From Sean's piece:
An artist can "tokenize" a piece of work and then sell it, and the buyer can prove that what they just bought is the original thing sold by the artist. And because the blockchain is public, every time that artwork changes hands it's recorded in a public ledger and at any point someone can verify the piece is legitimate and trace the chain of custody all the way back to the artist who originally released it. (Or the impersonator, as the case may be) Like an old library check out card, the blockchain records who owned it for how long, and if it was given to them or if they bought it, and if they did how much they paid. Which is a fascinating way to track value fluctuation (hopefully appreciation) over time.
I think this is one of the biggest and most important details – whoever originally creates the NFT is hard coded into the ledger and can specify a royalty that they should receive anytime the work is sold in the future. Traditionally secondary market sales happen like this: Andy makes a painting and asks Larry to sell it for him. Larry has a gallery and sells Andy's painting to Kirk. Andy typically gets 50% of that sale. So if Kirk bought it for $1000, Andy just made $500. Larry did too, but that's a different story. Anyway, say 10 years later Andy has become a much more popular artist and Kirk decides to sell that painting and asks Christie to sell it for him, Christie will take a 20% fee for doing that and 80% will go to Kirk. Andy gets nothing. So if Christie sells that painting for $1M, Kirk makes $799,500, Christie makes $200,000, but Andy gets nothing. He's still only got that original $500 from Larry. However if that painting was an NFT, and Andy is the one who made it Andy could specify that anytime that work is ever sold in the future, he gets a % of that sale.