Photo by Fakurian Design on Unsplash

Before deciding to purchase NFT, let's take a look at how it is described on Ethereum.

Recently, NFT has become a trend, and everyone is rushing to "collect" them, but often with misconceptions. Here are some common misunderstandings:

• The essence of NFT is not a scam, but its mechanism is prone to speculation.

  • Moreover, there is no legal recourse to resolve it.

• NFT stands for non-fungible token.

  • It sounds a bit strange to translate "token" as "代幣" (tokens). I think the term "token" better represents its underlying meaning.

• NFT does not encrypt the content of your images, videos, texts, or works.

  • Therefore, NFT should not be considered as DRM (Digital Rights Management).
  • Your work data will not be stored on the blockchain (emphasizing again, only the token and URL are on the chain).

• NFT does not represent ownership or copyright of the artwork; it only proves that you own the token.

  • This token will point to a specific URL that displays the content of the artwork.
  • Simply put, it is a pointer.

• Similarly, since it's a URL, the content can be controlled by the domain owner.

  • From this perspective, NFT is not truly decentralized.

• Likewise, the displayed content can vary depending on different marketplaces.

  • Display A on OpenSea, display B elsewhere.

• Once it is on the blockchain, the record will exist forever, with no opportunity for delisting or deletion.

  • For example, if you buy an NFT and it appears normal on platform A but shows a DeepFake adult video on platform B,
  • and you are caught distributing or spreading adult content (if operating under a real-name system, the transaction itself is anonymous).

• How should the proceeds from transactions on NFTs be handled?

  • If it follows the virtual currency real-name system like in Japan, the national tax agency will fully investigate.
  • How the tax system differentiates will need to be consulted with lawyers and tax professionals.

However, most articles emphasize the value of "digital collectibles," but if you don't understand how NFTs fundamentally work, you are essentially giving money to scammers, and there is no way to regulate such things. Recently, a 30-year-old woman fell into a scam believing in the dream of getting rich through virtual currency and ended up committing suicide.