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:

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.

About This Article

This article is from the book:

About the book authors:

Tiana Laurence is a blockchain pioneer, investor, and serial entrepreneur. She cofounded Factom, Inc., a software company that builds technology within the blockchain space. She's a columnist for TechTarget, in which she focuses on blockchain and the Internet of Things (IoT), and she's managing partner of Laurence Ventures, a firm investing in technology initiatives.

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