An NFT is a piece of metadata which describes the digital asset and provides other information which make the NFT unique, which includes the identity of the copyright owner. This information in not alterable and it is permanently stored in the blockchain. The nature of blockchain means that the information cannot be tampered with.
To be able to compromise an NFT, organised hackers would need to attack the entire highly encrypted blockchain framework that surrounds it. This is unlikely to occur as it would require the hackers to control most of the nodes, which could be thousands in public blockchains. Alternatively, hackers could target the digital wallet of the NFT owner. To access the digital wallet, they would need the pair of cryptographic keys. One is public as it acts as a digital address. The other key is private and only the NFT owner knows it. In theory, hackers could attack the owner’s computer where the password may be saved. However, NFT owners are often aware of this danger and therefore make sure their cryptographic key is stored safely.
NFT’s used in the blockchain video game application, CryptoKitties, have allowed users to create collectables whereby they are the copyright owners of the original works and the NFT owners. This provides the creator with control over the digital asset and the right to sell or transfer the digital asset. With conventional video games users are often restricted by licensing agreements.
Copyright owners of digital works, which an NFT represents, retain the copyright over the work even when the NFT changes hands. A transfer of an NFT would not give its new owner any of the rights which are exclusive to the copyright owner, unless stated in the smart contract which facilitated the transfer. Often a new NFT owner is granted limited rights in relation to the use of the digital works which are pre-decided by the copyright owner. As such, NFT’s allow copyright owners to control the use of their work even over an NFT resale.
Of course, the digital works could be mass copied decreasing it value, but the scarce NFT proves ownership of the original digital works so would not be affected by the mass copying.
Consequently, NFT’s can allow copyright owners to retain much more control over their works.
If you have any further questions about NFT’s, please get in touch with the team today.