A non-fungible token (NFT) is a unique and non-interchangeable unit of data recorded on a digital ledger that cannot be exchanged for another token (blockchain). Photographs, videos, audio, and other types of digital files that are easily replicable can be represented as unique items (analogous to a certificate of authenticity) using NFTs, which can then be verified and made public using blockchain technology to establish a verified and public proof of ownership. Copies of the original data are not confined to the owner of the NFT and may be copied and shared in the same way that any other file can be copied and shared. Because NFTs are not interchangeable (fungible), they differ from blockchain-based cryptocurrencies such as Bitcoin in this respect.
The first NFT project was released on the Ethereum blockchain in 2015, and interest in the technology has grown in tandem with the surge in popularity of cryptocurrencies. In the first quarter of 2021, according to NonFungible.com, sales surpassed $2 billion, representing a 20-fold increase over the previous quarter's total revenue. The use of NFTs to validate blockchain transactions has garnered criticism because of the high energy costs and carbon footprint involved with doing so.