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NFTs: The Blockchain Ownership Tokens That Rarely Transfer Copyright

NFTs: The Blockchain Ownership Tokens That Rarely Transfer Copyright

NFTs are blockchain-based records proving ownership of a unique digital token — not the underlying work. After a 2021 speculative boom, the market collapsed over 90%.

Non-fungible tokens (NFTs) are blockchain-based records proving ownership of a unique digital asset, built primarily on Ethereum smart contracts (ERC-721 standard). Unlike cryptocurrency tokens, which are interchangeable, each NFT has a unique identifier. The NFT market saw a speculative frenzy in 2021 — peak monthly trading volumes reached several billion dollars, with individual artworks and profile-picture collections selling for millions. The market subsequently collapsed over 90%, with most collections becoming worthless. A common misconception: buying an NFT rarely transfers copyright or exclusive rights to the underlying work. The NFT is a token pointing to metadata (often stored off-chain); the buyer owns the token, not necessarily the artwork, music, or video it references. The legal framework remains unsettled. The technology does solve a genuine problem — provenance tracking for digital items — but enforcement of those ownership claims in practice proved difficult, and the speculative frenzy overshadowed utility-focused applications. **See also:** Greater Fool Theory: When Asset Prices Depend Entirely on Finding the Next Buyer

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Finance

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April 13, 2026

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