An NFT, short for non-fungible token, is a type of digital asset recorded on a blockchain that represents ownership of something unique, such as digital artwork, a collectible, or in-game item. The word "non-fungible" means each token is distinct and cannot be exchanged on a one-to-one basis with another, unlike a regular cryptocurrency such as Bitcoin, where one coin is interchangeable with any other.
When someone buys an NFT, what they are actually purchasing is ownership of a token that points to a specific piece of content, recorded permanently on the blockchain. This does not necessarily transfer copyright over the underlying artwork or content itself, which has been a frequent source of confusion among newcomers.
NFTs gained significant mainstream attention through digital art and collectible projects, with some pieces selling for substantial sums, though the market has since gone through significant volatility, and many NFTs that were purchased at high prices have lost most of their resale value.
