Crypto glossary: What is an NFT and how do nonfungible tokens work?

With cryptocurrency dominating headlines, many people are trying to understand the terminology behind digital assets. One of the most talked-about terms is the nonfungible token — better known as an NFT.

NFTs are a special type of crypto asset in which each token is unique. That’s what makes them different from fungible assets like Bitcoin or traditional currency, where each unit holds the same value and can be exchanged one-for-one.

Because NFTs are one of a kind, they can be used to verify ownership of specific digital items. These can include artwork, music, virtual real estate, digital collectibles and more. Many people compare NFTs to certificates of authenticity for digital content.

Their uniqueness allows creators and collectors to buy, sell and trade digital assets while maintaining verified ownership through blockchain technology.

As interest in virtual collectibles continues to grow, NFTs remain one of the most widely used and discussed innovations in the cryptocurrency space.

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