What Are NFTs? How They Work Beyond the Hype
What NFTs really are, how ownership records and metadata work, practical uses in ticketing and loyalty, why many NFT projects failed, and what buyers often misunderstand.
Web3 & Blockchain
What is Non-Fungible Token?
Quick answer
A unique digital token recorded on a blockchain that represents ownership of a specific item, such as artwork, a collectible, or a ticket.
Non-Fungible Token, explained
Fungible items are interchangeable: one bitcoin or one rupee note is equivalent to another. A non-fungible token (NFT) is unique, with its own identifier and metadata on a blockchain, so it can represent a specific digital or physical asset.
NFTs became widely known around 2021 through digital art and collectible sales, some at very high prices, followed by a sharp market decline. Beyond art, proposed uses include event tickets, in-game items, memberships, certificates, and proof of authenticity for physical goods. It is important to understand that owning an NFT does not automatically grant copyright, and the actual media file is often stored off-chain. Scams, wash trading, and speculative bubbles have also been common.
Related terms
Blockchain
A shared, append-only digital ledger in which records are grouped into blocks that are cryptographically linked in sequence.
EthereumA programmable blockchain platform, launched in 2015, that runs smart contracts and has its own cryptocurrency called Ether.
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