFT, an investor does not become the owner of the exclusive rights to the object digitized in that way. Moreover, all such relationships are distributed and regulated only within a particular blockchain network.
Everything You Need to Know About NFTs
According to the United States copyright law, “the creator of the original expression in a work is its author.” Therefore, it implies exclusive copyrights, the alienation of which requires a legal agreement between an author and a third party. Technically, the NFT terms may involve the transfer of such rights, but this agreement would be valid only within the blockchain network in which the token was created. Thus, the author of the original artwork reserves the right to make and sell copies, transfer rights by inheritance, receive royalties, etc. So far, there have been no legal precedents for the owner of an NFT to challenge the exclusive copyright of the original work’s creator.