NFT: A cross-section of digital art, blockchain, and law
In simple terms, a non-fungible token (NFT) could be understood as a one-off kind, non-divisible representation of any digital art form.
Since the NFT cannot be exchanged with any other NFT, it becomes non-fungible, giving it a unique feature and high value.
An NFT consists of two major components, which every buyer must understand before they put in their money to buy one for themselves.
NFT’s are digital assets that provide a database on a distributed ledger giving details about the actual asset (the digital artwork, collectible, music, or video asset) through the metadata.
The asset is generally stored on other forms of decentralised and distributed file storage systems (DFSS) provided by various service providers.
The purchase of NFT gives authentication to the purchaser that they are the owner of the NFT; in simpler terms, it’s a certificate of ownership of the NFT and not the rights associated with the same.
The buyer of NFT receives a copy of the copyrighted work and the NFT, which is a digital authentication of ownership of the NFT and not the underlying asset owned by the original creator.