NFTs (Non-Fungible Tokens) are closely associated with Ethereum because the vast majority of NFTs are built on the Ethereum blockchain.
In this post, we’ll learn about NFTs and Ethereum, how they are connected, and other things you need to know.
Ethereum (ETH) & Non-Fungible Tokens (NFTS)
Ethereum is a decentralized blockchain platform that allows developers to create and deploy smart contracts, which are self-executing contracts with the terms directly written into code. NFTs are one of the significant use cases of smart contracts on the Ethereum platform.
How NFTs are connected to Ethereum
1. Smart Contract Functionality: NFTs are unique digital assets represented as tokens on the blockchain. Each NFT has a distinct value and cannot be exchanged on a one-to-one basis with other tokens, unlike cryptocurrencies like Bitcoin or Ethereum (which are fungible tokens). The creation, ownership, and transfer of NFTs are facilitated by smart contracts on the Ethereum blockchain.
2. ERC-721 Standard: The most common standard for NFTs on Ethereum is ERC-721 (Ethereum Request for Comments 721). It is a standard interface that defines how NFTs should be created, owned, and transferred. ERC-721 smart contracts provide the necessary functionality to ensure the uniqueness and indivisibility of NFTs.
3. NFT Marketplaces: Ethereum-based NFTs are bought, sold, and traded on various NFT marketplaces, many of which are built on top of Ethereum. These marketplaces facilitate the discovery and exchange of NFTs among collectors, artists, and enthusiasts.
4. Interoperability: The Ethereum blockchain’s widespread adoption and developer community make it a popular choice for creating NFTs. Additionally, because most NFTs are based on the ERC-721 standard, they are often interoperable across different platforms, wallets, and marketplaces that support the standard.
5. Security and Decentralization: Ethereum’s security and decentralized nature provide a robust foundation for NFTs. Once an NFT is minted (created) on the Ethereum blockchain, it is securely stored and immutably recorded, making it tamper-proof and resistant to censorship.
Closing Thoughts
Due to its support for smart contracts and the ERC-721 standard, Ethereum has become the primary blockchain for the creation and exchange of NFTs.
However, it’s worth noting that other blockchain platforms have also developed their own NFT standards and ecosystems, creating a competitive landscape in the NFT space. Nonetheless, Ethereum remains a dominant force in the world of NFTs, driving much of the innovation and activity in this space.
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