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The Psychology of Non-fungible Tokens

Some considerations regarding the role of beliefs about NFTs.

Key points

  • Tokens have long been used to govern people’s behavior. Significantly longer in the case of economics than psychology.
  • Tokens allow efficient behavioral control, as they are easier to deliver immediately than many primary rewards.
  • An NFT does not stand in the same relationship as currency with its betokened, but it is solely tied to one object and bought with other tokens.

Those who follow the celebrity and arts news may have heard of a recent spate of sales and proposed sales of something called non-fungible tokens (NFTs).1,2 Some NFTs have been speculated to fetch large prices1, and some have already been sold for very large prices.2

For those not (yet) familiar with this term from the digitised economy, it may be worthwhile exploring the nature of NFTs. Although little is known about the psychology around NFTs, research exists about the effects of tokens, how they are regarded, how they affect behaviours and the likely consequences of all of this for economically-related behaviour.

An NFT is a kind of digital address given to a digital artifact – such as digital artworks, pictures, videos – anything that can be digitised. It is a token standing for the digital artifact – purchase of which allows access to that digital artifact. It is like a “certificate of ownership.”3 ‘Non-fungible’ means it is not exchangeable for anything else.

In this way, an NFT is not like digital currency (cryptocurrency), where tokens (coins) can be exchanged for anything in the marketplace. Rather, buying NFTs is like buying the things for which they stand.4 There is a debate about whether NFTs are perceived as separate from the artifact, but let’s assume that they are. So, what is the point of these NFTs – what are they meant to allow us to do?

Tokens have long been used to govern people’s behaviour – significantly longer in the case of economics than psychology. The Mesopotamian shekel was introduced some 5,000 years ago, and human bartering emerged at least 1,000 years earlier (possibly significantly longer ago than that for some other species). Prior to currency, efforts were exchanged directly for outcomes, but afterward, work was exchanged for tokens (cash), which could then be exchanged for desired outcomes.

Money allowed several things to happen that impacted human behaviour (these can be seen when nonhumans use tokens, but it doesn’t happen much outside the laboratory).5,6 Tokens extended the range of things that can be acquired through work – the person earning the money gets to choose what they exchange it for (assuming there’s anything left after taxes and basics!).

This allows outcomes to be more effective, as they are chosen by, rather than being given to, the person.6 Moreover, tokens allow efficient behavioural control, as they are easier to deliver immediately than many primary rewards.6,7 For instance, token economies in schools that reward behaviour with points, exchangeable for items/activities, are easier for teachers than providing immediate access to items/activities, which can disrupt the ongoing behaviours they are meant to promote.7

The advantages of tokenising have not been lost on the digital marketplaces.3,8 The use of tokens has been introduced in games and other digital activities to reward users effectively and quickly, without disrupting engagement with the digital platform (or inhibiting exposure to advertising). There is nothing new in this tokenisation, and it can be presumed that the psychological aspects attending our relationship with money will attend to digital tokens and cryptocurrencies. With the possible exception that we may feel even more distant from our money than we did – and that may impact how seriously we take it.

Although NFTs are tokens and allow all sorts of digital artifacts to be traded that were previously difficult to sell, like digital artwork,3,8 they are not cryptocurrencies – that is where the non-fungible part comes in. The power of money, real or crypto, partly resides in its exchangeability for many items or services, but an NFT stands for only one thing; it can be bought and sold but cannot be exchanged for something else. These differences introduce intriguing psychological possibilities for the impact of NFTs on digital-economic behaviour. To explore these possibilities, we need to return to the behaviours of nonhuman animals.

A stimulus sometimes acquires the properties of the thing it predicts or signals. For example, if a light signals the occurrence of food, then pigeons can behave towards the light as they behave towards the food (they try to eat it).9 If the signal is an item to be exchanged for the outcome (a token), then animals have a difficult time relinquishing the item, as the token acquires the positive properties of the thing for which it is to be exchanged.10

We can see how this relates to the way in which some people (misers) hold onto money, even when in no danger of needing that money in the future. The associations have taken over, and people treat money as if it has intrinsic value rather than being valued for its ability to acquire desired outcomes.

This will all doubtless be true of cryptocurrencies – but the relationship of NFTs to outcomes is quite different. However, because they are new to many, and the names are confusing, people might think of NFTs as they think of fungible tokens, and that could cause difficulties.

An NFT does not stand in the same relationship as currency with its betokened, but it is solely tied to one object and bought with other tokens. In this way, an NFT is like a key to a room in which there is a fresco that can never be removed from that room or like a theatre ticket to a single (perhaps repeating) event. While there is very little research on this, it can be suspected that our relationship with a key or ticket is very different from our relationship with money. We don’t hoard unused tickets (although they may acquire personal value after the event), and we don’t behave the same way to a ticket as we do to the performance.

Additionally, there is research on the behavioural impacts when tokens are used to gain other tokens, which then lead to outcomes – again, conducted in the animal-learning laboratory.5,6 We have seen that a signal (token) associated with an outcome (desired goods/activities) acquires some properties of said outcome.9

If the outcome becomes devalued, then the token becomes devalued11; this rarely happens when tokens can be exchanged for many outcomes. However, when the token is associated with another token (which is associated with an outcome), and the outcome becomes devalued, the initial token-token association is not devalued, and still drives behaviour – the animals continue to respond.12 This suggests a token-for-token economic system may be insensitive.

Perhaps NFTs will not acquire the properties of their artifacts – remember, they do not predict the future occurrence of items like signals, which may make a difference.13 Whether this finding translates outside the learning laboratory to human economic behaviour remains to be seen, but lots of findings do.

We are entering a digital economic age – we need to learn about this and be aware that the old relationships between currency and goods are no longer quite what they were. This may have consequences for our economic behaviours, especially our sensitivities to the marketplace, needing careful evaluation.


1. Stolworthy. J. (14.5.22). Madonna defends decision to sell a 3D model of her vagina. The Independent. Madonna NFT model of her vagina defended by singer after fan confusion | The Independent.

2. Frank, R. (11.3.22). Beeple NFT becomes most expensive ever sold at auction after fetching over $60 million. CNBC. Beeple NFT is most expensive ever sold at auction, tops $60 million (

3. Chohan, R., & Paschen, J. (2021). What marketers need to know about non-fungible tokens (NFTs). Business Horizons.

4. Sharma, T., Zhou, Z., Huang, Y., & Wang, Y. (2022). “It's a blessing and a curse”: Unpacking creators’ practices with non-fungible tokens (NFTs) and their communities. arXiv preprint arXiv:2201.13233.

5. Tan, L., & Hackenberg, T.D. (2015). Pigeons’ demand and preference for specific and generalized conditioned reinforcers in a token economy. Journal of the Experimental Analysis of Behavior, 104(3), 296-314.

6. Hine, J.F., Ardoin, S.P., & Call, N.A. (2018). Token economies: Using basic experimental research to guide practical applications. Journal of Contemporary Psychotherapy, 48(3), 145-154.

7. Kim, J.Y., Fienup, D.M., Oh, A.E., & Wang, Y. (2021). Systematic review and meta-analysis of token economy practices in K-5 educational settings, 2000 to 2019. Behavior Modification, 01454455211058077.

8. Wilson, K.B., Karg, A., & Ghaderi, H. (2021). Prospecting non-fungible tokens in the digital economy: Stakeholders and ecosystem, risk and opportunity. Business Horizons.

9. Jenkins, H.M., & Moore, B.R. (1973). The form of the auto-shaped response with food or water reinforcers. Journal of the Experimental Analysis of Behavior, 20(2), 163-181.

10. Boakes, R.A. (2021). P erformance on learning to associate a stimulus with positive reinforcement. In Operant-pavlovian interactions (pp. 67-101). Routledge.

11. Colwill, R.M., & Rescorla, R.A. (1985). Postconditioning devaluation of a reinforcer affects instrumental responding. Journal of Experimental Psychology: Animal Behavior Processes, 11(1), 120.

12. Rescorla, R.A. (2014). Pavlovian second-order conditioning (psychology revivals): studies in associative learning. Psychology Press.

13. Barnet, R.C., Cole, R.P., & Miller, R.R. (1997). Temporal integration in second-order conditioning and sensory preconditioning. Animal Learning & Behavior, 25(2), 221-233.