Non-Fungible Token (NFT) Definition

A non-fungible token (NF) is a digital asset that represents something unique, not something you can trade one-for-one with another. Each token has metadata that describes the item and often links to the media file itself. This metadata and the token’s record are stored on a blockchain, so anyone can see who owns the token and when it changed hands.

Key characteristics

• Uniqueness: Each NFT has identifiers or metadata that set it apart from other tokens.
• Proof of origin: The blockchain keeps a public record showing when a token was created and who made it.
• Transferable: NFTs can be bought, sold, or moved between wallets using blockchain transactions.
  These features help creators add rarity and a clear history to digital items.

How NFTs are created and stored

Creating an NFT, or minting, means adding a new token to a blockchain ledger. This entry usually has a unique ID and a link to metadata that describes the item. The media file itself might be stored elsewhere, like on decentralized storage or a web server, while the token on the blockchain keeps the pointer and ownership record. Smart contracts set the rules for making and transferring tokens.

Common uses

NFTs are used in different areas where it’s important to prove something is unique or who owns it:

• Digital art: Artists sell original works as NFTs, so buyers can own a verifiable edition.
• Collectibles: Cards, moments, and similar items are turned into tokens that collectors can trade.
• Gaming: In-game items can be made into tokens that players truly own and can trade.
• Music and media: Creators use NFTs with songs, videos, or event tickets to find new ways to sell and share their work.
  Marketplaces and special platforms let creators make tokens and buyers trade them.

Ownership and marketplaces

Owning an NFT means you control the private keys for the wallet that holds the token. When you sell an NFT, a blockchain transaction updates the token’s record and shows the new owner in the public history. Many marketplaces make this easy by connecting wallets, showing collections, and handling sales.

Practical limits and concerns

NFTs make it easy to prove ownership, but owning a token does not mean you control how a file is copied online. Since tokens and marketplaces are part of the larger crypto world, it’s important to check projects, smart contracts, and platform rules before buying or selling. Guides about scams and how to research projects can help you avoid mistakes.

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