Non-fungible tokens (NFTs) went from a niche experiment to headline news in 2021, when digital artworks sold for millions of dollars. The boom has since cooled sharply, but the technology is still used by artists, games, ticketing and brands. This guide explains what an NFT actually is, what buying one does and doesn't give you, what happened to the market, and the risks to understand before you create or buy one.
An NFT is a unique token on a blockchain that records who owns a particular item, usually a link to a digital file such as an image. Owning an NFT proves you hold that token; it does not by itself give you the copyright, and the file it points to may be stored elsewhere. After the 2021 boom, trading volumes and prices fell steeply, and many marketplaces made creator royalties optional. In India, NFTs are generally taxed as virtual digital assets, so check with a chartered accountant before you trade.
1. What "non-fungible" means
Something is fungible when every unit is interchangeable: one ₹100 note is as good as another, and one bitcoin is the same as any other bitcoin. Something is non-fungible when each unit is unique: a painting, a concert seat with a row and number, or a registered domain name.
An NFT is a token on a blockchain with its own unique ID. The blockchain records which wallet holds it and every transfer since it was created. Most NFTs follow one of two Ethereum standards, ERC-721 for one-of-a-kind items and ERC-1155 for items issued in editions, and similar standards exist on other chains such as Solana.
2. What you actually own
This is where most confusion comes from.
| Part | Where it usually lives | What owning the NFT gives you |
|---|---|---|
| The token | On the blockchain | Proof that your wallet holds this unique token |
| The metadata (name, description, file link) | Often off-chain, on IPFS or a web server | A pointer to the item; it may break if the host goes away |
| The image or media file | Off-chain in most cases | Nothing extra; anyone can still view or copy it |
| The copyright | With the creator, unless a licence says otherwise | Only the rights written in the project's licence |
In short, an NFT is a certificate of ownership of a token, not the artwork's copyright. Some projects grant holders a licence, for example to print or commercially use the image; many grant nothing beyond display. Read the licence before you pay.
If an NFT's metadata or image sits on an ordinary web server, the link breaks when that server shuts down, and the token then points to nothing. Files pinned on IPFS or stored fully on-chain last longer, but only if someone keeps hosting them.
3. How NFTs are created and sold
- Create a wallet.A crypto wallet holds your keys and signs transactions. Whoever holds the recovery phrase controls the wallet.
- Choose a chain and a marketplace.Ethereum, its Layer 2 networks and Solana are the most common; each marketplace supports certain chains.
- Mint the token.Minting writes the new token to the blockchain and links it to your file and metadata. It costs a network fee, which is far lower on Layer 2 networks than on Ethereum itself.
- List it for sale.Set a fixed price or an auction. The marketplace takes a fee on each sale.
- Transfer on sale.When someone buys, the token moves to their wallet and the payment, minus fees, moves to yours.
4. The 2021 boom and what came after
The best-known sale came in March 2021, when Beeple's digital collage Everydays: The First 5000 Days sold at Christie's for about $69 million. Early collectible projects such as CryptoPunks also sold individual items for millions of dollars that year, and virtual land in online worlds changed hands for large sums.
The boom did not last. From 2022, trading volumes and prices fell steeply, and a large share of collections now trade rarely or not at all. Two other changes matter for creators:
- Royalties became optional. Early NFTs promised artists a share of every resale. From 2022 to 2023, several major marketplaces stopped enforcing creator royalties, so resale income is no longer reliable.
- Energy concerns eased on Ethereum. Ethereum's move to proof of stake in 2022 cut its energy use by more than 99%, which answered the main environmental criticism of NFTs minted there.
NFTs are best seen today as a tool with specific uses, not as an investment that reliably rises in value.
5. Where NFTs are still used
Blockchain "domains" are not website domains
Some projects sell names such as yourname.eth as NFTs. These work inside crypto wallets and some apps, for example to receive payments to a readable name. They are not part of the internet's domain name system: ordinary browsers and email don't resolve them without extra software, and no registry or registrar stands behind them. For a website or business email address, you still need a registered domain such as .in or .com.
6. Risks to understand before you buy
- Scams and phishing. Fake mint sites, copied collections and "wallet drainer" links are common. Never share your recovery phrase, and check a collection's official links before you sign anything.
- Irreversible transactions. A transfer on a blockchain can't be reversed by a bank or a support desk. A mistake or a theft is usually permanent.
- Liquidity. Many NFTs can't be resold at any price. Buy only what you are happy to hold.
- Copyright disputes. Anyone can mint a token pointing to someone else's work. Check that the seller is the real creator.
- Tax. In India, NFTs are generally treated as virtual digital assets. Gains are taxed at a flat 30% (plus cess), losses can't be set off against other income, and 1% TDS applies to many transfers. This is general information, not tax advice; check with a chartered accountant.
7. Showcasing your work on your own website
Marketplaces come and go, and so do their rules. If you create digital art or run a collection, your own website on your own domain is the one place you fully control: your portfolio, the licence terms for holders, official links that fans can trust, and a contact form. Publishing your official links on your own domain also makes it harder for scammers to pass off copies.
8. Where Domain India fits
Domain India doesn't sell NFTs or crypto services. We provide the ordinary web presence around them: a registered domain, hosting for your site, and business email.
- Register a .in domain for ₹575 or a .com for ₹1,150 for the first year (Domain India list prices on 19 September 2026, excluding 18% GST) at domain registration.
- Build a portfolio site with the AI Website Builder, or host WordPress on our cPanel hosting.
The cards show live prices, excluding 18% GST.
- 1 website
- Connect your own domain + free SSL
- AI website generation
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- 25 GB NVMe SSD Storage
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For the technology behind NFTs, read understanding blockchain technology and its implementation.
Frequently asked questions
What is an NFT in simple words?
An NFT (non-fungible token) is a unique token on a blockchain that records who owns a particular item, usually a digital file such as an image. The blockchain keeps a public history of who has held it.
Does buying an NFT give me the copyright?
No, not by itself. The copyright stays with the creator unless the project's licence grants you rights. Many NFTs only let you display the image; read the licence before you buy.
Are NFTs still valuable in 2026?
Most are worth far less than at the 2021 peak, and many can't be resold at all. A small number of collections still trade. Treat NFTs as collectibles or utility tokens, not as a reliable investment.
Do NFT artists still earn royalties on resales?
Not reliably. Several major marketplaces made creator royalties optional in 2022 and 2023, so buyers can often avoid paying them. Some newer token standards and platforms try to enforce them.
How are NFTs taxed in India?
NFTs are generally treated as virtual digital assets. Gains are taxed at a flat 30% plus cess, losses can't be set off against other income, and 1% TDS applies to many transfers. Confirm your situation with a chartered accountant.
Can a .eth or other blockchain name replace my website domain?
No. Blockchain names work inside crypto wallets and some apps, but ordinary browsers and email don't use them without extra software. A website or business email still needs a registered domain such as .in or .com.
Ready to give your work a home you control? Register your domain, then build your portfolio with the AI Website Builder or cPanel hosting.
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