Non-fungible tokens (NFTs) have taken the crypto industry and world by storm this year. In 2021 alone, NFT marketplace, OpenSea, facilitated 12bn worth of NFT transactions — with many other platforms and marketplaces also seeing significant growth in their volumes.
NFTs allow you to buy, sell, trade and verify ownership of a digital item on the blockchain. The phrase “NFT” beat “cheugy” to be Collins Dictionary’s word of the year, and as per Collins, it is defined as: “a unique digital certificate, registered in a blockchain, that is used to record ownership of an asset such as an artwork or a collectible.”
An NFT can come in many shapes and sizes, varying from digital art, to songs, real-life artworks, collectibles in a video game and much more. Many outsiders that are new to the world of NFTs criticize them saying: “I just right-clicked saved this for free” or “This is just a JPEG”, but NFTs are far more than this, for they have created a way for artists to monetize digital versions of their content via the creation of ownership.
Usually, NFTs come in the form of an ERC-721 or ERC-1155 token on the Ethereum blockchain (other blockchains have different standards), for this is the chain that popularised the NFT trend.
Other blockchains, such as Solana, Avalanche and Tezos, have also seen a boom in NFT activity.
Read more about NFTs on CryptoCompare’s blog.