Everything, explained properly.

NFT stands for non-fungible token. It’s a unique entry in a public database saying a particular address controls a particular item. That’s the whole idea. Everything else, the art, the prices, the community, sits on top of that one fact, and most confusion comes from mistaking the layers for the foundation.

Dollar volume collapsed. Unit sales hit records. Both are true, which is why this question usually gets answered badly. NFT trading fell 37% in 2025 to about $5.5 billion while the number of NFTs sold rose to a record, so the market didn’t empty out so much as get cheap.

When people say NFT they usually picture one of about a dozen collections. The monkey ones are Bored Ape Yacht Club, and they’re apes rather than monkeys. The pixel faces are CryptoPunks. Here’s what each collection is, who made it, and what happened to it after 2021.

The record is $91.8 million, for a Pak piece called The Merge, though nearly 29,000 people bought it between them. Below that sit Beeple’s $69.3 million Everydays and a run of CryptoPunks. Every one of these headlines carries a caveat, and most of the caveats went unreported.

Speculative NFT interest collapsed, but searches for NFT utility and gaming rose. The activity that survived is narrower and less glamorous: tickets, in-game items, credentials and authenticated goods — cases where the token does a job rather than being the product.

Buying an NFT takes about forty-five minutes the first time, and roughly two of those minutes carry all the risk. This walks through the whole process, wallet, funding, verification, purchase, with particular attention to the handful of steps where people actually lose money.

Minting your own NFT costs a few cents on a modern network and takes about an hour the first time. This covers preparing the work, choosing a chain and a minting route, getting the metadata and storage right so the piece survives, and what actually happens after it exists.

Almost nobody loses NFTs to hacking. They lose them by signing something, or by putting their recovery phrase somewhere it could be read. This covers what you’re actually protecting, the wallet setup that makes theft hard, and the approval audit almost nobody performs.

Knowing that scams exist doesn’t protect you. Knowing the mechanism does. This walks through the main ways people lose NFTs and money — what the attacker is actually doing at each step, and the specific signal that gives it away before you sign anything.

Creator royalties were the most compelling promise NFTs made to artists: a cut of every future resale, automatically. The mechanism was never enforced by the blockchain, marketplaces made it optional, and a large share of secondary volume now pays creators nothing. Here is what happened and what remains.

Most NFT tax confusion comes from one under-appreciated fact: paying for something with cryptocurrency is itself a disposal of that cryptocurrency. This covers what triggers tax, how cost basis works, why holding period is the biggest lever you control, and the records to keep from day one.

Web3 names an idea: applications built on shared infrastructure nobody owns, where users hold their own accounts and assets. Some of that shipped. A lot of it didn’t. This separates the mechanism that works from the promises that were oversold, without doing either side’s public relations.

A smart contract is a program that lives on a blockchain and runs identically for everyone, with results nobody can alter afterwards. That’s useful and dangerous in equal measure, because a bug is permanent, and the code can’t know anything about the world outside the chain.