A Non-fungible token (NFT) is a type of cryptographic token that represents something unique; non-fungible tokens are thus not mutually interchangeable. It is defined by the ERC-721 standard, which is a standard for creating NFTs on the Ethereum blockchain. This is in contrast to ERC-20 tokens, which are 1:1 exchangeable.

An analogy to highlight this difference is that an ERC-20 token is like a $20 bill, where the value of Sally's $20 bill is equivalent to the value of John's $20 bill. Think of an NFT as a collector's item, like a rare baseball card. Each card, or NFT, is unique and has different values based on the player, the year it was made, its condition, and other factors. When you buy a rare baseball card, you often get a certificate of authenticity and know the history of the card — who owned it, when it was sold, etc. The same applies to NFTs, but this information is recorded on the blockchain, making it transparent and impossible to forge. An NFT contains information on the token's provenance. The entire history of that NFT, including its creation and any subsequent transactions, is recorded on the blockchain, providing proof of authenticity and ownership.