What does an "NFT" represent?

An NFT, or non-fungible token, is a unique entry recorded on a blockchain that certifies who owns a specific digital item, such as an image, video clip, or in-game asset. "Non-fungible" means it cannot be swapped one-for-one with something identical, unlike a dollar bill or a coin, where any one unit is interchangeable with another of the same value. The blockchain record makes ownership traceable and hard to fake, even though the underlying image file itself can often still be copied freely.

It is not a new currency meant to replace cash, since NFTs represent ownership of a specific item rather than functioning as everyday money you'd use to buy groceries. It is also unrelated to passwords, which secure access to accounts rather than record ownership of anything.

Ironically, owning an NFT of an image usually does not stop anyone else from right-clicking and saving that same picture; what you actually own is the verified record of being the original holder, not exclusive control over the file.