NFT (Non-Fungible Token)
A non-fungible token (NFT) is a blockchain-based record that represents unique ownership of a specific digital or digital-linked item, distinguishing it from fungible tokens like cryptocurrency where every unit is interchangeable.
Definition
A non-fungible token (NFT) is a blockchain-based record that represents unique ownership of a specific digital or digital-linked item, distinguishing it from fungible tokens like cryptocurrency where every unit is interchangeable.
Overview
NFTs are typically issued through a smart contract on a blockchain such as Ethereum, following a standardized token format that assigns each token a unique identifier and metadata pointing to the associated asset — commonly artwork, music, collectibles, in-game items, or event tickets. Because each token is distinct and tracked individually on the blockchain, ownership and transfer history can be verified publicly. NFTs gained mainstream attention around 2021 as digital art marketplaces let creators sell verifiably unique digital works directly to collectors, with smart contracts sometimes encoding automatic royalty payments to the original creator on future resales. The underlying pattern has since been applied more broadly across gaming, ticketing, membership access, and identity within the Web3 ecosystem. It's worth noting that owning an NFT typically records ownership of the token itself, not necessarily exclusive copyright over the underlying artwork or content, a distinction that has been a frequent source of confusion and legal debate.
Key Concepts
- Each token has a unique identifier, unlike interchangeable cryptocurrency units
- Ownership and transfer history are publicly verifiable on-chain
- Metadata typically links the token to an associated digital or physical asset
- Standardized token formats allow interoperability across marketplaces and wallets
- Smart contracts can encode automatic creator royalties on resale
- Tradable on dedicated NFT marketplaces and some general crypto exchanges
Use Cases
Frequently Asked Questions
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