> For the complete documentation index, see [llms.txt](https://www.digitalnations.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://www.digitalnations.xyz/web3-overview/the-web3-ecosystem/nfts/how-do-nfts-work.md).

# How do NFTs work?

One of the easiest ways to visualize an NFT is as a digital “record of ownership”.  In many ways it’s like an artwork’s certificate of authenticity, a car’s title or the deed to a house. 

Instead of a physical piece of paper you can hold, however, this “certificate” is recorded on a blockchain, where it is linked to your digital address.  This not only guarantees the legitimacy of the asset, but also proves that you own it. 

<figure><img src="https://1848510576-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FAmJeQPCkTT9u0UZ8OI4U%2Fuploads%2FCUmdMXccKJDAvWgpwsgL%2FNFT.jpg?alt=media&amp;token=41e18d45-7a73-4796-be1f-a325cd6c2f6d" alt=""><figcaption></figcaption></figure>

Contrary to popular belief, most NFTs don’t actually host the underlying asset (art, music, etc…) on a blockchain, as this would be extremely expensive (i.e. storing even a modest picture could cost thousands of dollars).  Instead, the assets themselves are generally stored a separate server, and the NFT contains a link that *points* to the address of this database (or, as one expert [said](https://mashable.com/article/what-is-an-nft-non-fungible-token), an NFT is like “directions to the museum”).&#x20;

To understand how NFTs work, it’s helpful to understand three concepts:  1) what is a token? 2) what makes a token “non-fungible”? and 3) what is a smart contract platform?