NFT

An NFT, or non-fungible token, is a digital asset verified on a blockchain that represents ownership or provenance of a specific item or content. Unlike cryptocurrencies, each NFT is unique or only partially interchangeable, meaning it cannot be exchanged one-for-one. NFTs are often used to assert digital scarcity and link a digital file—such as art, music, or video—to a verifiable owner.

Most NFTs are created through smart contracts on blockchains that support programmable tokens, most commonly Ethereum. Standards such as ERC-721 and ERC-1155 define how tokens are created, transferred, and interacted with. A token typically references metadata describing the asset and may point to the actual file stored elsewhere, on-chain or via decentralized storage networks. Ownership and transfer history are recorded on the blockchain, providing a public provenance trail. Marketplaces enable minting, listing, bidding, and purchasing.

Common uses include digital art and collectibles, in-game items, music and other media, domain names, tickets, and virtual real estate in online worlds. NFTs can provide programmable royalties to creators through smart contracts when the token is resold.

Rights conveyed by an NFT depend on the issuer’s terms; owning an NFT does not automatically confer copyright or reproduction rights unless stated. NFT ownership is primarily a claim of provenance and scarcity, not direct control of the asset unless licensed. Environmental and financial concerns are cited, including energy use on some blockchains, speculative prices, and potential for fraud.

Regulatory attention has grown around consumer protection, securities laws for certain offerings, and copyright considerations. As the technology matures, alternatives and improvements such as layer-2 solutions and proof-of-stake blockchains aim to reduce energy use and transaction costs.