TECHNOLOGIES

NFT

Non-Fungible Token

A unique, transferable token on a blockchain that points to a specific thing: ownership of an asset, an access right, or a record. Often a JPEG, sometimes useful.

Last reviewed: byKevin Riedl wiki ↗

An NFT is a smart-contract token standard (ERC-721 on Ethereum is the common one) for assets that are not interchangeable. A dollar is fungible: any dollar is as good as another. A deed to a specific house is not. An NFT is the on-chain equivalent of that deed: a unique entry tied to one owner address, transferable, and verifiable by anyone. What the token actually represents is a design decision, and most of the value question hinges on getting that decision right.

The honest distinction is between utility and speculation. Real utility: tokenised ownership of a real-world asset (RWA), an access right that gates a service or event, a membership credential, or an in-game item the player genuinely controls. In these cases the NFT is doing a job a database row cannot, because the owner can transfer or sell it permissionlessly and it survives the issuer. We built NFT-backed mechanics for LivLive, where the token gates real-world experiences rather than serving as a collectible.

A detail that quietly breaks naive NFT projects: the token on-chain is usually just a pointer, and what it points to often lives on a normal web server. If that server goes down or the company stops paying for it, the “permanent” NFT now points at nothing, a broken-image link backed by a blockchain. Projects that take the ownership claim seriously store the referenced asset on content-addressed storage like IPFS or on-chain directly, so the thing the token represents survives as long as the token does. If a vendor cannot tell you where the actual asset lives and who keeps it alive, the permanence is marketing.

The speculation case is most of the market: a token pointing to a JPEG whose only value is the next buyer paying more. There is nothing technically wrong with it, but it is a collectibles market with blockchain settlement, not a productivity tool. If a vendor pitches NFTs for your business, the question is always the same: what does the token let the holder do that a database cannot, and does that ownership need to survive your company? Our blockchain work starts there.

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FAQs

A unique, transferable token on a blockchain, tied to one owner address. The token standard (commonly ERC-721) handles ownership and transfer; what the token represents (an asset, an access right, a JPEG) is a design choice the issuer makes.
Utility means the token does a job a database row cannot: permissionless transfer, owner control, and survival beyond the issuer (tokenised real-world assets, access rights, in-game items). Speculation means the only value is the next buyer paying more. Most of the public market is the latter.
Only if the token lets the holder do something a database cannot, and that ownership needs to outlive your company. If a database row would serve the same purpose, use the database. NFTs add cost, complexity, and a public attack surface you have to justify.