Celebrities such as Jimmy Fallon, Steph Curry, and Justin Bieber have all jumped on the NFT train, which appears to be growing substantially by the day.
Whenever anything rises as swiftly and dramatically as NFTs have this year, difficulties will undoubtedly arise.
NFTs will undoubtedly encounter some obstacles that have any long-term potential. Despite their current popularity, these obstacles will threaten to entirely derail them as a sustainable and effective way of transferring essential data, artwork, video, and music, among other things.
Property Rights for NFTs
One of the most critical issues confronting the NFT sector is possession.
These are digital assets that may store anything from music to artwork. The primary essential feature of NFTs is that they have distinct, traceable identities. It is due to the blockchain technology on which they are based.
Notwithstanding their distinct identities. They continue to face issues related to the intellectual property and copyright regulations they are under.
In a recent example regarding a decentralized autonomous organization (DAO). Spice DAO paid US$3 million for an unreleased screenplay for the film ‘Dune,’ modeled off the novel authored by Alejandro Jodorowsky.
Spice DAO concluded that owning the NFT allowed them the intellectual property rights to the Dune plot and characters. As a result, they produced an animated show inspired by the science-fiction cult masterpiece.
The copyright laws did not move to Spice DAO with the text. Instead, the story and characters remain Jokorowsky’s intellectual property for the duration of his existence plus an extra 70 years after his death, except if he sells them first.
Spice DAO was driven to abandon the development of the animated series due to their unfortunate miscalculation. This serves as an eye-opening warning to individuals who are unaware that just because it can be purchased as an NFT does not automatically signify ownership.
Fraudulent Activities & Theft
Risks to cybersecurity, such as fraudulent activity and copyright theft, have grown in tandem with the use of NFTs. The fake ones have been listed for sale on NFT marketplaces on various occasions.
In addition to the copyright theft already mentioned above, there have been reports of fake airdrops and NFT copying. Because the overall value of an NFT is in its originality, there should only be one version of this item. Just as there is only one version of any other art creation.
NFTs Price Evaluation Challenges
As the market evolves, one of the most challenging tasks it will confront is determining how to evaluate an NFT properly. Values of these crypto-assets change drastically. This is because there are no conventional procedures for appraising NFTs.
This is evident from the fact that certain NFTs sell for millions of dollars. Also, some for considerably more, such as the renowned Beeple piece. It was sold for US$69 million last year. On the other hand, plenty of others sell for a lower price.
Verdict
The NFT market is still in its early stages. There are challenges to smooth out with any innovation, especially one of such scale and appeal as NFTs. Ideally, these three significant difficulties will be handled as the industry progresses.
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