How does NFT work?

Non-fungible tokens or NFTs are executed by smart contract blockchains and specialized protocols. The most widely used smart contract blockchain for NFTs is Ethereum.

Ethereum has become the most widely used blockchain when it comes to minting NFTs. This is because the Ethereum blockchain supports a wide range of NFT token standards, including ERC-721, ERC-1155, ERC-809, ERC-994, ERC- 1201, and ERC-998. The ERC-1155 standard for example allows the creation of fungible tokens and non-fungible tokens (NFTs).

Other platforms, blockchains and smart contract protocols that also support the creation of NFTs are, Binance Smart Chain, Avalanche, Polygon, Solana, Thundercore etc.

When an NFT token is created it stores metadata about a digital file or a valuable item, the most common form is digital art.

The components or details of this NFT token metadata can include the artist or creator of the item, the description of the item, the price, the NFT creation date, the ownership of the item, specifications such as royalties, the transaction history of the asset, the new owner, and the location links of the file representing the NFT usually on the decentralized IPFS (Interplanetary File System) server.

Non-fungible tokens or NFTs are used for various purposes, usually, it serves as verifiable proof of unique digital items, but the main purpose is to create verifiable digital scarcity of digital items. But their main use is in digital art. They help to prove the authenticity and ownership of digital artworks.