NFT Ownership & Copyright Explained: What You Actually Own in 2025

Introduction

You just bought a popular NFT for 1 ETH. You own the JPEG, right? Can you now print it on t-shirts and sell it? Does the original artist still get paid if you resell it? The answers to these questions are often misunderstood, leading to confusion and legal missteps.

Understanding NFT ownership, royalties, and copyright is crucial for both creators and collectors. The blockchain introduces a new paradigm for digital ownership, but it doesn’t automatically rewrite centuries of copyright law.

This guide will demystify what you’re actually buying, explain the revolutionary but fragile concept of royalties, and clarify the critical differences between owning an asset and owning the copyright to it. This knowledge will protect you from legal trouble and help you make informed decisions.

1. What Do You Actually Own When You Buy an NFT?

This is the most important question. Your ownership is specific and layered.

You Own a Cryptographic Token, Not (Necessarily) the Copyright.

• The NFT Itself: You own the non-fungible token on the blockchain. This is a unique piece of code that contains metadata and a pointer to a specific digital file. Your ownership of this token is indisputable and publicly verifiable on the blockchain.
• The “Key” to the Community: Ownership often grants access to exclusive perks: private Discord channels, IRL events, future airdrops, and voting rights in the project’s community (governance). This is a primary driver of value for many NFTs.
• A Personal Use License: Most reputable projects grant the NFT owner a license to use the underlying artwork for personal, non-commercial use. This typically means you can use it as your profile picture, print it for your wall, or even create derivative art for fun. This is not the same as owning the copyright.

What You (Usually) Don’t Own:

• The Copyright: Unless explicitly stated in the terms, you do not own the intellectual property (IP) rights to the underlying artwork.
• The Image File: The JPEG or video file itself is usually stored on a decentralized storage system like IPFS or Arweave. You “own” the immutable link to that file, but not the IP rights to the file’s contents.

Analogy: Buying a physical painting.

• You own the physical canvas (the NFT token).
• You can display it in your home (PFP), sell it, or give it away.
• You do not own the right to make prints and sell them (commercial use). That right remains with the artist (the copyright holder).

2. The Revolution: Creator Royalties

One of the most groundbreaking features of NFTs is the ability to program royalties directly into the smart contract.

• How It Works: When the original creator deploys the NFT smart contract, they can encode a royalty percentage (e.g., 5-10%). Every time the NFT is sold on a secondary market (like OpenSea), that percentage of the sale price is automatically sent to the creator’s wallet.
• The Impact: This provides artists with a continuous revenue stream from the secondary market, a concept that was nearly impossible to enforce in the traditional art world. It aligns the success of the collector with the success of the creator.

3. The Royalty Crisis: Enforcement is Not Guaranteed

While a revolutionary idea, royalty enforcement has become a major point of contention.

• The Problem: Royalties are not enforced by the blockchain itself, but by marketplaces that choose to honor the code. Some marketplaces (like Blur and Sudoswap) have made them optional to attract traders with lower fees, breaking the social contract.
• The Result: If a sale happens on a marketplace that doesn’t enforce royalties, the creator gets nothing. This has forced many creators to find new models, like relying on primary sales or building utility that isn’t funding-dependent.

As a collector, choosing to pay royalties is now often an ethical choice.

4. Copyright and Intellectual Property (IP)

Copyright law is separate from blockchain technology. It hasn’t changed.

• Copyright is Automatic: The moment an original work is created and fixed in a tangible medium, copyright belongs to the creator.
• What an NFT Creator Can Do: The project creator can choose one of several models:
  1. No Commercial Rights (Personal Use Only): This is the default for most PFP projects. You can’t monetize the art.
  2. Full Commercial Rights: Some projects (e.g., CryptoPunks, Bored Ape Yacht Club) grant the owner full commercial rights to their specific NFT’s artwork, allowing them to create and sell products. This is rare and highly valuable.
  3. Specific License: Some projects create custom licenses that outline exactly what you can and cannot do.

5. A Practical Guide for Buyers and Creators

For Collectors: How to Know What You’re Buying

1. Read the Project’s Terms or License: Before you buy, find the project’s website and look for a “Terms,” “License,” or “FAQ” section. This document legally defines your rights.
2. Beware of “CC0” Projects: Some projects waive their copyright entirely and designate the art for the public domain (a “CC0” license). This means anyone, including you and your competitors, can use the art for any purpose.
3. Respect Royalties: Understand that paying optional royalties supports the creators and the ecosystem’s health.

For Creators: How to Protect Your Work

1. Be Explicit: Clearly state what rights you are granting to owners on your website. Use plain language.
2. Consider Your Royalty Strategy: Be aware that royalties may not be a reliable income stream. Build a project that can sustain itself beyond royalty payments.
3. Seek Legal Counsel: For a major project, it is worth investing in a lawyer to draft a clear and legally sound license agreement.

Conclusion

NFT ownership and copyright are often conflated, but they are distinct concepts. Navigating this landscape requires careful attention and a shift from traditional notions of ownership.

1. Own the Token, Not (Always) the IP: You own the verifiable blockchain token and the community access it grants, but you must check the license to understand your rights to the underlying art.
2. Royalties are a Social Contract: While a revolutionary feature for creators, their enforcement is not guaranteed by the blockchain and depends on marketplace policy and collector ethics.
3. Do Your Homework: The responsibility is on the collector to read the license and on the creator to write a clear one. Never assume you have commercial rights.
4. The Space is Evolving: Laws and norms around NFT IP are still being established. Proceed with caution, especially for high-value commercial endeavors.

By understanding these nuances, you can participate in the NFT ecosystem more responsibly, ethically, and safely.

FAQ

Q: If I own a Bored Ape, can I start a brand with it?
A: Yes, you can. This is a prime example of a project that grants full commercial rights to the owner of the NFT. This means you can create and sell merchandise, produce TV shows, or start a restaurant using your specific Ape’s imagery. This granted right is a huge part of its value. However, this is the exception, not the rule. Always verify a project’s terms.

Q: Can an NFT project change its royalties after launch?
A: Generally, no. The royalty percentage is usually hardcoded into the immutable smart contract during deployment. However, because enforcement depends on external marketplaces, the effective royalty rate can change if major markets stop honoring the on-chain royalty specification. The creator cannot change the code, but the ecosystem can choose to ignore it.

Q: I made a derivative artwork of an NFT I own. Who owns the copyright to my new work?
A: This is a complex legal area, but in general: you likely own the copyright to the original elements you created (your unique drawing style, new elements you added). However, your derivative work is likely considered a derivative work under copyright law. Creating and distributing it commercially could still require permission from the original copyright holder (the NFT project), unless their license explicitly grants you that right. When in doubt, seek permission.

Q: What does “CC0” mean for an NFT project?
A: CC0 is a public domain designation. It means the creator has waived all their copyright and related rights to the work worldwide. For an NFT project, this means:

• Anyone can use the art for anything – commercial, non-commercial, remixes, etc. – without requiring permission.
• This includes you. You can use your NFT’s art to create and sell products.
• But so can everyone else. Your competitors can use the exact same art, which can dilute the uniqueness and commercial value. Some projects (like Nouns) thrive under this model, as it encourages widespread memeing and adoption.