NFTs

NFTs, or non-fungible tokens, are digital assets that exist on a blockchain and certify ownership or proof of authenticity of a unique item or set of items. Each NFT has distinct metadata and a token ID that distinguishes it from other tokens; ownership is recorded on the blockchain and can be transferred through transactions. While many NFTs are tied to digital artwork or collectibles, they can represent real-world assets, virtual real estate, music, video game items, domain names, or certificates of authenticity.

Most NFTs are created on Ethereum using standards such as ERC-721 or ERC-1155. Smart contracts define properties, provenance, transfer rules, and royalties. NFTs are bought and sold on marketplaces; buyers typically use cryptocurrency wallets and pay network transaction fees, with costs influenced by network activity and gas prices. Some projects use layer-2 solutions or alternative blockchains to reduce fees and energy use.

Common use cases include digital art, collectible items, music, in-game assets, and tokenized access or memberships. NFTs can provide verifiable provenance and, in some cases, programmable royalties that pay creators on future sales, though enforcement varies across platforms and jurisdictions.

Criticisms and risks include market volatility, scams, copyright and authenticity concerns, counterfeit items, and the potential for wash trading. Regulatory uncertainty and environmental impact have been cited, though some networks are shifting toward more energy-efficient designs. As the ecosystem evolves, questions of interoperability, standards, and consumer protection remain central to ongoing development.