I watched someone spend $10,000 on an NFT of a pixelated cartoon character. They were excited. They owned it now. Except when I asked what exactly they owned, they couldn't really explain it.

Turns out, they didn't own the image. They didn't own the copyright. They owned a token on a blockchain that pointed to the image. And that distinction matters a lot more than people realize.

What You Actually Get

When you buy an NFT, you're buying a unique token recorded on a blockchain. That token usually contains a link to a piece of digital content, like an image or video. The blockchain proves you own that specific token. It doesn't necessarily prove you own the content itself.

Think of it like buying a certificate of authenticity for a painting. You own the certificate. That doesn't mean you own the painting or the rights to reproduce it. You just own proof that you bought the certificate.

Most NFT buyers don't own the copyright to the underlying artwork. The artist still does. You can't reproduce it, sell prints of it, or use it commercially unless the creator explicitly grants you those rights. And many don't.

The Real World Comparison

This confused me until I thought about physical collectibles. If you buy a signed baseball card, you own that specific card. You don't own the player's signature or the right to reproduce it. You own the physical item with the signature on it.

NFTs work the same way, except the item is digital and the proof of ownership lives on a blockchain instead of in your hand.

The blockchain part is actually useful. With physical collectibles, you need experts to verify authenticity. With NFTs, the blockchain does that automatically. You can prove you own a specific token and trace its entire ownership history back to the original creator.

Where It Gets Complicated

Here's where NFT ownership gets messy. The token contains a link to the content, but that content is usually stored somewhere else, not on the blockchain itself. If the server hosting the image goes down, your token still exists, but the thing it points to might be gone.

Some NFTs store the content on decentralized networks to avoid this problem. Others don't. As a buyer, you might not know which you're getting.

There's also the screenshot problem. Nothing stops someone from right-clicking your NFT and saving the image. They can use it as their profile picture or print it on a t-shirt. They don't own the token, but they have the image. For some people, that defeats the whole point.

When NFT Ownership Makes Sense

Despite all this, NFTs do solve real problems in specific situations.

Digital artists can sell their work and automatically receive royalties every time it's resold. That wasn't possible before. The smart contract built into the NFT handles it.

Concert venues can issue tickets as NFTs, eliminating counterfeits. You can prove you own a legitimate ticket, and the venue can verify it instantly.

Game developers can let players truly own in-game items. You can buy a sword in one game and potentially use it in another, or sell it to another player. The NFT proves ownership outside of any single company's control.

These use cases aren't about owning a JPEG. They're about proving ownership of something digital in a way that can't be faked.

Why This Matters

I'm not telling you to buy NFTs. Most of what sold for absurd prices during the hype cycle was speculation, not value.

But understanding what NFT ownership actually means protects you from expensive misunderstandings. If you think you're buying full rights to an image when you're really just buying a token, you're going to be disappointed.

NFTs are a tool. Like any tool, they're useful in some situations and pointless in others. Knowing the difference comes down to understanding what ownership actually means in this context.

You own a token. That token might come with additional rights, or it might not. Always check what you're actually getting before you spend money on it.