What is an NFT?

What is an NFT?

From the earliest examples, engraved shells to the current crypto art craze, art has been a part of our society for millenia. Transcending age, race, and religion, everybody creates their own art forms at some point in their life. At the core of it is a love to create, to make something that is pleasing to the senses, it is a basic part of who we all are.

One of the biggest art movements currently is digital art, which has exploded in popularity due to the growth of the internet. People can now display, buy, and sell their art without being at the whim of gallery owners and traditional critics. What’s more, this new generation of artists can grow their brand and community on a much larger scale than ever – and they can do it for free.

Enter the NFT – Non-Fungible Token

Up until now the biggest downside of bringing digital artwork to the internet was that there was no real proof of ownership, or provenance, unless it was also owned in the physical world. However, with the advent of blockchain, the concept of provable ownership for digital items (items that are not physical, but entirely online) has become possible. The term for this provable ownership over digital goods is via something known as a Non-Fungible Token, or “NFT”.

To break it down, the Non-Fungible part of NFT means that something is not interchangeable and that it is unique, i.e. no other item is like it. The token part relates to the fact that NFTs are represented by a token that exists on a blockchain, like Ethereum. Due to the immutable nature of blockchains, when you control a token in your wallet, you can prove that you, and only you, own it. No one can move, copy, or take it without your permission.

The first NFT on Ethereum blockchain launched back in 2015, with a project called Terra Nulius, which allowed you to stamp a message on the blockchain. Later projects that launched include Etheria, Ethereum Name Service, Curio Cards, and the renowned CryptoPunks. This is an amazing timeline (and thread) from Leonidas.eth on the historical timeline of NFTs!

 

Early NFTs on Ethereum

As NFTs evolved, two primary ways to build them, or mint NFTs, were developed – ERC-1155, and ERC-721. While both are considered NFTs, they have two different use cases. Stackable items, which use ERC-1155, are able to be “unique” on their own, but can have other NFTs with the same properties. Examples of this, with the example shown below from Runescape, could be runes, or even GP (gold pieces). Some of the more unique items, which aren’t stackable, and are completely unique, generally use the ERC-721 standard. No other item is like it. It’s like your fingerprint- you can’t have two of the same one. It’s impossible!

 

ERC-1155 vs ERC-721

Similar to what happens in most games, you can have items in your account, and it would be no different when using NFTs in a game!

Beyond Art

The use cases for NFTs are huge. As NFTs are a proof of provenance and not just the art itself*, they can actually be used to represent the ownership of any digital item including art, tickets, credential verification, gaming items, among pretty much any digital item you can think of. They can even be used to prove ownership of items in the physical world, and have even been used in real estate transactions.

The possibilities are huge.

Showing off your NFTs

If you own NFTs, and are looking for one of the leading noncustodial wallets to help manage them, you can download Numio for free, and begin to securely store your Ethereum NFTs (soon supporting NFTs on L2s!), available on iOS & Android.

*some NFTs are entirely on-chain but that is outside of the scope of this post.

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