NFT is a unit of data stored in a digital ledger called the blockchain, which confirms that any digital file is unique. An NFT functions like a cryptographic token, but unlike cryptocurrencies like Bitcoin, it is not mutually interchangeable, in other words, it is not interchangeable.

NFTs create cryptographic hash sequence records, a set of characters that verify that a dataset is unique, when it strings into previous records, thus creating a chain of identifiable data blocks. This cryptographic transaction process ensures the authentication of each digital file by providing a digital signature that is used to track the ownership of the NFT. However, data links pointing to details like where the art is stored can die. Also, ownership of an NFT does not inherently copyright any digital assets the token represents.

While a person may sell an NFT representing their work, the buyer will not receive copyright privileges when ownership of the NFT changes and therefore the original owner is allowed to create more NFTs of the same work. In this sense, an NFT is merely a proof of ownership separate from the copyright.