Not financial, legal, or tax advice. NFT values are highly speculative and can fall to near zero.
An NFT, or non-fungible token, is a unique, non-interchangeable token on a blockchain, typically used to represent ownership of a specific digital or real-world item. Unlike a coin, where every unit is identical and interchangeable, each NFT is distinct, part of the broader token landscape in \[pillar hyperlink: What Are Crypto Tokens\].
Definition
"Non-fungible" means each token is unique and not directly interchangeable with another, unlike a currency where one unit equals any other unit of the same value.
How they're minted
Creating an NFT, called minting, involves recording a unique token on a blockchain, often linked to a specific digital file or metadata describing what it represents. That record of ownership, not necessarily the underlying file itself, is what the blockchain actually tracks.
Use cases
NFTs have been used for digital art and collectibles, event tickets, and increasingly for representing ownership of real-world assets. See Tokenization of Real-World Assets for that broader trend.
Risks and hype caution
NFT markets have seen extreme speculative cycles, with many items losing most or all of their value once hype faded. Ownership of an NFT doesn't automatically confer copyright or other legal rights to the underlying content, which is a common point of confusion.