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What is an NFT, and how do these affect artists?

Since 2020, non-fungible tokens (NFT) have gained popularity in the art market. Find out exactly what they are, and how artists’ and creators’ rights may be affected by them. Understand their legal implications compared to more traditional forms of ownership and copyright.

What is an NFT?

‘Fungible’ means a commodity that is interchangeable with something identical.

‘Non-fungible’ means a commodity that’s unique, and cannot be replaced by something else.

‘Token’ is a representation or symbol.

An NFT is a digital token that is unique, and cannot be replicated. It represents ownership of a particular digital asset. Owning an NFT represents owning the digital asset.

Status of an NFT

A digital, non-fungible token can be used to represent an artwork, but it should not be confused with the artwork itself. An NFT is simply a collection of code that is written on to the ‘blockchain’.

This means an NFT can serve as a digital authentication certificate and provenance record for a specific version of a digital artwork, allowing that version to be sold and resold in a similar way to physical artworks.

The blockchain

This is a technology where data is stored in protected blocks, within a database that cannot be altered. It’s effectively an indelible digital ledger. It can be used to record transactions in blocks of time-stamped computer code.

The code can include information about the owner of a digital artwork, as well as the location of the digital artwork represented by the NFT. This means the data does not need external authentication for validity.


You buy and sell NFT with cryptocurrency, a digital currency which does not need to be verified by a bank. Cryptocurrencies are stored on the ‘blockchain’.

Relevance of NFT for artists

An NFT can be assigned to any digital file, from an image to a piece of music or film. It represents ownership of the ‘original’ work. So NFT and blockchain technology can be used to sell digital art.

NFT offer artists a way to sell work that may be difficult to market and sell in traditional ways. They can introduce the work to a growing audience of digital art enthusiasts and collectors.

Making an NFT related to a work

Artists interested in exploring creating on the blockchain, need to ‘mint’, that is to create, an NFT. How to do that:

  • Join a marketplace (for example, OpenSea or Rarible).
  • Set yourself up to buy and receive cryptocurrency by creating a crypto wallet to store it in. Most cryptocurrencies are part of the Ethereum (ETH) blockchain, and most NFTs are also part of the ETH blockchain.
  • Create your NFT by uploading a supported file from your computer, giving it a title and adding any other relevant details.


Image conversion

Most NFT marketplaces do not charge fees to convert your image into an NFT.

Marketplace joining fee

There may be a marketplace joining fee, depending on which you choose, and a transaction fee, depending on how you make your NFT available for sale. If you sell your NFT for a fixed price, the buyer pays the transaction fees. For auction sales, the seller takes on this cost.

Crypto wallet initialisation fee

When you first sell an NFT, you need to initialise your crypto wallet. There is a one-off fee for that for first time sellers. It is calculated by the marketplace you use.

Commission fee

Marketplaces charge a commission fee for each sale. This can range from 2.5% to 15% – and possibly higher.

Smart contracts

This type of contract is common for NFT transactions. Written in code embedded by the blockchain, they include the terms of the contract within the NFT itself. The code is often programmed to start automatically when a set of predefined conditions have been met. Smart contracts are stored on the blockchain, so their details cannot be deleted or altered.

Smart contracts are self-executing: this means that no action is required after the contract has been triggered. A real-world comparative example is a vending machine that dispenses a snack when the correct amount of money is paid in.

Can smart contracts be trusted

Many people view smart contracts as a way of increasing the speed and efficiency of transactions, as the automated process provides certainty to the parties and avoids error in execution of the contract. There are questions around enforceability, as very little case law or legislation covers the issue of smart contracts.

In theory there is no reason why smart contracts cannot be legally binding if the usual key elements are present:

  • offer
  • acceptance
  • consideration
  • intention to create legal relations

The Law Commission concluded in 2021 that ‘the current legal framework in England and Wales is clearly able to facilitate and support the use of smart legal contracts’. The related document includes a useful summary of different types of smart contracts.

As with any contract, all involved need to understand the terms they’re agreeing to. With smart contracts, there could additionally be conflicts between the terms of the smart contract and the standard terms and conditions of the particular NFT marketplace. It’s important to understand all the implications – it could affect things like copyright ownership in a physical work connected to an NFT.

Read about the Law Commission’s findings on smart legal contracts

Legal status of an NFT

Owning an NFT represents ownership of a digital file. Ownership is made legally binding through a smart contract, which outlines terms and future trading or resale of the works.

IP, copyright and moral rights

Intellectual property laws like copyright and moral rights apply to NFTs in the same way as for physical works.

Protecting your rights

If someone else creates an NFT using one of your works, claiming the work as their own, this may infringe your copyright and your moral rights.

Find out what to do about copyright infringement

Notice and takedown procedure

Most NFT marketplace platforms operate a notice and takedown procedure for requesting removal of infringing content from their platforms. The procedure is usually described within each platforms’ terms and conditions. They usually include the contact details for submitting takedown requests.

Reproduction by the copyright owner

Creating and selling an NFT connected to a work does not prevent the artist or creator from continuing to make and sell physical prints of that work, if they still own the copyright. But this could change if copyright is transferred when the NFT is sold.

Be aware of:

  • the terms in smart contracts
  • the standard terms and conditions of NFT marketplaces – these may affect copyright

If copyright is transferred when a physical work is sold, the buyer could legally reproduce the work, as well as create an NFT connected to it, without the artist or creator’s permission, if the agreed sale terms:

  • include passing copyright to the buyer
  • did not include restrictions specifically preventing them from creating an NFT

Your moral rights may still need to be considered, for example, the right of attribution.

Learn more about moral rights


The content of this article is not intended to be applied to individual circumstances. It is not legal advice, and is not a substitute for independent legal advice.