What Are NFTs?

An NFT, or non-fungible token, is a unique entry on a blockchain that points to something. One bitcoin is interchangeable with any other bitcoin, which makes it fungible. An NFT is deliberately one of a kind, which makes it useful for representing ownership of a specific item.

What you actually own

This is the part most coverage skips. Buying an NFT usually gives you a token whose data points to a file, often stored elsewhere. It rarely transfers copyright, and if the file is hosted on a normal web server that shuts down, the image can disappear while the token remains. Serious projects store data on decentralised storage and state the licence terms clearly.

Uses beyond profile pictures

• Event tickets that cannot be counterfeited and can be resold with rules attached.
• In-game items that players own rather than rent from a publisher.
• Domain names and identity on blockchain naming systems.
• Real-world asset records such as property or certificate registries, still mostly experimental.

You can see how the wider sector is trading on our NFT coins page.

Why prices collapsed

The 2021 boom was driven by speculation, cheap money and a belief that buyers would keep arriving. When they stopped, prices for most collections fell more than ninety percent. Illiquidity made it worse: a floor price means nothing when there are no bids. The technology did not fail, the pricing did.

Before you buy

Check where the artwork is stored, what rights come with the token, how many exist, who holds the largest share, and whether real trading volume exists or the same few wallets trade with each other. Treat any NFT purchase as spending, not investing, and never connect your main wallet to an unfamiliar minting site. Our scam guide covers the wallet-draining tricks that target NFT buyers specifically.