Crypto glossary
NFT (non-fungible token)
An NFT, or non-fungible token, is a unique blockchain token that records ownership of a specific item such as digital art, a collectible or a ticket.
Unlike bitcoin or an ERC-20 token, where every unit is interchangeable, each NFT has its own identifier and cannot be swapped one-for-one with another. On Ethereum most NFTs follow the ERC-721 or ERC-1155 standards. The token usually points to metadata and a file, such as an image, stored on a server or on decentralized storage like IPFS.
NFTs exploded in 2021 with profile picture collections such as CryptoPunks and Bored Ape Yacht Club and sales like Beeple's artwork for $69 million at Christie's. Beyond art they are used for gaming items, event tickets, domain names, membership passes and, increasingly, to represent real-world assets.
Owning an NFT does not automatically grant copyright over the underlying work, and if the linked file is stored off-chain it can disappear. Trading volumes and prices fell sharply after the 2021-2022 peak, and the market remains illiquid, prone to wash trading and phishing scams.
Example
A musician sells 1,000 NFTs that act as tickets to a concert; each token has its own number, can be resold on a marketplace and is checked at the door by scanning the holder's wallet.
Related terms
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