> For the complete documentation index, see [llms.txt](https://omnihub-launchpad.gitbook.io/omnihub/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://omnihub-launchpad.gitbook.io/omnihub/introduction/what-is-an-nft.md).

# What Is an NFT?

### **Introduction to NFTs**

Non-Fungible Tokens (NFTs) are unique digital assets that exist on a blockchain, representing ownership of specific items or content. Unlike cryptocurrencies such as Bitcoin or Ethereum which are fungible and can be exchanged on a one-to-one basis each NFT is distinct and cannot be replicated or replaced with another token.

***

### **Understanding Fungibility**

* Fungible Assets: Items that are interchangeable because they are identical in value and properties. For example, one Bitcoin is equal to another Bitcoin.
* Non-Fungible Assets: Unique items with individual characteristics and value. Examples include artwork, real estate, and collectibles.

***

### **How NFT Technology Operates**

NFTs leverage blockchain technology to provide a secure and transparent method of establishing ownership and authenticity of digital assets. Here's how they work:

1. Creation: Artists or creators create NFTs by encoding their digital assets onto a blockchain, such as Ethereum.
2. Blockchain Ownership: Each NFT has a unique identifier and metadata that cannot be altered, ensuring the asset's originality.
3. Smart Contracts: NFTs utilize smart contracts to define the ownership and transferability of the digital asset.
4. Trading and Transfer: NFTs can be bought, sold, or traded on an NFT marketplace, with each transaction recorded on the blockchain.