Fungible means swappable. One ten-pound note does the same job as any other, so you never mind which one you are handed. A numbered seat at a concert is different: the ticket refers to that seat and no other. NFTs are the numbered-ticket version of a <a href="/glossary/token/">token</a>, and the whole design exists so that one unit can be distinguishable from the next.
What you own is worth being precise about. The chain records that a particular token identifier belongs to your address. The artwork itself is usually stored elsewhere, referenced by a link in the token's metadata, so the picture can move or disappear if whoever hosts it stops paying. Owning the token also does not transfer copyright unless a licence separately says so, which many collections never do.
In practice, minting and transferring cost network fees, marketplaces take a cut, and creator royalties are enforced by marketplace policy rather than by the chain in most cases. Useful non-art applications exist too, including ticketing, credentials and in-game items, where uniqueness matters more than any resale market.
The risks deserve plain language. Markets for individual collections are thin, so a listed price is not a price you can get, and an item can sit unsold indefinitely. Reported trading volume can be inflated by wash trading between related accounts. Fake collections copy real artwork and metadata almost perfectly, and the most damaging losses usually come from signing a malicious transfer approval on a lookalike mint site, a pattern covered in our <a href="/toolkit/how-to-spot-crypto-scams/">scam-spotting guide</a>.
Key takeaways
- The token is on-chain; the image usually is not, so check where the media and metadata are actually stored.
- Owning an NFT is ownership of a record, which is a separate matter from owning copyright in the artwork.
- The biggest practical danger is not a bad purchase but a bad signature on a lookalike minting site.
NFT — frequently asked questions
If anyone can copy the image, what am I buying?
You are buying the on-chain record of ownership, not exclusivity over the pixels. That record can carry real weight when it grants access, proves provenance for a collector, or unlocks something inside a game or event. It can equally be worth very little if nobody else cares about the collection. Be clear about which of those you are relying on.
Are NFTs and cryptocurrencies different things?
They are different token types on the same infrastructure. Cryptocurrencies are fungible, so amounts are interchangeable and divisible. NFTs are unique and usually indivisible, tracked individually by identifier. Both live in the same wallet, both move using the same network fees, and both are recorded on the same public chain, which is why one wallet can hold each of them side by side.
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