What is an NFT (Non-Fungible Token)?
Answer
An NFT (Non-Fungible Token) is a unique digital asset whose ownership and provenance are recorded on a blockchain. "Non-fungible" means each token is unique and not interchangeable — unlike ETH (1 ETH = 1 ETH, fungible). Key properties: (1) Uniqueness — each NFT has a unique token ID on its smart contract; (2) Verifiable ownership — the blockchain records who owns each NFT, publicly and immutably; (3) Programmable royalties — creators can receive royalties automatically on secondary sales; (4) Interoperability — NFTs follow standards (ERC-721, ERC-1155) that wallets and marketplaces understand. What NFTs represent: digital art, collectibles, game items, music, virtual real estate, event tickets, membership passes. Important clarification: an NFT is a token on the blockchain; the associated file (image, video) is often stored off-chain (IPFS or centralized server). The NFT proves you own the token, not necessarily that you own exclusive rights to the underlying content. The NFT boom of 2021 saw billions in trading volume on platforms like OpenSea.