Saturated by the question ‘How does this work?’ I decided to write down a technical answer in one breath.
Take, for instance, the fascinating artwork by Albert called The Dance shown above. When the artist uploads the artwork to the digital gallery SuperRare, a transaction is created in the Ethereum blockchain: here it is. The transaction essentially moves an ERC-721 SuperRare token associated with the artwork to the crypto wallet of the artist that created the piece. Notably, the transaction is digitally signed by the artist to prove authenticity of the work.
The artwork (I mean the image) is then uploaded on the InterPlanetary File System, or IPFS for short.
IPFS and blockchain are a perfect match! You can address large amounts of data with IPFS, and place the immutable, permanent IPFS links into a blockchain transaction. This timestamps and secures your content, without having to put the data on the chain itself. ipfs.io
You can retrieve the very same image on IPFS using its hash: here it is. Enchantment!
Finally, when the artwork is sold, another transaction is issued on the Ethereum blockchain: the token is moved to the wallet of the buyer (user 0x1001…) and a value of crypto currency equal to 0.6 Ether is moved to the wallet of the seller (user 0x7f67…). Notice, the transaction also releases a previous lower bid of 0.1 Ether by another user. The transaction fee (0.00070905 Ether) will be collected by the miner of the block of the transaction.
Pretty neat, uh?