A non-fungible (meaning unique, non-replaceable) token (NFT) is a unique digital code that represents some kind of digital item. It could be digital art or music, for example. An NFT is secured and stored on a public blockchain. One token is not interchangeable for another, and a token cannot be further divided.
There are many different types of non-fungible tokens, and they can be created on well-known blockchains like Bitcoin and Ethereum.
What you’ll need to get started with NFTs
Whether you simply want to dabble around NFT marketplaces or plan to code, compile, and deploy a customized NFT smart contract of your own, you’ll need two key items:
- A MetaMask wallet, which you can download at https://metamask.io
- Ether, the “currency” you’ll need to make transactions. You can obtain Ether from popular crypto-exchanges such as Coinbase, accessed at https://www.coinbase.com
10 NFT marketplaces
To get an idea of the NFT landscape, check out the following marketplaces:
- OpenSea (https://opensea.io/), the first and largest peer-to-peer platform for crypto-collectibles
- Axie Marketplace (https://marketplace.axieinfinity.com/), where Axie Infinity game assets can be bought and sold
- CryptoPunks Marketplace (www.larvalabs.com/cryptopunks/forsale), where unique 24-x-24 pixelated punks are listed for sale
- NBA Top Shot (https://nbatopshot.com/), a marketplace for officially licensed NBA moments
- Rarible (https://rarible.com/), a marketplace that allows you to quickly create and list your own NFTs
- SuperRare (https://superrare.com/), a selective marketplace where artists must be invited to list
- Alcor (https://alcor.exchange/nft-market), a decentralized exchange where NFTs can be bought and sold
- Binance NFT Marketplace (www.binance.com/en/nft/), a general NFT marketplace operating on the Binance Smart Chain (but also supports NFTs on the Ethereum network)
- Foundation (https://foundation.app/), a platform where creators can mint and auction their digital artworks
- Crypto.com NFT (https://crypto.com/nft/marketplace), an NFT auction site that allows you to list existing NFTs or mint new ones to list
Popular NFT use cases
Use cases for NFTs abound, and the creator economy has rapidly embraced this method of securing digital provenance. Here are some popular examples:
- Digital art: This category has enjoyed some of the highest selling prices and also represents the first NFT use case, which can be traced back to Kevin McCoy’s “Quantum” (minted in 2014). Many platforms now exist to allow anyone to mint an NFT of their digital art.
- Sports collectibles: Collectibles as NFTs represent the digital analogue of, say, traditional baseball cards and other sports memorabilia. NBA Top Shot, a platform for officially licensed and NFTized NBA collectibles, has enabled millions of dollars of sales and engendered a new generation of enthusiasts.
- Game assets. In-game assets (such as digital land, skins, and characters) are a perfect match for NFTs, having the highest sales volume of any other segment under the umbrella of digital collectibles.
- Music. Artists can now tokenize their music for direct distribution to fans. In many cases, fans can receive exclusive content and artwork that can’t be found anywhere else. In February of 2021, DJ and producer 3LAU famously sold $12 million of NFTs. The offerings included a custom song, access to never-before-heard music, custom artwork, and new versions of existing songs.
- Memes. Old popular memes, such as Disaster Girl, Nylon Cat, and Overly Attached Girlfriend, have now been NFTized and sold for hundreds of thousands of dollars.
Common NFT minting standards
Most NFTs are created on the Ethereum blockchain based on widely accepted token standards to enhance composability and interoperability.
- The ERC-721 standard is the original and most commonly used non-fungible token standard. Each NFT created with this token standard can be priced independently.
- ERC-998 tokens allow developers to specify complex positions and trade rules using a single transfer of ownership. They can bundle several NFTS and fungible tokens like the ERC-20 in a single contract. You might think of an ERC-998 token contract as a portfolio of assets or as a holding company for digital assets.
- ERC-1155 tokens allow for users to register fungible (ERC-20) and non-fungible (ERC-721) tokens using the same address and smart contract. This token standard was developed with games in mind, where fungible tokens could represent a transactional currency in a game, and the non-fungible items could represent in-game collectibles and in-game exchangeable assets.
NFTs are also being minted on other popular blockchains, such as Solana and Flow. NFTs have even been created on the Bitcoin blockchain in the form of colored coins, which have been used for many interesting applications — such as transferring property and issuing shares, coupons, and digital collectibles.
Deploying an NFT smart contract, in a nutshell
Follow these steps to deploy your own ERC-721 token contract on Ethereum:
- Log in to your MetaMask wallet by clicking on the Fox icon in your browser’s toolbar. Make sure you’ve selected the correct account and network (only use Ethereum Mainnet when you’re ready to spend actual ETH to deploy your contract).
- Point your browser to: http://remix.ethereum.org. Be certain to type in “http” and not “https.”
- Create and name a new file for your Solidity code.
- Open this new file, and copy/paste the sample code provided at https://www.seoyoungkim.com/nftfdcode.html
- Navigate to the Solidity Compiler browser pane and compile your code.
- Navigate to the Deploy & Run Transactions browser pane and select Injected Web3 from the Environment dropdown menu.
- Make sure you’re now connected to the appropriate network and account and deploy your compiled contract.