NFTs, DAOs & Web3

How does an NFT work?

An NFT works by recording ownership of a unique token in a smart contract on a blockchain, with each token assigned an identifier that distinguishes it from every other. When you buy an NFT, the contract updates to show your wallet address as the owner, and that transfer is recorded publicly. The token typically points to metadata, such as an image or file, often stored off-chain or on a decentralized network. For example, buying a digital artwork transfers the token to your wallet while the artwork file stays hosted elsewhere.