Non-Fungible Token (NFT)
A unique digital asset that represents ownership of a specific item or piece of content on the blockchain.
NFT (Non-Fungible Token) differs from regular cryptocurrencies in that each token is unique and cannot be replaced by another (like the Mona Lisa painting). 1 BTC = 1 BTC, but 1 NFT ≠ 1 NFT.
Technically, an NFT is a smart contract (usually ERC-721 or ERC-1155 standard on Ethereum) containing a link to a media file and ownership history. These standards define how tokens are created and transferred between users.
NFTs can be purchased on marketplaces like OpenSea, Rarible, or Magic Eden. Popular use cases: digital art (Beeple, CryptoPunks), gaming items, music, domain names, event tickets, digital identity.
Environmental concerns: NFTs on Ethereum previously consumed significant energy due to Proof-of-Work, but after the 2022 transition to Proof-of-Stake, energy consumption decreased by 99.9%.
graph LR
Center["Non-Fungible Token (NFT)"]:::main
Rel_wrapped_token["wrapped-token"]:::related -.-> Center
click Rel_wrapped_token "/terms/wrapped-token"
Rel_non_fungible_token_nft["non-fungible-token-nft"]:::related -.-> Center
click Rel_non_fungible_token_nft "/terms/non-fungible-token-nft"
Rel_proof_of_personhood["proof-of-personhood"]:::related -.-> Center
click Rel_proof_of_personhood "/terms/proof-of-personhood"
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🧠 Knowledge Check
🧒 Explain Like I'm 5
A digital certificate of ownership that can't be copied or faked. Like having the original Mona Lisa instead of just a photo of it.
🤓 Expert Deep Dive
NFTs are typically implemented as smart contracts adhering to specific [token standards](/en/terms/token-standards), most notably ERC-721 (Ethereum) and its variants (ERC-1155 for semi-fungible tokens). The core contract manages token ownership mapping (address to token ID) and provides functions for transfer, approval, and metadata retrieval. Metadata is often stored off-chain (e.g., on IPFS) and referenced by a URI within the token's properties, posing a challenge for long-term data persistence and integrity ('rug pull' risk). The immutability of the blockchain ensures ownership records are tamper-proof, but the underlying asset's availability and integrity depend on external factors. Security vulnerabilities can arise from [smart contract exploits](/en/terms/smart-contract-exploits) (re-entrancy, integer overflows) or issues with the metadata storage and resolution mechanisms. Architectural trade-offs involve balancing on-chain storage costs (gas fees) with decentralization and data availability. The fungibility aspect is deliberately broken by unique token IDs and distinct metadata, enabling digital scarcity.