You're not buying the image, you're buying one of a finite number of tokens representing ownership. So I have #8/30 of a particular piece. If anyone else wants one of those 30, they have 30 potential sellers to buy from. If they want #8 they can only buy it from me. Anyone can copy/paste the image, but that's like taking a photo of an autograph.
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Why do some list edition #1 being more value than edition #5?
It's up to the artist, I guess everyone wants the very first edition. Those who don't charge more for #1 usually find it sells first.