Just a technical question about NFTs and physical ownership. Are NFTs just a cryptographic key that points to digital goods or do they somehow encode them? If t

Just a technical question about NFTs and physical ownership. Are NFTs just a cryptographic key that points to digital goods or do they somehow encode them? If the former then the image is "on the cloud" and therefore actually on someone else's physical network, and the key will only be able to access the goods as long as a third party keeps the encrypted goods on their network. Once money has been exchanged what is in it for the third party keep hosting?