Non-Fungible Tokens (NFTs)

May 10, 2024 5:37:51 PM

What are Non-Fungible Tokens (NFTs)?

Non-fungible tokens (NFTs) are digital assets registered in a blockchain. Unlike fungible tokens like Bitcoin or Ethereum, each NFT is unique and cannot be mixed with another NFT. NFTs can represent digital or physical assets, including art, collectibles, real estate, and others.

NFT Divisibility

Despite not being divisible, NFTs can be fractionalized. This means that an NFT can be divided into smaller parts, each representing a fraction of the whole. For example, an NFT representing a piece of art can be fractionalized into 100 parts, each representing 1% of the art.

NFT Standards

NFTs are often created following a specific standard. This ensures that NFTs are compatible with different marketplaces and platforms. The most popular NFT standards are ERC-721, ERC-1155 and NEP-11. These standards define the rules for creating NFTs and how they can be transferred and managed.

Creation of new NFTs

NFts can be created in different ways. NFTs can be pre-minted, minted on demand, or minted through a bidding process. They can be generated by a smart contract or created by a user.