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A non-fungible token (NFT) is a special type of cryptographic token which represents something unique; non-fungible tokens are thus not mutually interchangeable. This is in contrast to cryptocurrencies like bitcoin, and many network or utility tokens that are fungible in nature.

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Non-fungible tokens are used to create verifiable digital scarcity, as well as digital ownership, and the possibility of asset interoperability across multiple platforms. NFTs are used in several specific applications that require unique digital items like crypto art, digital collectables, and online gaming.

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Art was an early use case for NFTs, and blockchain in general, because of its ability to provide proof of authenticity and ownership of digital art that has otherwise had to contend with the potential for mass reproduction and unauthorized distribution of art through the internet.

 

In February 2021 a hype started when US-American digital artist Beeple's work "Everydays. The first 5000 days" was the first NFT artwork to be listed in one of the major auctions houses Christie's. A few days before, the meme animation Nyan Cat had been sold on an internet market place for 600,000 USD.

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Later, popular blockchain games like CryptoKitties made use of NFTs on the Ethereum blockchain. NFTs have also been used to represent in-game assets that are controlled by the user instead of the game developer. This lets the assets be traded on third-party marketplaces without permission from the game developer.

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