An NFT, or Non-Fungible Token, is a type of digital asset that represents ownership or proof of authenticity of a unique item or piece of content, using blockchain technology, which is the underlying technology of cryptocurrencies like Bitcoin and Ethereum.
While cryptocurrencies are fungible, meaning each unit or “coin” is the same as every other, non-fungible tokens are unique. Each NFT has information or attributes that make it different from any other NFT, and this information is stored in its metadata. They can be associated with digital files, like digital artwork, music, videos, in-game items, and more.
Ownership of an NFT does not necessarily mean ownership of the copyright of the associated digital file, just as owning a painting does not transfer the copyright of the painting. What you own is a kind of digital certificate of the item saying you own it.
NFTs have gained significant attention due to their potential to revolutionize various industries such as art, music, gaming, real estate, and more by providing proof of ownership, provenance tracking, and enabling new ways to buy, sell or trade digital assets. However, they are also subject to criticism for their environmental impact, as the blockchain technology they rely on, particularly Ethereum, can be energy-intensive.