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What is an NFT?

NFT stands for “non-fungible token”. Ok, but what does that mean? It means that there is a record on the blockchain that this asset is assigned to you. As long as you hold the NFT in your wallet, the asset (image) associated with that NFT is yours. That NFT is unique, a one of a kind digital asset. Just like you and me, there are no two of alike. NFTs may share the same similarities and traits, but each one is different. Note that some NFT's are a "Series", meaning that the asset the NFT represents is in a series of the same item, like (1 of 500), but the NFT you hold in your wallet represents one of those series individually.
Specifically "non-fungible" means it cannot be equally traded with another NFT at the same value. Each NFT has its own value. A "fungible" token like Bitcoin all are of equal value.
The fact that these NFT tokens are unique entries that are stored on the blockchain makes them not only permanent, but also immutable. The blockchain registers each owner and transaction, providing ownership rights and allowing a history record if the NFT is bought, sold, or transferred to someone else.
But isn't it just a JPEG?
What sets apart NFTs from a JPEG is the blockchain. NFTs are recorded on the blockchain. Every transaction is recorded, which means no one can dispute your claim of ownership.
This key point is why NFTs are sought after and why they have many applications beyond just the art. Anyone can screenshot an image that an NFT represents, but only the holder of the NFT can stake claim to it and prove that he/she owns it through the power of digital ownership.
Web3 Applications have the ability to use NFTs as unique identifiers for online credentials. We have already witnessed Coachella sell out their NFT collection, where the holder can redeem it for art prints or to access every concert for life. As long as the owner holds the NFT they retain the rights & access to these events. Once sold, the transfer of ownership is logged on the blockchain and the new owner receives these benefits.
This is only the start; real use applications are endless and only limited by your imagination and creativity.