NFT Art Ownership Rights Quiz

1. What does NFT stand for in the context of art ownership?

• Non-Fungible Trade.
• Non-Financial Transaction.
• Neutral Fund Transfer.
• Non-Fungible Token.

2. What is the primary function of a smart contract in NFT ownership?

• To establish a fixed price for NFT resale transactions.
• To manage ownership, distribution of profits, and decision-making processes among fractional owners.
• To create digital copies of physical assets for trading purposes.
• To provide security features like encryption for NFTs.

3. What is fractional ownership in the context of NFTs?

• The selling of shares in an NFT to public investors.
• The rental of an NFT for temporary use.
• The division of ownership of an NFT among multiple individuals.
• The complete ownership of an NFT by a single individual.

4. How are NFTs stored?

• In a cloud storage service.
• On a blockchain.
• In a physical art gallery.
• On a local hard drive.

5. What is unique about NFTs?

• They are interchangeable with other tokens.
• They are one-of-a-kind and easily verifiable.
• They are universally accepted currencies.
• They are designed for physical art only.

6. What rights do you receive when you buy an NFT?

• Unlimited rights to modify and create derivatives of the artwork.
• Full copyright and distribution rights to the artwork.
• Sole access to and control of the smart contract of the NFT.
• Exclusive rights to sell the original artwork on any platform.

7. What is the purpose of a private key in NFT ownership?

• To generate new NFTs.
• To sell the NFT directly.
• To create copies of the artwork.
• To control the smart contract.

8. Can you make copies of the original work if you own the NFT?

• No, you automatically get copyright upon purchase.
• Yes, ownership includes all reproduction rights.
• No, unless the copyright is separately transferred to you.
• Yes, you can freely duplicate the work.

9. How is copyright transferred in the context of NFTs?

• By transferring it anonymously on social media.
• Through a general sale receipt.
• By verbal agreement only.
• Through an assignment or license in writing.

10. What is the difference between an assignment and a license of copyright rights?

• An assignment transfers all rights, while a license transfers fewer rights.
• An assignment keeps rights with the original owner, while a license sells them.
• An assignment allows sharing rights, while a license only allows public display.
• An assignment licenses all rights, while a license transfers ownership.

11. What rights might be excluded from the purchaser of an NFT?

• Rights to alter the smart contract.
• Rights to display the artwork publicly.
• Rights to sell the original work.
• Rights to create derivative works or reproductions of existing works.

12. What is the purpose of using Creative Commons licenses with NFTs?

• To create multiple identical copies of the artwork.
• To permanently transfer ownership of the artwork.
• To share rights and allow for specific uses of the artwork.
• To restrict access and limit usage of the artwork.

13. How does NFT fractional ownership democratize access to high-value NFTs?

• By increasing the price of high-value NFTs for individual buyers.
• By enabling only wealthy investors to participate in ownership.
• By allowing individuals to buy exclusive rights to high-value NFTs.
• By dividing ownership among multiple investors, making it more accessible.

14. What are the risks associated with NFT fractional ownership?

• Assurance of unanimous decisions among all owners.
• Guaranteed profit from reselling the NFT fractions.
• Lack of control over the NFT, potential disputes among co-owners.
• Complete ownership rights over the original NFT.

15. How do smart contracts manage ownership in fractional ownership?

• By manually tracking ownership changes through emails.
• By relying on third-party notaries for verification.
• Through physical documents stored in a safe.
• Through self-executing contracts with terms written into code.

16. What is the legal complexity introduced by NFT fractional ownership?

• Simplified ownership transfer with clear rules.
• Immediate liquidity and cash flow for fractional owners.
• Uniformity in NFT valuation across different markets.
• Complexity in determining ownership rights and responsibilities, including tax implications and intellectual property rights.

17. Can a platform display an NFT image for public viewing without permission?

• Yes, it can display without any restrictions.
• No, only if the NFT owner agrees to it.
• Yes, permission is never required for NFTs.
• No, typically the platform needs permission from the copyright holder.

18. How does the blockchain nature of NFTs affect ownership?

• It allows for unlimited copying of the NFT without restrictions.
• It guarantees physical possession of the digital artwork.
• It ensures transparency and trust by recording ownership on the blockchain.
• It makes ownership anonymous and unverifiable.

19. What happens if the sales platform does not mint the NFT?

• The platform will refund the buyers immediately.
• The platform cannot confirm ownership without the NFT being minted.
• The platform will proceed with the sale anyway.
• The platform will automatically transfer all rights.

20. Can a platform possess an NFT without owning it?

• No, but it can create a duplicate NFT.
• No, it is highly unusual and not recommended.
• Yes, it can hold an NFT for others.
• Yes, ownership can be shared freely.

21. How do future resale royalties work in NFTs?

• They are only paid out if the NFT is held for a year.
• They are manually collected by artists after each sale.
• They are automatically paid out to creators when the NFT is sold, handled by the blockchain.
• They are determined by the sales platform during the transaction.

22. Does the platform need to get involved in collecting royalties?

• Yes, the platform is responsible for all royalty distributions.
• Yes, the platform must manually collect the royalties.
• No, the platform has no involvement in royalties at all.
• No, it is automatically handled by the blockchain.

23. How does an artist know when a transfer has occurred and royalties are due?

• The artist must manually check the sales records.
• The artist waits for a physical letter from the buyer.
• The artist receives a monthly statement from the sales platform.
• The artist is notified automatically by the blockchain.

24. What happens in the event of a dispute over an NFT?

• The NFT becomes void, and ownership is lost.
• The current owner can pursue the artist or sales platform, depending on the contract terms.
• The original creator automatically regains ownership of the NFT.
• The dispute is resolved by a public vote among NFT holders.

25. Can a platform add to the blockchain that it was involved in the sale as agent without taking title to the NFT?

• Yes, but only if it`s the primary seller.
• No, it must hold the title to add this information.
• Yes, it can become part of the NFT’s provenance.
• No, it requires full ownership of the NFT.

26. Do you automatically own the rights to the artwork’s subject matter when you buy an NFT?

• No, the rights are automatically transferred with purchase.
• Yes, you own all rights to the artwork.
• No, you only own the NFT itself.
• Yes, you can create derivative works immediately.

27. What happens if the creator of an NFT does not have permission to use the likeness of a celebrity in the artwork?

• The celebrity could take legal action against the artist for unauthorized use.
• The creator would receive a fine but keep the artwork.
• The NFT would be erased from existence by the platform.
• The artwork would automatically become public domain.

28. Can you sell, assign, alienate, lease, lend, fractionalize, re-gift, convey or transfer an NFT to any other person or entity?

• No, it is not allowed under any circumstances.
• Only if you have special permission from the original creator.
• Yes, you can sell or transfer an NFT.
• Yes, but only to family members or close friends.

29. What is the purpose of holding NFTs for personal benefit?

• To increase its market value for future resale.
• To share ownership with multiple investors.
• To gain exclusive rights to copyright and reproduction.
• To avoid selling or transferring the NFT to any other person or entity.

30. How does the creator of an NFT own the rights to how the artwork is presented?

• The creator only has rights to sell the NFT once.
• The creator owns the rights to the color, composition, and other artistic choices made in creating the piece.
• The creator loses all rights after the NFT is sold.
• The creator must give permission for all public displays.