What Are Ethereum NFTs?

Understanding NFTs

Non-fungible tokens (NFTs) are blockchain-based digital assets that certify uniqueness, making them valuable for collecting, verifying ownership (e.g., real-world assets), and enhancing experiences like online gaming.

Unlike cryptocurrencies such as Bitcoin, which are fungible (each unit is interchangeable), NFTs are one-of-a-kind. For example:

• Swapping 0.1 BTC with a friend doesn’t change value.
• Swapping an NFT (e.g., a CryptoPunk) would, as each has distinct traits and rarity.

Early NFT Concepts

Though popularized on Ethereum, NFTs originated on Bitcoin:

• Colored Coins (2012): Digital watermarks tracking off-chain assets (e.g., gold).
• Counterparty (2014): Enabled Bitcoin-based tokens for games like Spells of Genesis (first tokenized card: March 2015).

👉 Explore Bitcoin’s role in NFT evolution

First NFTs on Ethereum

CryptoPunks (June 2017) marked Ethereum’s NFT debut:

• Collection: 10,000 unique 8-bit avatars.
• Innovation: Introduced profile picture (PFP) format—later adopted by projects like Bored Ape Yacht Club.
• Distribution: Free minting (users paid only gas fees).

Key Breakthroughs

• ERC-20 Standard: Initially used for CryptoPunks (designed for fungible tokens).

• ERC-721 (2018): First dedicated NFT standard, enabling:

  • Unique token IDs.
  • Secure transfers.
  • Metadata storage (e.g., images).

CryptoKitties (2017): Beta-tested ERC-721, showcasing NFT utility in gaming ("breeding" digital cats).

👉 Discover top NFT games today

Ethereum NFT Standards

| Standard | Use Case | Key Feature |
|-----------|-----------------------------|----------------------------------|
| ERC-721 | Unique assets (art, PFPs) | Indivisible, one-of-a-kind |
| ERC-1155 | Semi-fungible tokens (games) | Single contract for multiple NFTs|

ERC-1155 Advantages:

• Supports batch transfers.
• Ideal for gaming items (e.g., skins in Axie Infinity).

Popular Ethereum NFT Projects

1. Bored Ape Yacht Club (BAYC):

   • 10,000 high-res ape PFPs.
   • Expanded ecosystem: ApeCoin, metaverse plans.

2. Ethereum Name Service (ENS):

   • Converts wallet addresses to name.eth (e.g., vitalik.eth).

3. Decentraland:

   • Virtual land (LAND) and wearables as NFTs.

4. Art Blocks:

   • Generative art collections (e.g., Squiggles).

5. Axie Infinity:

   • NFT-based monsters on Ronin sidechain.

FAQs

Q: Can NFTs be copied?
A: Yes—but blockchain verifies the original owner (like autographed prints).

Q: Are NFTs only art?
A: No! They represent music, tickets, virtual land, and even legal contracts.

Q: Why use Ethereum for NFTs?
A: Early standards (ERC-721) and developer support made it the go-to chain.

Key Takeaways

• CryptoPunks pioneered Ethereum NFTs.
• ERC-721/1155 standards power diverse use cases.
• NFTs span art, gaming, and identity (e.g., ENS).

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