An NFT (non-fungible token) is a digital certificate of ownership recorded on a blockchain. Buying an NFT does not automatically transfer copyright in the work represented by the token. If you plan to buy, sell or mint NFTs, you need to understand the distinction between ownership of the token and intellectual property rights, because confusing the two creates real legal risk.
What is an NFT?
NFT stands for non-fungible token. It operates on a blockchain, but unlike cryptocurrencies it is unique. It cannot be exchanged for another token of the same value.
For comparison, if you own bitcoin, you can exchange it for another cryptocurrency. An NFT is one of a kind, and this feature was intended to distinguish it in the crypto-asset market.
Legal classification: why it matters
Because NFTs are non-fungible, they do not constitute virtual currency as defined in Article 2(2)(26) of the Act of 1 March 2018 on anti-money laundering and countering the financing of terrorism.
At the same time, if a particular NFT is used to acquire specific goods or services, it may be treated as virtual currency.
Takeaway: The legal classification, and therefore the tax classification, depends on how the token is used. Determine this before the transaction, not after it.
How is an NFT created?
NFTs are minted, meaning created with a computer program, and stored in a cryptocurrency wallet. Technically, an NFT is a unique code assigned to a digital object.
What can an NFT represent?
Almost anything in digital form:
- a graphic or illustration,
- a musical work,
- a social media post, such as Jack Dorsey’s tweet sold in 2021 for $2.9 million,
- an item in a computer game,
- any other digital object.
How does blockchain provide authenticity?
- An NFT is assigned to a code on a blockchain, which guarantees the uniqueness of the relevant copy.
- All transactions are recorded on the token, from the work’s creation through to its last owner.
- Blockchain technology makes this data immutable.
From a civil-law perspective, NFTs may be treated as signs of legitimation, meaning carriers that confirm the origin and authenticity of a digital object.
Intellectual property law and NFTs
NFTs are not covered by separate legislation or extensive case law in Poland. Legal analysis relies on the general principles of intellectual property law.
What do you buy when you acquire an NFT?
This is the most important distinction to understand:
- You acquire: ownership of a specific copy or version of the work represented by the NFT.
- You do not automatically acquire: copyright in the work underlying the token.
The rights you receive depend solely on the terms of the licence or assignment agreed with the seller, and those terms may differ for each NFT.
What can you not do without a copyright transfer?
If copyright has not been validly transferred, as the NFT owner you do not have the right to:
- reproduce the work,
- distribute copies of it,
- perform or display it publicly,
- create derivative works based on the original.
Example: A buyer of the NFT containing Jack Dorsey’s tweet does not own copyright in the tweet’s text. The buyer has only an electronic copy.
When does copyright transfer to the buyer?
Only when both of the following conditions are met:
- The author of the original work expressly agrees to transfer the rights.
- The agreement transferring economic copyright is made in written or electronic form, under pain of nullity.
The written-form problem in NFT transactions
This creates a practical risk. Most NFT transactions take place on online exchanges, such as Rarible, where:
- users’ identities are unknown, and only a login and cryptocurrency wallet address are required,
- the tokens’ value is speculative and expressed in cryptocurrency,
- the transaction is carried out using a smart contract, without a written agreement between the parties.
Result: The written-form requirement is not met, and copyright does not automatically pass to the buyer. You buy a token, not the rights to the work.
The NFT market: current state and prospects
The NFT market went through a market crash in 2022-2023. Investor activity fell by 50% at the beginning of 2022 (data: nonfungible.com). Since then, the market has matured and the discussion has shifted from speculation towards practical applications.
Where are NFTs used today?
- Art authentication: preventing piracy and copyright infringement online.
- Gaming: the gaming sector remains closely connected with NFT technology and continues to develop.
- VR and AR: the development of virtual and augmented reality is opening up new areas of application.
What still needs regulation?
Legal regulation of NFTs, at both national and EU level, remains a challenge for lawmakers. If you operate in this market, monitor legislative changes and secure your transactions with agreements that clearly define the scope of the rights being transferred.
Frequently asked questions
What exactly is an NFT, and how does it differ from a cryptocurrency? An NFT (non-fungible token) is a unique digital certificate of ownership recorded on a blockchain. Unlike cryptocurrencies such as bitcoin, an NFT cannot be exchanged for another token of the same value. Each NFT is one of a kind. For that reason, an NFT does not constitute virtual currency under the anti-money laundering law unless it is used to acquire specific goods or services.
When I buy an NFT, do I also acquire copyright in the related work? No. Buying an NFT means acquiring ownership of a specific copy or version of the work represented by the token, but copyright in that work does not automatically pass to the buyer. The rights you receive depend solely on the terms of the licence or assignment agreed with the seller, and those terms may differ for each NFT.
What rights does an NFT buyer actually have if copyright has not been transferred? Without a valid transfer of economic copyright, you have only an electronic copy of the work. You may not reproduce or distribute it, perform or display it publicly, or create derivative works based on the original. The example of Jack Dorsey’s tweet illustrates this: the buyer of the $2.9 million NFT does not own copyright in the tweet’s text, only its digital copy.
When can copyright in a work validly pass to an NFT buyer? Copyright passes to an NFT buyer only when both conditions are met: the author of the original work expressly agrees to transfer the rights, and the agreement transferring economic copyright is made in written or electronic form, under pain of nullity. If either condition is missing, copyright remains with the creator, regardless of how much was paid for the token.
Why does buying an NFT through an exchange and a smart contract usually not transfer copyright? On NFT exchanges, such as Rarible, users’ identities are unknown and only a login and cryptocurrency wallet address are required. The transaction is carried out using a smart contract, without a written agreement between the parties. As a result, the written or electronic form required for a valid transfer of economic copyright is not met. You therefore buy the token, not the rights to the work, and a smart contract alone does not change that.
