Definition
NFTs are unique blockchain tokens that prove ownership of specific items—digital art, music, virtual real estate, gaming items, or real-world asset representations. Unlike cryptocurrencies (which are fungible—one BTC equals any other BTC), each NFT is unique and non-interchangeable. NFTs exploded in popularity in 2021 but experienced a significant market correction. The technology has genuine utility for digital ownership and provenance.
lightbulb Example
An artist mints a digital artwork as an NFT on Ethereum. The NFT proves authenticity and ownership on the blockchain. When sold for 5 ETH, the smart contract automatically pays the artist a 10% royalty on each subsequent resale.
verified_user Key Points
- Unique, non-interchangeable digital tokens
- Proves ownership and authenticity on blockchain
- Use cases: art, gaming, real-world assets, identity
- Market experienced boom (2021) and correction (2022-23)