If you are confused or lost about how NFTs, crypto–art, and cryptocurrency all work together, you’re not alone. NFTs can serve as authenticity certificates or represent real-life assets. To understand this better, let’s first understand what NFTs are and how they work.
What is NFT?
NFT is an acronym for non-fungible tokens, digital assets created on blockchain technology via complex coding. Essentially, the same blockchain technology is used in cryptocurrencies and is used to prove the authenticity of each NFT and reveal its owner or creator. NFTs are different from fungible tokens like Bitcoins, Ethereum, and other cryptocurrencies where digital coins do not have unique identification.
Blockchain makes it more straightforward to verify an NFT ownership. The NFT may be hidden in quirky artworks or audio or video recordings. However, blockchain technology may not store the underlying assets for larger files.
The special nature of NTFS shows that it is essential for digital asset owners and creators to limit access using intellectual property protection. However, the protection is limited since the cryptocurrency sector is unregulated. Despite NFTs being unregulated, they offer a few advantages over traditional assets.
For example, it is easier to liquidate and transfer NFTs than typical digital assets. With the latest adoption of NFT, even more, digital marketplaces have sprung up to serve the ready market and diverse user base. Although NFTs are more accessible, it doesn’t mean that they have copyright ownership like typical assets.
Copyright ownership gives the creator of the NFT exclusive rights to reproduce, distribute, and display the creative asset. Purchasing an NFT does not pass the copyrights linked with the creative work on which the digital asset is based. Also, buying an NFT does not allow you to use the digital asset for commercial purposes.
To access the privilege to use the digital copy for commercial purposes, the contract governing the NFT sale must provide an assignment of copyright. Otherwise, the copyright rights remain with the creator, who is allowed to use the digital asset for commercial purposes.
How to Protect My Work?
If you are an original creator of a digital asset, it is advisable to register your artwork with the U.S. Copyright Office. This way, you can make a copyright claim and be entitled to money for attorney fees and statutory damages in case of infringements.
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