NFTs explained in 2026: what they are and what's left of the hype
What NFTs are, how they work, where they're still used today in art, games, tickets and memberships, the risks and scams, and how NFTs are taxed in India.
- Checked against the rules: Nov 2026
- Sources cited · No buy or sell calls
What an NFT is
NFT stands for non-fungible token. Unlike Bitcoin, where every coin is the same, each NFT is unique. It records on a blockchain who owns a specific item: an artwork, a game character, a ticket or a membership pass.
Owning an NFT usually means owning the token, not the copyright to the image. The image itself is often stored on a separate server or network.
What happened to the hype
In 2021 and 2022, some collections sold for very high prices. Trading volume and prices for most collections then fell steeply, and many projects were abandoned. A small number of collections and artists kept dedicated communities.
Where NFTs are still used
- Digital art and collectibles
- Game items that players can own and trade
- Tickets and passes for events and memberships
- Onchain names and identity, such as wallet names
- Proofs of attendance for events and courses
Risks
- Illiquidity: many NFTs can't be sold at any price.
- Fakes: copied collections with similar names. Check the official contract.
- Malicious NFTs: unexpected NFTs in your wallet can link to drainer sites. Hide them. Phishing and fake apps.
- Approvals: marketplaces ask for permissions; revoke the ones you don't use.
Tax in India
NFTs count as virtual digital assets. Gains on selling are taxed at 30% plus cess, with 1% TDS rules applying to transfers above the threshold. NFTs received as gifts or rewards may also be taxable. Crypto tax in India.
Sources
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