NFTs for beginners

What is a non-fungible token (NFT)? Tokens known as non-fungible tokens or NFTs are cryptographic assets with unique identification codes and meta data that distinguish them from one another.

NFTs for beginners

 What is an NFT? 

An NFT (non-fungible token) represents some type of digital item that is unique and non-replaceable. A digital piece of music or art could, for example, be an NFT. A public blockchain secures and stores NFTs. A token cannot be exchanged for another, nor can it be further divided.

A wide variety of non-fungible tokens are available and can be created on well-known blockchains like Bitcoin or Ethereum.

What you need to get started with NFTs

It doesn't matter whether you simply want to explore NFT marketplaces or plan to develop, compile, and deploy your very own NFT smart contract, you’ll need two key items:

  • A MetaMask wallet, which you can download at https://metamask.io
  • Ethereum is the "currency" you'll need to make transactions. Ether can be acquired from popular crypto exchanges such as Crypto.com, which can be accessed at https://www.crypto.com/.

NFT marketplaces

NFT use cases

Here are a couple popular examples of NFTs in the creator economy. NFTs are becoming increasingly popular for securing digital provenance.

  • Digital art

    Many platforms now exist to enable anyone to mint an NFT of their digital art, representing one of the highest-selling categories with some of the highest prices. The first NFT was created in 2014 by Kevin McCoy's "Quantum".
  • Sports collectibles

    NBA Top Shot has enabled millions of dollars of sales and engendered a whole new generation of collectors by offering officially licensed and NFTized NBA collectibles.
  • Game assets

    Digital land and character skins, as well as in-game assets, combine to make up the highest sales volumes of any digital collectible.
  • Music

     In February of 2021, DJ and producer 3LAU sold $12 million of NFTs. Tokenized music has allowed artists to distribute music directly to fans. They sometimes receive exclusive content and art that isn't available anywhere else. Custom songs, new versions of existing songs, and access to never-before-released music were part of the offer.
  • Memes

     Some of the most popular memes, such as Disaster Girl, Nylon Cat, and Overly Attached Girlfriend, have been NFTized and sold for hundreds of thousands of dollars.

NFT minting standards

For interoperability and composability, NFTs are typically built on the Ethereum blockchain-based on widely accepted token standards.

  • A non-fungible token created using the ERC-721 standard can be priced independently. This is the original and most widely used standard for non-fungible tokens.
  • Tokens based on the ERC-998 specification enable developers to specify complex trade rules and positions with just one transfer of ownership. Developers can bundle several ERC-20 tokens and NFTS tokens in one contract. As a holding company for digital assets, you can think of an ERC-998 token contract as a portfolio of assets.
  • Users can create fungible (ERC-20) and non-fungible (ERC-721) tokens with an ERC-1155 token by using the same address and smart contract. Games were considered when developing the standard since fungible tokens could represent a transactional currency in-game, while non-fungible items could represent collectibles in-game and exchangeable assets in-game.

As well as Bitcoin, NFTs have been created on other blockchains, such as Solana and Flow. We even have colored coins on the Bitcoin blockchain that can be used for many interesting purposes, including transferring property and issuing shares.

How to deploy an NFT smart contract

You can deploy your own ERC-721 token contract on Ethereum by following these steps:

  • If you wish to deploy your contract with actual ETH, you should use the Ethereum Mainnet when you are ready to spend actual ETH. Log in to your MetaMask wallet by clicking on the Fox icon in your browser's toolbar.
  • Point/Use the following address in your browser: http://remix.ethereum.org. Be sure to type in "http" and not "https."
  • For your Solidity code, you should create a new file.
  • To get the sample code, open this new file and copy/paste the code provided at https://www.seoyoungkim.com/nftfdcode.html
  • You can compile your code by going to the Solidity Compiler browser page.
  • From the Environment dropdown list, select Injected Web3 from the Deploy & Run Transactions browser pane.
  • Verify that you are connected to the appropriate network and account and deploy your compile contract.

The article is from the book: NFTs For Dummies

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