NFT is an abbreviation for non-fungible token. It's one the tokens that represents an ownership of rare digital goods such as digital artworks or collectibles.
In economics, fungibility is the property of a good or a commodity whose individual units are essentially interchangeable and each of whose parts is indistinguishable from another part
Example: Goods, currency
Non-fungible: VD: Original artwork
Attributes of NFT:
- Unique: Each NFT is unique and can't be replaced
- Indivisible: NFTs can't be separated into smaller parts with lower valuation. NFTs can't be traded as parts.
NFTs are minted through smart contracts, in which specifies some attributes of NFTs such as TokenID (unique), owner address and other attributes to help identify an NFT (graphic, image,...). NFT transactions are based on blockchain. Therefore, all the transaction histories of owners are transparency from the beginning to the end.
Although NFT can be created on any blockchain network that supports smart contracts, but the most common-used networks are erc-721 and ERC-1155 on Ethereum
- The ERC-721 non-fungible token standard is written in Solidity language on the Ethereum blockchain and it allows developers to tokenize ownership of any arbitrary data.
- ERC-1155, an improved standard beyond ERC-721, is another token standard on the Ethereum blockchain that facilitates the creation of both kinds of tokens, fungible and non-fungible. The goal is to create a smart contract interface that can represent both types.
Storage:
- NFT is stored on-chain, normally is the blockchain where that NFT first minted. NFT that minted on this blockchain network might not be transferable.
- NFT content (graphic, image,...) is stored off-chain. The data of this NFT will be saved at where the NFT is stored on any server, or IPFS.
- IPFS: (InterPlanetary File System): Decentralized, the data will be encoded and uploaded on other computers. This prevents the server to be disrupted and improves loading performance. It also enables data to be transferred from the current computer to the closest computer.
