Glossary
What is an NFT?
In one sentence
An NFT is a token representing ownership of one specific item rather than an interchangeable amount — most visibly used for digital art.
“Non-fungible” means not interchangeable. One bitcoin equals another; one NFT is distinct from every other. That property makes NFTs a way to record which address owns a particular item.
It is worth being precise about what is actually owned. In most cases the blockchain records a token pointing at a URL, and the artwork itself sits on an ordinary server or a distributed file system. Owning the token does not usually confer copyright, and if the hosting lapses the image can disappear while the token remains.
The 2021 boom saw enormous speculative sums paid for profile-picture collections, followed by a collapse in which the great majority lost nearly all their value and liquidity. Anyone considering an NFT should assume it may be unsellable.
The underlying idea — a verifiable public record of who owns a specific thing — has real applications in ticketing, credentials and provenance. Those are quieter and more plausible than the art speculation that made the term famous.
For example
Owning an NFT of an image is not the same as owning the copyright to it, and rarely includes it.