EthereumIntermediate

What Is an NFT?

A clear explanation of non-fungible tokens — what makes them different from typical cryptocurrencies, and what they can and can't represent.

6 min readPublished 2026-09-21

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A different kind of token
Fungible vs. non-fungible
What an NFT actually records
Common uses
What to remember

Key takeaways

What to remember

An NFT is non-fungible: each one is unique, unlike a typical interchangeable cryptocurrency.
An NFT's on-chain record often points to, rather than stores, the underlying file.
NFTs have been used for digital art, collectibles, access tokens, and unique item ownership.
Owning an NFT doesn't automatically grant full legal rights to its underlying content.

A different kind of token

A non-fungible token, or NFT, is a token that represents something unique, rather than something interchangeable. This is the core distinction from a typical cryptocurrency, where every unit is identical and worth the same as any other.

Fungible vs. non-fungible

One bitcoin is worth the same as any other bitcoin — that's fungibility. An NFT is the opposite: each one is distinct, and two NFTs from the same collection can have very different characteristics and value from one another.

What an NFT actually records

An NFT's blockchain record establishes ownership and transfer history for that specific token. Importantly, this record doesn't necessarily store the underlying digital file, such as an image, directly on-chain — it commonly stores a reference or pointer to where that file is hosted, which is a detail worth understanding.

Common uses

Digital art and collectibles, where the NFT represents ownership of a specific unique item.
Access or membership tokens, where holding a specific NFT grants access to something.
Representing unique real-world or in-game items in a verifiable, transferable way.

Why it matters

Owning the token isn't always the same as owning full rights to the content

Depending on the specific project's terms, owning an NFT may or may not include copyright or other legal rights to the underlying content it represents. Reading a project's specific terms, rather than assuming, is the only reliable way to know what an NFT actually grants.

What to remember

An NFT is non-fungible: each one is unique, unlike a typical interchangeable cryptocurrency.
An NFT's on-chain record often points to, rather than stores, the underlying file.
NFTs have been used for digital art, collectibles, access tokens, and unique item ownership.
Owning an NFT doesn't automatically grant full legal rights to its underlying content.