In this article, we'll break down what an NFT is.
Non-Fungible Tokens (NFTs) are unique digital items with blockchain-managed ownership. There are many kinds and applications of NFTs. Before we dive into the details, let's learn about a key term: fungibility.
What is fungibility?
If something is fungible, it's easily exchanged with something of equal value. Don't get overwhelmed by the idea of fungibility; it's just the ability of a good or an item to be interchanged with other individual goods or items of the same type.
A simple comparison of fungible, semi-fungible, and non-fungible items is pictured below.
Fungible items like a dollar bill, gold, or even cryptocurrencies like Bitcoin and Ethereum, can be substituted with one another without losing value. They are fungible.
Non-fungibility and NFTs
If something is non-fungible, it means it cannot be replaced. It represents something unique in value - and that's what an NFT is!
The token part of Non-Fungible Token refers to a digital certificate stored on a publicly verifiable distributed database, also known as a blockchain.
The information on this digital certificate, also known as a smart contract, makes each NFT unique. No two NFTs can be swapped, and this makes them non-fungible. Examples of NFTs include digital art, collectibles, virtual reality items, crypto domain names, ownership records for physical items, and more!
Different types of NFTs
There are two types of NFTs currently supported on OpenSea.
- 1/1 NFTs - known as ERC-721 tokens on Ethereum and Polygon, KIP17 on the Klaytn blockchain.
- Semi-fungible NFTs - known as ERC-1155 tokens on Ethereum and Polygon, KIP37 on Klaytn.
1/1 NFTs, known by their token standard as ERC-721 on Ethereum, are the classic definition of Non-Fungible Tokens that we've described above. Each NFT is unique and distinct from other NFTs.
Semi-fungible NFTs, known by their token standard ERC-1155 on Ethereum, are slightly different. Because they are semi-fungible, the items themselves are distinct from other NFTs. However, they might have a quantity greater than one. These NFTs are great for gaming items and creating membership passes for your community!
To check whether an NFT is 1/1 or semi-fungible, all you have to do is check the Details tab on the bottom left of any item page.
There are a few things to know when interacting with ERC-721 and ERC-1155 NFTs.
- On OpenSea, ERC-1155 NFTs can't be listed on auction.
- You can only lower a listing price on ERC-721 NFTs, not ERC-1155 NFTs.
- Some wallets, like MetaMask mobile, have issues displaying ERC1155's in-app.
Now that you've learned what an NFT is check out some other key terms in NFTs and Web3!