NFT Art Auction Mechanics Quiz

1. What is the primary function of a digital wallet in NFT art auctions?

• A digital wallet is used to track commissions earned from art sales.
• A digital wallet is primarily for managing social media accounts.
• A digital wallet stores physical art pieces during NFT auctions.
• A digital wallet is used to store and manage cryptocurrency funds for NFT purchases.

2. How do buyers connect to an NFT art platform?

• Buyers visit the physical gallery for NFT art.
• Buyers use email to register for the NFT art platform.
• Buyers call customer service to access the NFT art platform.
• Buyers connect their digital wallet to the NFT art platform.

3. What are the steps to sell an NFT artwork on an online marketplace?

• Create an account, choose payment options, list your artwork on social media, and finalize the sale.
• Find a local gallery, print your artwork, contact potential buyers, and negotiate prices.
• Develop your artwork, hire a marketing team, participate in online forums, and wait for buyers.
• Set up a digital wallet, connect it to the NFT art platform, upload the artwork, and set auction parameters.

4. What is a reserve auction in NFT art auctions?

• A reserve auction allows buyers to set their own minimum price.
• A reserve auction is where interested buyers can only make bids equal to or higher than the reserve price set by the seller.
• A reserve auction has no limit on how low a bid can be placed.
• A reserve auction automatically sells the NFT to the first bidder.

5. What is a scheduled auction in NFT art auctions?

• A scheduled auction is an auction that allows bidding only on weekends.
• A scheduled auction is a type of auction with no time limit for bids.
• A scheduled auction is a random auction that can start at any time.
• A scheduled auction is a timed auction with specific start and end times.

6. What is an unlimited auction in NFT art auctions?

• An unlimited auction allows buyers to bid until the seller accepts one.
• An unlimited auction is limited to a specific number of bids only.
• An unlimited auction has a fixed starting price with no end time.
• An unlimited auction requires buyers to place bids at fixed intervals.

7. How do NFT art auctions determine the winner?

• All bidders receive the NFT if they meet the starting price.
• The highest bidder wins the NFT at the end of the auction period.
• The seller randomly selects the winner after the auction ends.
• The winner is determined by a public vote among participants.

8. What happens to the funds if another buyer makes a higher bid before the countdown ends?

• The funds are transferred back to the buyer`s wallet.
• The funds are transferred to the seller immediately.
• The funds are donated to a charity.
• The funds are frozen until the auction ends.

9. How do buyers place higher bids during an ongoing auction?

• Buyers can only place higher bids at the auction`s conclusion.
• Buyers can click “Bid again” to place a higher bid than the current one.
• Buyers need to contact the auction house directly to raise their bids.
• Buyers must submit a paper form to increase their bid.

10. What happens if a buyer does not make a bid before the countdown ends?

• The NFT is returned to the seller for a re-auction.
• The NFT is sold to the highest bidder, and the buyer`s ETH remains in their wallet.
• The buyer is automatically disqualified from future auctions.
• The auction automatically extends for another round.

11. How do buyers settle their NFT after winning an auction?

• Buyers settle their NFT by waiting for the platform to automatically process it later.
• Buyers settle their NFT by sending funds directly to the seller`s email.
• Buyers settle their NFT by canceling the transaction before it completes.
• Buyers settle their NFT by confirming the transaction with their wallet and paying the gas price.

12. What is the purpose of the gas price in settling an NFT?

• The gas price is the cost to create an NFT from scratch.
• The gas price is the fee required to complete the transaction on the blockchain.
• The gas price is the fee charged by the marketplace for listing an NFT.
• The gas price is the price set by the seller for the NFT.

13. How can buyers track the status of their NFT settlement?

• Buyers can track the status by checking their email notifications.
• Buyers can track the status by selecting “View on Etherscan.”
• Buyers can track the status by calling the auction house directly.
• Buyers can track the status by logging into their social media accounts.

14. What are some popular NFT marketplaces?

• eBay
• Amazon
• Etsy
• Opensea

15. What is the role of smart contracts in NFT auctions?

• Smart contracts specify auction parameters, validate bids, and transfer ownership upon completion.
• Smart contracts facilitate live video streaming during the NFT auction.
• Smart contracts manage advertising strategies for the NFTs being auctioned.
• Smart contracts are used to create promotional materials for NFT auctions.

16. What is the minimum price in an NFT auction?

• The minimum price is determined by market value and cannot be set by the seller.
• The minimum price is the final sale price of the NFT after the auction ends.
• The minimum price is a fixed price that cannot change during the auction.
• The minimum price is the starting point for bids set by the seller.

17. What is the buy now price in an NFT auction?

• The buy now price is the fee charged by the platform for listing an NFT.
• The buy now price is the price set for bidding in a live auction only.
• The buy now price is the minimum bid a seller can accept in an auction.
• The buy now price is the amount at which the auction automatically concludes if met by a buyer.

18. How long does an NFT auction typically last?

• The auction lasts for a minimum of three weeks.
• The auction lasts until the first bid is placed.
• The duration is specified by the auction bid period set in the smart contract.
• The auction duration is fixed at one day only.

19. What fees are associated with listing an NFT for auction?

• Marketing costs, packaging expenses, and promotional charges apply.
• Shipping fees, handling costs, and import taxes are charged.
• Membership, registration, and login fees are required.
• Commission, transaction, and listing fees are typically involved.

20. Can NFT metadata be changed?

• Yes, NFT metadata can be changed by the owner, and the changes are reflected on the blockchain.
• No, NFT metadata is permanently fixed and cannot be altered.
• No, NFT metadata can only be updated by the auction platform.
• Yes, but only the original creator can change the metadata.

21. Are NFTs subject to legal risks?

• Yes, NFTs can be subject to legal risks, including issues related to ownership and intellectual property.
• NFTs are exempt from any legal regulations or risks.
• No, NFTs are completely legal and risk-free to use.
• Only physical art can face legal risks, not NFTs.

22. How do NFTs introduce scarcity in digital art?

• NFTs introduce scarcity by making each digital artwork unique and verifiable through blockchain technology.
• NFTs create scarcity by limiting the number of copies available to download.
• NFTs ensure scarcity by requiring a physical certificate for each piece.
• NFTs enforce scarcity by randomly selecting buyers for exclusive art.

23. What benefits do NFT creators receive from secondary sales?

• Creators lose all rights after the initial sale.
• Creators must pay fees on every secondary sale.
• Creators receive additional minting privileges for secondary sales.
• Creators can receive shares from secondary sales through smart contract programmability.

24. How do NFTs ensure the authenticity of digital art?

• NFTs ensure authenticity by encrypting the digital artwork within a file.
• NFTs ensure authenticity by associating art with a physical certificate of ownership.
• NFTs ensure authenticity by storing metadata and attributes on-chain with a unique token ID.
• NFTs ensure authenticity by creating multiple copies of digital art.

25. What is an NFT drop?

• An NFT drop is a method for burning digital assets.
• An NFT drop means a sudden price increase for NFTs.
• An NFT drop refers to the launch of a non-fungible token with a specified minting date and time.
• An NFT drop is an event for digital wallet giveaways.

26. What are the different types of NFT rarities?

• Basic, advanced, and expert are the types of NFT rarities, with expert being the highest level.
• Daily, weekly, and monthly are the different types of NFT rarities based on their release schedule.
• Common, rare, and legendary are the typical types of NFT rarities, with legendary often featuring historical figures.
• Bronze, silver, and gold are the classifications of NFT rarities, focusing on the material used.

27. How do NFT auction platforms handle payment?

• Payments are handled in cash, bypassing cryptocurrency transactions.
• Payments are made directly to the seller’s wallet without any mediation.
• Payments are made after the NFT is delivered to the buyer through traditional means.
• Payments are made to the smart contract, which then transfers the NFT to the winner and distributes the proceeds.

28. What is the purpose of the transfer function in an NFT auction smart contract?

• The transfer function transfers ownership of the NFT from the seller to the winner upon completion of the auction.
• The transfer function allows buyers to place bids during the auction period.
• The transfer function sets the reserve price for the NFT auction before bidding starts.
• The transfer function calculates the gas fees associated with the NFT auction process.

29. How do NFT auction platforms handle fees?

• Fees are only charged to the sellers regardless of the auction outcome.
• Fees are split between the seller and the platform hosting the auction, with a percentage taken by the platform.
• Fees are paid directly to the buyer when they win the auction.
• Fees are collected in fiat currency and transferred to the auctioneer.

30. What is the role of blockchain explorers in tracking NFT transactions?

• Blockchain explorers verify the authenticity of the NFT artwork.
• Blockchain explorers allow users to create new NFTs directly on the platform.
• Blockchain explorers only show the current price of NFTs.
• Blockchain explorers like Bitquery allow users to view all transactions related to the auction.