NFT

An NFT (non-fungible token) is a unique blockchain token that represents ownership of a specific item. Unlike a cryptocurrency, where every unit is interchangeable, each NFT is one of a kind and cannot be swapped one-for-one with another.

How it works

An NFT is created, or “minted,” by a smart contract that records who owns a particular token ID. The token usually points to metadata — an image, video, document or in-game item — and the blockchain provides a public, verifiable record of ownership and transfer history. Ownership of the token does not automatically transfer copyright in the underlying work.

Why it matters

NFTs introduced a standard way to prove digital scarcity and ownership, with applications in art, collectibles, gaming, event ticketing and identity. Their value is highly subjective and market-driven, and the convenience of off-chain metadata can be a weak point if it is not stored durably.

Example

A digital artwork sold as an NFT records the buyer’s address on-chain as the current owner of that specific token.

NFT: Frequently Asked Questions

What makes an NFT different from a cryptocurrency?

A cryptocurrency is fungible: every unit is interchangeable and can be swapped one-for-one. An NFT is non-fungible: each token is unique, recorded under its own token ID by a smart contract, and cannot be exchanged one-for-one with another. That uniqueness is what lets NFTs represent ownership of a specific item rather than a divisible balance.

Does owning an NFT mean I own the copyright to the artwork?

Not automatically. An NFT records on-chain that you own a particular token, which usually points to metadata such as an image or video. Ownership of the token is separate from copyright in the underlying work, which typically stays with the creator unless rights are explicitly transferred. Always check the specific terms attached to a given NFT.

What are the main risks of buying an NFT?

NFT value is highly subjective and market-driven, so prices can swing sharply or collapse. A common technical risk is off-chain metadata: if the image or file the token points to is not stored durably, it could become unavailable even though the token persists. Researching how an NFT's content is stored and why it has value is important before buying.

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