everything about nfts

This is the second part of the article. You can read the first part here.

Many find the world of cryptocurrencies, crypto-art, and NFTs to be mysterious. For instance, NFTs can serve as a certificate of authenticity. And even if this proves legal ownership, what is the effect on intellectual property rights? 

As far as copyrights are concerned, NFTs are in a legal gray area. In the digital era, attaching art to the blockchain as NFTs may seem like a secure, verifiable way to sell NFT art online. It is true in some ways because blockchain inherently records time-stamped data on all transactions, with a permanent record of ownership.

However, the reality of crypto asset ownership is much more complicated than one might think. As a new crypto-asset class, NFTs appear almost unconstrained by existing regulatory frameworks. But when combined with art, there are overlaps to consider.

Who Owns the Copyright on NFTS?

There is rising interest in NFTs from a copyright perspective, partly because people are trading many artworks, works that are under copyright protection, as NFTs. There is also the uncertainty of what you get when you buy an NFT.

One of the central problems is the prevalent misconception of the rights that buyers gain when they buy an NFT. Some buyers believe they are purchasing the underlying work of art together with all of its rights.

But in reality, buyers of an NFT are only purchasing the metadata related to the item and not the actual work itself.

The World Intellectual Property Organization (WIPO) defines copyright as :

“Copyright (or author’s right) is a legal term used to describe the rights that creators have over their literary and artistic works. Works covered by copyright range from books, music, paintings, sculpture, and films, to computer programs, databases, advertisements, maps, and technical drawings.”

So, an artist retains the copyright to artwork created and auctioned on an NFT marketplace, just as an auction held in person. Unfortunately, current platforms cannot exchange NFT copyrights due to a lack of international law-compliant infrastructure.

As long as there is no external agreement between the artist and the buyer, the bundle of copyrights to the NFT remains the original artist’s property.

The only thing typical NFT buyers own is a unique hash on the blockchain with a transactional record and a hyperlink to the artwork file.

Who Invented NFTs?

NFTs can be traced back to 2012 when Meni Rosenfield published a paper in which Rosenfield referred to the NFT technology as “Colored Coins.”

Originally, colored coins were intended to be minted on the Bitcoin blockchain. They were then pitched as a category of methods for representing and managing real-world assets on Bitcoin. The project, however, was overshadowed by smart contracts and other cutting-edge NFT concepts that later emerged. On May 3, 2014, digital artists Kevin McCoy and Anil Dash created the first known NFT, Quantum.

Which NFT Market is Best Now?

OpenSea is undoubtedly the best NFT marketplace right now. Founded in 2017, OpenSea is an NFT marketplace built as a platform for listing and selling non-fungible tokens (NFTs). It was initially made to support CryptoKitties but has since expanded to become the largest NFT marketplace. Many venture capitalists, including household names Mark Cuban, Tim Ferriss, Kevin Durant, and Ashton Kutcher, have backed OpenSea.

OpenSea is free to use. For every sale made on the marketplace, the site does, however, impose a 2.5% fee. There aren’t any yearly or monthly payments, though. OpenSea isn’t just a solid NFT marketplace; it also offers a user-friendly interface sure to please novice and experienced traders alike. It also boasts an impressive list of features:

  • NFT creation
  • Buy and sell NFTs
  • Minting NFTs
  • NFT auction
  • Sell NFT bundles
  • Multiple crypto wallet options
  • Referral rewards
  • Royalties
  • NFTs as gifts
  • Rankings page
  • Rarity traits
  • Liking NFTs

Also, OpenSea has NFTs of multiple categories like art, collectibles, domain names, music, photography, sports, trading cards, utility, and virtual worlds.

The ability to create NFTs while also being able to trade and invest in them is one of the advantages of OpenSea. You can even buy, sell, and trade on the go, thanks to OpeanSea’s mobile app.

Perhaps the biggest problem on OpenSea is the prevalence of spam and pirated content. Over 80% of the things made with the use of OpenSea’s free minting tool were reported to be spam, false collections, or plagiarized works, according to their January 2022 report.

OpenSea is a victim of its own success since scammers have emerged there due to its popularity. Regardless, compared to marketplaces with more curated collections, you need to be extra cautious about what you purchase on OpenSea.

Which NFT Marketplace is Best for Beginners?

OpenSea is ideal for beginners since the platform is designed for people who aren’t familiar with NFTs; you can create NFTs without any technical expertise or even familiarity with blockchain technology. All you need to do is to beware of scams.

You can get authentic NFTs by following a few tips:

  • Make sure the collection is verified or under “verified collections.”
  • Check the social handles of the artists.
  • Use an NFT verification service if in doubt.
  • Read the contract terms to see if the NFT is for public display or personal use only.

OpenSea also has an educational blog with articles on how to buy NFTs and sell them, keeping yourself safe from scams, and other essential topics.

You can also use the free minting tool of OpenSea to make NFTs for free, without the need for a single line of code.

Which NFT Wallet is Best?

Before you can collect and invest in NFTs you’ll need an NFT wallet. An NFT wallet is a piece of software that supports the blockchain protocol of NFTs and the crypto needed for buying the NFT.  There are two types of NFT wallets- NFT hot wallet and NFT cold wallet.

A hot wallet is faster and makes it simpler to trade or use NFTs. It is connected to the internet and may be vulnerable to cyberattacks. While a cold wallet may be more secure, it is often not online, making it less practical. You will also need to invest in the hardware. On the other hand, hot wallets are software-based and mostly free.

MetaMask is by far the most popular NFT hot wallet. It is trusted by over 21 million users worldwide. Metamask comes as a browser extension that supports multiple popular browsers. There is also a mobile version of MetaMask on android and ios. Decentralized apps, or dApps, and NFT markets may both be accessed using the mobile application’s built-in browser.

MetaMask also lets you create multiple wallet addresses, enabling you to store NFTs at a different address from your coin.

Conclusion

The nature of the NFT market and the potential for massive gains mean that there are likely to be a fair number of disputes over copyright in the NFT space. International copyright compliance is critical to shifting this emerging ecosystem from speculation to global functionality.

We are in the early days of potentially disruptive technology, so it will be interesting to see how disputes and ownership claims unfold.

Read the third part here.

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