A. Introduction

NFT means Non-Fungible Token. NFT is based on blockchain technology which enables digital assets, such as pictures, videos, and music, to have their own separate and unique identification codes. Such identification codes will be placed on the block permanently in a decentralized network, then they cannot be changed or manipulated. The NFT’s non-fungible and irreplaceable characteristics enables people to prove its originality, authenticity, and uniqueness of the NFT. Also, it provides information about the identification of the owner and purchase history of the NFT. For above reasons, the NFTs should be protected as an ownership right.

Recently, public interest in NFT and the market size have been rapidly increasing. For instance, digital artist Beeple’s NFT “The First 5000 Days” was sold for $69.3 million at Christie’s in 2021. Moreover, according to the decentralized app market data analysis platform Dapp Rader and Mirae Asset Securities Research Center in Korea, the size of the NFT market in 2021 was $1.23 billion in the first quarter, $1.24 billion in the second quarter, and reached $10.7 billion in the third quarter, an increase of about eight times from the previous quarter.

The NFT utilizes ERC-721, a standard interface that is issued and traded on the Ethereum blockchain. There are various ways to create an NFT, but it is usually issued through the Marketplace where it is purchased and sold. To create an NFT, there should be a digital file, coin, and coin wallet. The process of making a certain digital file into NFT is called Minting, and it consumes Gas which is paid in coins. In this process, you can make a detailed setup on the NFT, including the name of the NFT, description, image link (link to the digital file to be sold), resale royalty rate (e.g., 10% of the resale amount), number of copies (how many NFTs will be issued), etc. Such process may vary from each Marketplace. Some Marketplace may require indicating the name of the author and the issuance date or choose whether to transfer the copyright of the NFT.

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