What is an NFT?

NFT stands for non-fungible token. Each token has a separate identity, even when several tokens in a collection display similar images. They are not interchangeable ownership records.

For an Ethereum ERC-721 token, check the network, contract address and token ID together. A collection name is insufficient: another contract can use the same name. A smart contract records ownership, while the image and its description may be stored elsewhere.

What rights come with an NFT?

Token ownership and copyright in the associated work are separate. Permission to reproduce, modify or sell merchandise featuring an image depends on its license. Buying the token does not remove copies of the file from the internet. Membership benefits or game access may also depend on an external service continuing to operate.

Example

In a hypothetical art collection, Alex buys token 42 on Ethereum while Morgan holds token 43 from the same contract. The ownership record for 42 changes to Alex's wallet; Morgan's record for 43 does not change. If Alex wants to sell T-shirts featuring the artwork, the collection's license must permit that use. The token ownership record alone is not commercial permission.

The NFT buying checklist covers practical checks before a purchase. Our NFT market analysis explains how trading volume differs from independent buyer demand.