How Do NFTs Impact Artists’ Royalties in the Digital Art Market?

It's time now for open forum. If you watched yesterday's show, you'll know that we kicked off our open forum segment with your questions about NFTS. We got so many great questions that we had to come back for a part two on this segment. You send us your questions and we find answers for you. This is all about making the industry more accessible before we get into it though. We want thank a radar Blockchain research analyst, Sarah Galis who helped us with the answers to these questions. OK. Let's take a look at the first question, Jasper Moi asked, how do NFTS impact artists rights and royalties in the digital art market? Sarah outlined a few ways like enhanced control over copyright, new revenue streams and royalties on secondary sales. As we learn yesterday, NFTS provide a Blockchain based mechanism to assert and enforce copyright ownership. So that means what an artist means in NFT, they're able to embed metadata that includes copyright information, provenance and authenticity right onto the Blockchain and it cannot be changed by anyone. NFTS also unlock new revenue streams by removing the middleman. Artists can sell their work directly to collectors and musicians can do the same directly to fans. Ultimately, the hope here is that artists will be able to garner a larger share of the proceeds. Sarah says that the global reach of NFT marketplaces also increases the potential audience for artists providing new opportunities and exposure. Secondary sales is a big piece here. Sarah told us one of the most significant impacts of NFTS is the ability for artists to earn royalties from secondary sales. They can program a percentage of future sales to be sent back to the original creator. Meaning that every time that piece of art is sold, the artist gets a percentage of that sale. The feature ensures that the artist continues to benefit financially from the appreciation of their work. And this is as we can all probably derive a big contrast from the traditional market. Let's take a look at our second question. Now, Russi chance asked, what's the process for purchasing and selling NFTS? Are there any risks associated with owning NFTS? Well, Russi, that was more than one question, but we are going to answer them for you. Let's take a look at the first part. Let's break down the process to purchase an NFT. You first need a digital wallet that supports NFT transactions. Popular wallets include metamask trust wallet or the Coinbase wallet. After you set that up, you go to the marketplace that you want to buy your NFT from like open sea or wearable. You select your NFT and then you complete your transaction. If you're an artist who wants to sell an NFT. On the other hand, you can mint your digital asset on your preferred marketplace, set your price, then you promote your NFT to attract buyers. If you want more information on the process for minting an NFT, check out the first mover episode from February 7th, we explain how to mint an NFT in more detail on that episode. Now, when it comes to risks, Sarah says that the value of NFTS can be highly volatile with prices influenced by market demand, trends and overall sentiment so similar to the industry as a whole. But unlike cryptocurrencies, NFTS are unique and finding a buyer for your specific NFT at your asking price could be challenging and could potentially lead to liquidity issues. There are also risks of buying counterfeit nfts or those that infringe on copyright especially from less regulated platforms. Now let's talk about the risk of losing your NFT. Uh There are some things that could lead to that happening like contract vulnerabilities, platform, security, breaches and wallet security. Our last NFT question today, what happens if someone copies an NFT and tries to sell it as an original. Sarah says that while the digital nature of NFTS might make them seem like they're vulnerable to copying. The underlying Blockchain technology provides robust mechanisms for verifying authenticity and protecting creators rights. So how does this work? Each NFT is associated with a unique identifier and metadata that are recorded on the Blockchain. This includes the history of ownership and the creators details. These cannot be altered. This makes it difficult for counterfeits to pass for the original. So although the image of the file might look similar, the data will be different. Reputable NFT marketplaces have policies and verification processes in place to prevent the sale of counterfeit assets. This often requires proof of authenticity and a verification of the creator's identity. I hope that answered your questions. If you're out there on social media and you still have more questions about NFT, send them to me and we'll make sure to get them to a future segment of open forum. Like I said, we got so many NFT questions we'll cover the ones we didn't cover in today's episode or yesterday's episode soon. So keep tuning into open forum to find those answers. And if you have questions for us on any topic to do with crypto, please send them to me on X. There are no dumb questions here. Our mission is to find answers for you so that we can make this industry more accessible. And lastly a big thank you to D our Blockchain research analyst Sarah Galis who helped us with the answers on today's open forum.