NFTs Explained: What Are They and Are They Still Relevant?

What is an NFT?

NFT stands for “non-fungible token,” a unique digital asset that represents ownership of something distinctive in the digital world (for example, a piece of graphic art, a photo, or even the first-ever tweet). All NFTs are verified through blockchain technology, functioning as digital certificates of authenticity.

The meaning of “non-fungible” is that the item is one of a kind and can’t be exchanged for something identical. It’s like owning an original painting — even if you trade it for an exact replica, you’re not getting the same value in return. This differs from something fungible, like a $10 bill, which can be exchanged for another $10 bill with no change in value.

Each NFT includes metadata about its creation and ownership history, securely stored on a blockchain. This enables verification of its authenticity and unique origin. The key appeal of an NFT is its digital uniqueness — owning one means you hold a one-of-a-kind, non-replicable asset. Unfortunately, this is the basis for many common NFT scams, which we’ll get into later in the article.

How do NFTs work?

NFTs use blockchain technology to create verifiable, one-of-a-kind digital assets. The process begins with a smart contract on a blockchain platform (such as Ethereum), which generates a unique token ID and records the NFT's creation. Once minted, the NFT can be bought, sold, or traded, with each transaction recorded on the blockchain. This ensures secure, transparent ownership transfers without the need for intermediaries.

Here’s a closer look at how NFTs work:

• Blockchain foundation: NFTs are created and managed on blockchain networks, although not all blockchains support NFTs. The blockchain acts as a decentralized ledger, recording every transaction and ensuring transparency between buyers and sellers. Without this foundation, NFTs couldn’t exist or be traded.

• NFT minting and tokenization: To create an NFT, a digital asset (like artwork, music, or a video) is "minted" into an NFT. This process assigns it a unique identifier linked to metadata that provides key details about the asset, like its creator and creation date. While the metadata is stored on the blockchain, the asset itself is typically stored off-chain.

• Smart contracts: So-called “smart contracts” are embedded into NFTs during creation. These self-executing programs automatically enforce the terms of a transaction when set conditions are met. For example, an artist might include a smart contract clause to receive royalties from each resale of their NFT. These digital contracts remove the need for third-party enforcement.

• NFT trading: Once minted, NFTs can be bought, sold, or traded through specialized marketplaces using cryptocurrency. Each transaction is recorded on the blockchain, creating a tamper-proof chain of ownership.

• Proof of ownership and authenticity: The blockchain’s ledger stores the NFT’s metadata, proving its authenticity and ownership. While the digital file associated with an NFT can still be copied or shared, the NFT itself is unique and cannot be faked. Every transfer is publicly recorded, making the ownership trail easily verifiable.

An example of an NFT in the form of a valuable painting with a certificate.

Are NFTs still a thing?

The short answer? Not really. The days of sky-high NFT sales and media hype seem to be over, with NFT trading dropping by more than 90% since its peak in 2021. Now, a few years on from peak NFT trading season, around 95% of NFT collections are worthless.

While NFT trading is no longer a speculative gold rush, the culture continues to thrive. As one Reddit user put it, “What’s left behind is a higher concentration of people with collector mentalities, art aficionados, NFT lifestyle kids, and people seeking socials and content to make their day-to-day a bit more fun.”

For many artists, NFTs still offer a sense of empowerment, with decentralization allowing them to distribute their work independently, without relying on traditional gatekeepers like galleries, auction houses, or major collectors.

So, if you’re a known artist in the space, you know how to build relationships, and you create high-quality work, you may have a better chance of selling your NFTs even today — they just may not have the high investment potential they once did.

NFT examples and applications

Digital artists and creators continue to see value in NFTs as a way to retain ownership and monetize their work. In fact, the fading hype may be healthier for the evolution of meaningful, legitimate applications of NFT technology. Companies are still actively exploring their potential across industries like gaming, ticketing, and membership verification, where secure, verifiable digital ownership can offer real utility.

Here are some common NFT examples being used and explored today:

• Digital art: As the most well-known use for NFTs, digital art remains a thriving category for artists looking to sell work with built-in ownership certificates. Although scams have historically plagued this space, some committed NFT artists may still find success.

• Collectibles: Profile pictures and small digital collectibles, like the CryptoPunk series, a collection of punky-looking avatars, are still bought and sold daily. For example, CryptoPunk 4589 was sold in early June 2025 for almost $400,000 worth of Ethereum.

• Gaming: Some games integrate NFTs to allow ownership of assets like characters, equipment, or even in-game plots of land. For example, Doctor Who: Worlds Apart lets players build a deck of collectible playing cards (in the form of NFTs), then play with the characters, strategizing with their special abilities.

• Events: Some event organizers still use NFTs in ticketing to enhance ticket security, prevent counterfeiting, and enhance event-goer experiences. Coachella used NFT-based VIP tickets for the 2024 festival.

• Virtual real estate: Virtual social worlds like Decentraland enable users to buy and sell virtual land and other items as NFTs. Decentraland also lets users customize their avatars, traverse an open world full of user-generated landscapes and structures, and attend live events.

Common NFT scams

The unregulated and often anonymous nature of the NFT space has made it fertile ground for scammers. Here are the most common scams plaguing NFT enthusiasts, along with advice on how to avoid them:

Phishing attacks

Scammers launch phishing attacks in the form of fake emails, messages, and airdrops that appear to be from trusted NFT platforms and promise “free” giveaways. Their goal? To steal your wallet credentials.

Pump-and-dump schemes

Scammers artificially inflate the value of NFTs using false hype or celebrity endorsements, then cash out, leaving others with worthless assets.

Rug Pulls

Developers promise innovation through NFT projects and collect funds via pre-sales, only to vanish with the money without developing anything. Notable cases like the Evil Ape rug pull have left many wary.

Counterfeit NFTs

Some minted NFTs are outright plagiarized — stolen from original creators without permission. Platforms like OpenSea have reported that around 80% of minted NFTs are fake or copied, highlighting a major issue with authenticity and misuse in the NFT space.

Are NFTs investments or risks?

With only 0.2% of NFT drops proving profitable for investors in 2024, buying NFTs as a financial investment has become increasingly risky. However, if you’re drawn to the niche art, music, or communities surrounding NFT technology, the value may go beyond financial profit. For many, purchasing NFTs remains a way to support creators and engage with a digital culture they care about.

Is an NFT different from cryptocurrency?

NFTs and cryptocurrencies are different, though both are based on blockchain technology. Cryptocurrencies like Bitcoin or Ethereum are fungible digital currencies designed as transactional units of exchange. NFTs, on the other hand, represent unique digital assets such as artwork, music, or virtual real estate, and provide verifiable ownership and authenticity.

Here’s a detailed comparison of NFTs vs cryptocurrency:

Stay safer online with AVG

Safeguarding your digital assets from online threats is more important than ever. AVG Free Antivirus offers powerful real-time protection against viruses, malware, and unsafe downloads — along with advanced shields that help block phishing scams and malicious links. Install it for free today to boost your security and enjoy greater peace of mind.