Questions related to investing in NFT and crypto artwork

If I am going to sell you a real painting by Leonardo da Vinci, but I actually give you a forgery, and you transfer ETH to me, and you receive a forgery, how can this situation be resolved?

I wrote an article yesterday about NFT and artwork, this is only the first in a series of articles on NFT, in fact, NFT contains a very wide range of segments, I believe that ordinary users in the near future will have the opportunity to contact NFT in the virtual world, so I will write a series of articles on other segments of NFT.
The artwork introduced in yesterday’s article is not very relevant to the general public investors, and the general investors do not have much exposure, so after the article was published, a number of readers asked some questions. Some of these questions were asked directly about art, but the issues involved themselves are actually relevant to all NFT segments, so I’ll respond to a few of them today. If we understand these questions clearly, it will help us understand the other segments to be shared later.

  1. All have to be traded with ETH, ETH is the hard currency, can we understand it that way?

The NFT field is also related to blockchain, Ether has Ether’s NFT ecology, BSC is now also starting to do its own NFT ecology, I believe that other public chains will take advantage of the future to foster their own NFT ecology. But at present, the most powerful and perfect NFT ecology is undoubtedly Ether, which is the same as DeFi. All the NFT areas I shared yesterday and in the future are all areas of the Ethernet ecosystem. Due to the limited time and energy, and my bullishness on Ether, my focus is all on Ether.

At present, in all NFT areas of Ether, almost 95% of NFT transactions are traded with ETH, which is different from DeFi. In DeFi, stablecoin is used in a very wide range, but in the NFT area, stablecoin is used in very few occasions. So in the NFT ecology of Ether, ETH is the hard currency.

  1. If I am going to sell you a real painting of Leonardo da Vinci, but in fact I give you a forgery, and you transfer ETH to me, and you receive a forgery, how to solve this situation?

This problem is actually quite involved. Let’s explain it little by little. First of all, at present, if the artwork to be auctioned is a physical one, such as paper drawings, paintings, etc., it almost still has to go through the traditional auction houses.

That is, the seller hands over the physical object to the auction house, which then authenticates it and then auctions it off. This is not very different from traditional art auctions. But in fact this type of auction is not the kind of artwork we often talk about in the NFT field. The artwork we often talk about in the NFT field is digital artwork, that is, it exists not in physical but in digital form, such as image files, 3D files and multimedia animation files, and so on. Let’s take the simplest example of a digital artwork in the form of a picture.

Say an artist creates a cool image on his computer and then wants to make it into a copyrighted NFT artwork that he can resell. What he would do is to issue an NFT token, which is unique and corresponds to the image.

Well, this time he can contact some famous NFT art auction sites, such as cryptoart that I mentioned yesterday, and tell the site that my image corresponds to a certain NFT token on Ether. Since all the information on Ether is public. Then the website goes to the ethereum browser and takes a look, and it really finds this NFT token, so the website does a process in the background to put this NFT token deployed on ethereum corresponding to this image file.

Now, this auction site can auction this NFT artwork, display this NFT image on the site, and bid the price (let’s assume 10 ETH) and start selling. If a buyer likes the artwork, he can directly place an order online, and after the buyer pays 10 ETH, the NFT tokens corresponding to the artwork will be transferred to the buyer’s wallet. And the picture of the artwork?

Usually the buyer does not care, of course, the buyer can also download the original high-definition file of this image through the website, but more often than not, the buyer does not care. So what the buyer actually buys is not the image, but the NFT token.

So the question is, how to prove that the buyer owns the work?

The first proof is the auction site. Since the website stores the relationship between the NFT token and the image, it also stores the image. So when the buyer comes to the website again and logs in with his Ether wallet, the backend program of the website will automatically search in his Ether wallet, and once it finds that NFT token, it will automatically display the image corresponding to that NFT token on the browser. So only the person who owns this NFT token can display this NFT artwork on this website.

Usually this type of NFT artist will work with many of these sites and tell all of them about the relationship between his NFT token and the image and give them the image of the work. So this buyer can show on many of these sites that he bought this NFT artwork. This brings up another question: So, there will be pictures of this NFT artwork in many places, so can’t many people claim to own this NFT artwork and even display this artwork with impunity? This is where the NFT comes into play, because whoever has the NFT in their hands is the true owner of the work.

So in this case, once the buyer finds out that anyone else is using the NFT artwork without authorization, he can sue others through legal channels. The biggest and most direct evidence in the buyer’s hand is publicly available on Ether, accessible to everyone, and only this buyer has this NFT in his wallet, so only this buyer is the real owner.

This is something that is difficult to do with traditional art copyrights or even if you want to do it, it requires a lot of cost and resources. Understanding this process, the other segments we share later will be well understood.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/questions-related-to-investing-in-nft-and-crypto-artwork/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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