The rise of Non-Fungible Tokens (NFTs) has transformed how digital creations are valued, traded, and owned in the digital economy. As blockchain-based assets gain mainstream traction, understanding their legal implications—particularly regarding ownership, rights, and intellectual property—is essential for creators, collectors, and investors alike.
What Are NFTs?
NFT stands for Non-Fungible Token, a unique digital asset verified using blockchain technology. Unlike fungible cryptocurrencies such as Bitcoin (BTC) or Ethereum (ETH), which are interchangeable and divisible, each NFT is distinct and cannot be exchanged on a one-to-one basis. This non-interchangeability and indivisibility make NFTs ideal for representing ownership of unique items in the digital world.
Since 2020, NFTs have surged in popularity within virtual collectibles and digital art markets. By storing detailed metadata—such as creator information, creation date, and transaction history—on an immutable and traceable blockchain ledger, NFTs provide verifiable proof of authenticity and provenance. This feature has empowered digital works to function as tradable digital assets, opening new frontiers in online commerce and creative monetization.
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What Can Be Turned Into an NFT?
Virtually any digital creation can be tokenized as an NFT. Platforms like OpenSea categorize NFTs across diverse domains including digital art, music, videos, domain names, and even social media posts.
Notable examples highlight the growing market value of NFTs:
- The viral YouTube video "Charlie Bit My Finger" sold for nearly $761,000 in May 2021.
- NBA Top Shot offers short highlight clips as NFTs, with some fetching between $200,000 and $250,000.
- Twitter co-founder Jack Dorsey’s first tweet was auctioned as an NFT for $2.9 million.
- In Taiwan, digital content such as special episodes from The President Is Coming 2 and fact-checking reports by the Taiwan Fact-Checking Center have also been issued as NFTs.
Most NFT transactions occur through platforms like OpenSea, Valuable by Cent, or Fansi. These marketplaces allow creators to upload digital works, mint them into NFTs on the blockchain, and list them for sale. While many platforms use cryptocurrency (e.g., OpenSea uses ETH), others like Fansi accept credit card payments. Creators can choose to auction their work or set fixed prices, letting market demand determine final valuations.
What Rights Do You Actually Get When Buying an NFT?
A common misconception is that purchasing an NFT grants full ownership or copyright of the underlying digital work. In reality, what buyers acquire depends heavily on the terms set by the creator or platform.
Legal Perspective on Ownership
Under traditional civil law frameworks, ownership (a form of property right) applies to tangible objects ("things") that can be physically controlled and independently satisfy human needs. According to Article 765 of the Civil Code:
"An owner may freely use, profit from, and dispose of their property within legal limits, excluding interference by others."
However, NFTs exist purely in digital form and lack physical embodiment. They do not clearly fit the conventional definition of “property” under civil law, making it difficult to assert complete ownership rights over them.
Some legal scholars argue that the concept of "property" should evolve to include intangible but controllable digital assets. If courts increasingly recognize blockchain records as legally possessable—similar to how some jurisdictions treat cryptocurrencies—NFTs may eventually qualify as objects of ownership.
Do You Own the Digital Work Itself?
Even if an NFT is deemed a form of property, owning the token does not automatically transfer ownership of the associated digital content. Just as buying a DVD gives you possession of the disc but not the film’s copyright, acquiring an NFT typically only grants ownership of the token—not the intellectual property behind the artwork or media.
For example:
- The buyer of a The President Is Coming 2 NFT owns the token linked to a specific video file but does not gain rights to publicly screen or redistribute the content.
- Copyright remains with the original creator unless explicitly transferred through a formal agreement.
Can You Acquire Copyright?
Under Taiwan’s Copyright Act Article 36:
"Copyright ownership may be partially or fully transferred. In cases where terms are unclear, transfer is presumed not to have occurred."
Most NFT platforms do not transfer copyright to buyers. Instead, they offer limited usage rights via licensing agreements. For instance:
- Dapper Labs allows personal use and limited commercial use (under $100k annual revenue), but prohibits modification or trademarking.
- Christie’s auction house explicitly states that winning bidders receive no guarantee of copyright or reproduction rights.
- Artist Takashi Murakami’s contracts confirm that buyers do not own rights to his iconic “flower” motif; these remain with his company Kaikai Kiki.
Thus, most NFT purchases amount to acquiring a non-exclusive license to display or use the digital work under defined conditions—not full copyright or exclusive control.
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Frequently Asked Questions
Q: Does owning an NFT mean I own the digital artwork?
A: No. You own the token representing the artwork, not necessarily the artwork itself. Usage rights depend on licensing terms set by the creator.
Q: Can I sell or modify an NFT I bought?
A: You can resell the NFT unless restricted by contract. However, modifying the underlying artwork usually requires explicit permission from the copyright holder.
Q: Can someone else copy my NFT image online?
A: Yes. Anyone can view or screenshot the image. Your ownership lies in the verified blockchain record—not in preventing others from viewing or copying it.
Q: How is my NFT protected from theft or duplication?
A: While copies of files can be made, only one person holds the authenticated token on the blockchain. Security depends on safeguarding your private keys and wallet.
Q: What happens if I lose access to my digital wallet?
A: Losing your wallet credentials means losing access to your NFT permanently. There is no central authority to recover lost assets.
Q: Are NFTs legally recognized as property?
A: Legal recognition varies by jurisdiction. Some courts have treated crypto assets as property; similar precedents may extend to NFTs over time.
How Is NFT Infringement Recognized?
One major challenge in the NFT space is unauthorized minting—where individuals tokenize others’ artwork without consent. Due to the anonymous and borderless nature of blockchain networks, tracking infringers is difficult.
When someone uploads another’s artwork to create an NFT, they likely violate:
- Reproduction rights: Copying the work onto a platform.
- Public transmission rights: Distributing it online without authorization.
Platforms like OpenSea respond reactively: upon receiving formal takedown notices, they remove infringing content and may ban repeat offenders. BakerySwap requires users to certify originality when minting, but this doesn’t prevent early hijacking of popular works.
As a result, buyers must remain vigilant—checking official channels for announcements about authentic NFT drops—to avoid purchasing counterfeit tokens.
The Road Ahead: Legal Evolution Meets Digital Innovation
As physical media decline and streaming dominates content consumption, legal frameworks must adapt to protect creators and clarify ownership in digital environments. Current laws struggle to keep pace with fintech innovations like NFTs. Clearer regulations on digital asset ownership, licensing standards, and cross-border enforcement are needed.
Until then, informed participation—knowing what you’re buying, reading license terms carefully, and verifying authenticity—is key for anyone entering the NFT ecosystem.
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