A non-fungible token (NFT) is a blockchain token with its own identifier. Each one is tracked on its own, so no two can be swapped as equals the way two units of a currency can. The token works as a public record of who holds one specific item, such as a digital image, a ticket or a domain name. Holding the token is not the same thing as holding the file it points to, or the copyright in the work.
Where the NFT market stands in October 2026
On 12 October 2026 the NFT marketplace Blur said it would shut down its website front end in November 2026. Its on-chain marketplace protocol will keep running. Blend, its NFT lending product, stops matching new loans on 12 November 2026, and borrowers have until then to repay or let their loans default. The Block reported the news and, using its own data, said Blur's monthly trading volume peaked at about $1.43 billion in March 2023 and had fallen below $7 million by March 2026. These figures rest on a single outlet's report and dataset.
For anyone holding NFTs, this matters in a practical way. A marketplace is only a front end. The token sits on the blockchain and stays in the holder's wallet whether or not a given website keeps running.
What "non-fungible" means
A fungible asset can be swapped one for one. One unit of a stablecoin is worth the same as any other unit. A non-fungible asset has properties that make it distinct. ethereum.org describes NFTs as "individually unique" tokens with "provably scarce" supply, where ownership is recorded on a public blockchain that anyone can check.
How an NFT works
The token standard
On Ethereum, most NFTs follow ERC-721, a standard created on 24 January 2018 by William Entriken, Dieter Shirley, Jacob Evans and Nastassia Sachs. The standard calls NFTs "deeds" and defines how smart contracts track and transfer them.
- Every NFT has a
uint256token ID that is unique inside its contract and does not change for the life of the contract. - The pair of contract address and token ID identifies one specific asset on an Ethereum chain.
- The standard's examples include physical property (houses, unique artwork), virtual collectibles, and "negative value" assets such as loans.
A second standard, ERC-1155 (created 17 June 2018), lets one contract manage any number of fungible, non-fungible and semi-fungible token types. ERC-721 needs a separate contract for each collection.
Where the image or file actually lives
ERC-721 has an optional metadata extension. Its tokenURI function returns a link that "may point to" a JSON file with a name, a description and an image. The standard says this link may change over time. In practice the token on the chain often holds only a pointer, and the artwork sits somewhere else. If that location goes offline or changes, the token stays where it is but may no longer show the intended file.
Bitcoin works differently. Under the Ordinals protocol, inscription content "is entirely on-chain", stored in taproot script-path spend scripts and attached to individual satoshis.
NFTs are not tied to one blockchain
NFTs exist on more than one network. Sotheby's lists Kevin McCoy's Quantum as first minted on the Namecoin blockchain on 3 May 2014. The artist preserved it in a new ERC-721 token on 28 May 2021, and it was sold in Sotheby's "Natively Digital" sale, whose lot closed on 10 June 2021. Ethereum and Bitcoin (through inscriptions) are other examples.
What you own when you buy an NFT
You hold a token that a specific contract assigns to your wallet address. Copyright, trademark and usage rights in the linked work are a separate legal question, and they depend on the terms that come with the sale.
The U.S. Copyright Office and the USPTO published a joint study, Non-Fungible Tokens and Intellectual Property, on 12 March 2024. It noted concerns that buyers and sellers often do not know which IP rights are involved in NFT transactions, and that NFTs can be used to make copyright or trademark infringement easier. The Offices concluded that existing enforcement mechanisms are sufficient and that no change to IP law was needed at that time. They recommended public education and product transparency instead.
Before buying, it helps to read:
- the licence or terms the creator attaches
- where the metadata and media are stored
- the contract address, to confirm it is the genuine collection and not a copy
What do you actually hold with this NFT?
Answer three questions about a token you hold or plan to buy to see which open points the article says to check.
Have you confirmed the contract address belongs to the genuine collection and not a copy?
- Yes, the contract address is confirmed → next question
- No, or not sure → Confirm the collection first
Where are the token's metadata and media stored?
- Entirely on-chain, such as a Bitcoin Ordinals inscription → next question
- Off-chain, behind a tokenURI link → next question
- I don't know → next question
Have you read the licence or terms the creator attached to the sale?
- Yes, I know which rights come with it → Content on-chain, terms known
- No → Your rights in the work are unclear
Have you read the licence or terms the creator attached to the sale?
- Yes, I know which rights come with it → Terms known, but the file sits elsewhere
- No → Your rights in the work are unclear
A token is identified by its contract address and token ID together. Until the contract address is confirmed, you cannot tell the genuine collection from a copy.
Holding the token is not the same as holding the copyright in the work. Copyright, trademark and usage rights depend on the terms of the sale, and the U.S. Copyright Office and the USPTO noted that buyers often do not know which rights are involved.
The content is stored on the chain with the token, and you know the licence terms. The other risks in the article still apply: resale value depends only on demand, a sale can take a long time or never happen, and platforms can shut down.
Under ERC-721 the tokenURI link may point to a JSON file and may change over time. If that location goes offline or changes, the token stays in your wallet but may no longer show the intended file.
This walks through the article's checklist only. It does not judge an NFT's value or price, confirm any licence's legal effect in your country, or say whether a token counts as a security or falls under MiCA.
What NFTs are used for
ethereum.org lists art, collectibles, game items, event tickets (including tickets for a specific seat), proof-of-attendance tokens, course certificates, online identity, content access and domain names. Creators can also program royalties into the contract, but whether a royalty is actually paid on resale depends on the marketplace and contract involved.
A record sale: Christie's, March 2021
On 11 March 2021 Christie's sold Beeple's Everydays: The First 5000 Days for $69.3 million including fees (a hammer price of $60.25 million), as reported by The Art Newspaper and others. It was the first time Christie's accepted cryptocurrency as payment.
How regulators treat NFTs
United States
On 28 August 2023 the SEC charged Impact Theory, a Los Angeles media company, with an unregistered offering of crypto asset securities. The company had sold NFTs called "Founder's Keys" between October and December 2021 and raised about $30 million from hundreds of investors. The SEC found the NFTs were investment contracts because buyers were encouraged to treat them as an investment in the business. Impact Theory settled without admitting or denying the findings and agreed to pay more than $6.1 million. It also agreed to destroy the Founder's Keys it held and give up royalties from future resales. Commissioners Hester Peirce and Mark Uyeda dissented in part. The SEC's view was about how the tokens were sold. It did not say that NFTs as a technology are securities.
European Union
The Markets in Crypto-Assets Regulation (Regulation (EU) 2023/1114, MiCA) excludes "crypto-assets that are unique and not fungible with other crypto-assets" from its scope (Article 2(3)). According to legal commentary on the text, fractional parts of a unique token are not treated as unique. Issuing NFTs in a large series or collection can also indicate that they are in fact fungible, which would bring them under MiCA. The label "NFT" alone does not settle the question.
Risks to understand
- Price depends on demand. An NFT has no cash flow. Its resale value depends entirely on whether another buyer wants it, and the 2023–2026 fall in marketplace volume shows how quickly that can disappear.
- Liquidity. Each token is distinct, so a fair price can be hard to find and a sale can take a long time or never happen.
- Off-chain storage. If the metadata link breaks, the token can lose the content it was bought for.
- Unclear rights. Buying the token does not, by itself, give you copyright in the work.
- Platform risk. Marketplaces, lending tools and whole networks can shut down, as Blur's front end and Blend lending are doing in November 2026.
Limitations: the October 2026 market data comes from one outlet. Rules on rights and regulation differ by country and by each sale's terms. This article is general information, not legal or investment advice.
