The NFT craze is sweeping the digital world, but have you ever wondered what Ethereum has to do with it? It turns out that Ethereum is actually the leading blockchain for NFTs and there’s a good reason why.
But first, let’s go back to basics. NFTs, or non-fungible tokens, are unique digital tokens that cannot be exchanged for other tokens like traditional currencies. They are often used for digital art collectibles, audio and video files, gaming items, and event tickets, among others. The first digital collectibles actually predate the term “NFT” and used special smart contracts to store these unique digital tokens.
Now, back to Ethereum. While Bitcoin is the original blockchain, it does not easily allow for anything other than bitcoin to be transacted on its blockchain. This made Ethereum a prime alternative for those who wanted to expand the possibilities of blockchain-based tokens. In 2017, CryptoKitties was launched on Ethereum as the first NFT collection to use Ethereum’s new token standard, ERC-721, which was developed specifically for NFTs. CryptoKitties was a game that allowed players to trade and “breed” these digital collectibles, and it quickly became popular.
Fast forward to 2020, and the popularity of NFTs exploded. Most of this popularity was concentrated on trading popular collections like the Bored Ape Yacht Club on NFT marketplaces that used the Ethereum blockchain. When it came to the biggest projects that commanded the highest prices, Ethereum NFT projects dominated the sector.
But Ethereum is not the only blockchain with a thriving NFT market. There are numerous other NFT collections on blockchains like Flow, BNB Chain, Solana, Cardano, and many others. Despite this, Ethereum still holds a substantial market share thanks to its first-mover advantage.
So, why do NFTs thrive on Ethereum? It all comes down to the technology behind it. The ERC-721 token standard, which was designed for NFTs, provides a way to create and track unique digital assets. This makes it easier for developers to create and sell NFTs on the Ethereum blockchain.
For those who purchase collectible NFTs, many are drawn by the collection rather than the blockchain it uses. However, if you want to buy an NFT, you’ll likely need a crypto wallet and a cryptocurrency that is accepted by the NFT marketplace you are using.
In conclusion, NFTs are here to stay and Ethereum is the leading blockchain for NFTs thanks to its innovative technology and first-mover advantage. Whether you’re a digital art collector or interested in blockchain-based identity and authentication systems, NFTs offer a new and exciting way to own and trade unique digital assets. In our next lesson, we’ll learn how to buy an Ethereum NFT, so stay tuned!
