Non-Fungible Token (NFT)
Token que representa um ativo único e não intercambiável, registrado em uma blockchain, usado para comprovar a posse de itens digitais ou reais.
Key points
- NFT, short for non-fungible token, is a token that represents a unique, non-interchangeable asset registered on a blockchain.
- Unlike a currency or a stablecoin, where each unit is equivalent to another, each NFT is distinct and has its own identity.
- It is used to register ownership of digital or real-world items, although on-chain registration does not always guarantee rights off the network.
What is an NFT?
An NFT is a type of cryptographic token that represents something unique. The acronym stands for non-fungible token: while fungible assets are indistinguishable from one another, like two banknotes of the same value, each NFT carries its own identifier that sets it apart from all others. It is this uniqueness that allows it to be used to represent ownership of a specific item.
How it works
An NFT is issued by a smart contract that follows a specific standard, such as ERC-721 on networks compatible with the Ethereum virtual machine. This contract records who owns each unit and enables transfers, keeping the ownership history on the blockchain, public and verifiable.
Generally, the NFT points to a piece of content, such as an image or a file, whose data is often kept off the network for cost reasons. In other words, the token registers ownership and the authenticity of the reference, but the content itself may be hosted elsewhere. The quality of that hosting affects the durability of what the NFT represents.
Besides art and collectibles, the format can represent tickets, in-game items, and, in experiments, rights over real-world assets, always with the caveat that the legal effect depends on structures outside the blockchain.
Why it matters
The NFT introduced a standardized way to register ownership and authenticity of unique items on-chain. For businesses, the practical interest tends to lie less in speculation and more in using the format to represent rights, proofs, and verifiable items in an auditable way. On-chain registration provides transparency about origin and chain of ownership, which can reduce authenticity fraud in certain uses.
Risks and limitations
The NFT market is marked by low liquidity and highly volatile prices, and many projects lose value or are abandoned. If the referenced content is hosted off the network and disappears, the NFT may end up pointing to nothing. Ownership of the token also does not always equate to legal rights over the work or item.