In my previous article, entitled Do you own copyright when buying an NFT?, I explained how an NFT buyer receives the rights contained in the smart contract attached to the NFT. They have no rights to the original scent work.
However, rights are only as good as the laws and systems that protect them.
As we shall see, there is still a lot of work to be done in this area in the NFT space, meaning buyers and creators need to be aware of the risks.
Current Problems with NFT transactions
The largest NFT trading platform is OpenSea, which offers a wide range of work and, of course, relatively high fees. On the platform, artists can sell NFTs and buyers to buy them, with ownership of the NFTs transferring with the transfer of fees. Although NFTs cannot be sent back and forth like tokens, they can be listed on the trading platform and sold either at a fixed price, as a package, or at auction.
In many ways, NFT transactions are the same as e-commerce transactions, and similar issues arise on both.
The current NFT trading platforms are mostly decentralized exchanges, on which transactions are anonymous and subject to the rules of the exchange of the platform. Since the value of NFTs is art products closely linked to virtual products, a person trying to launder money can easily inflate their value. At present, there are no anti-money laundering measures for minters and sellers of NFTs.
- Counterfeiting and piracy
In March 2021, the artist Weird Undead posted a painting that was stolen to create and sell an NFT. This incident sent a message to the public that not all NFT…