What are NFTs
NFT stands for Non-Fungible Token — this is in contrast to a “fungible token” like Bitcoin where any two Bitcoins are essentially the same — each NFT is “unique”. Think of Bitcoin as the first wave of the blockchain, which was simple and just tracked numbers — this kicked off a series of “tokens” or cryptocurrencies, and this space you may have heard called DeFi, or decentralized finance. NFTs are the next wave, where instead of “money”, we’re exchanging “art”.
NFTs are enabled by an evolution in the blockchain called smart contracts, that can store data — such as images. The most popular chain enabling smart contracts is the Ethereum chain, and the currency on the chain is Ether. While smart contracts can be used for a variety of things, the ERC-721 is the most popular today — a contract used to track ownership of a digital asset — used in most NFT projects today. The other popular contract type is the ERC-1151 which allows for multiple of the same object (imagine a common item type in a game).