What is an NFT (non-fungible token)?

NFT stands for non-fungible token. These tokens are digital assets using the same basic technology that cryptocurrencies such as Bitcoin and Ethereum use to create digital scarcity. However, NFTs use digital scarcity in a different way than cryptocurrencies. Cryptocurrencies are fungible, whereas NFTs are non-fungible.

What is the difference between NFTs and cryptocurrencies?

However, NFTs use digital scarcity in a different way than cryptocurrencies. Cryptocurrencies are fungible, whereas NFTs are non-fungible. Fungibility is the property of an asset such that individual units are interchangeable and indistinguishable from one another.

What are the different types of NFTs?

NFTs can be used as “jpegs” similar to other visual works of art. Profile Pictures (PFP) are a popular form of NFTs. The basic idea is that these NFTs are used as profile pictures for social networking sites like Twitter. CryptoPunks and Bored Ape Yacht Club NFTs are the preeminent PFP projects.

What is the difference between NFT and non-custodial markets?

There are two main choices between NFT markets: custodial and non-custodial. Custodial marketplaces hold the NFT for you, which means you must trust them. On the other hand, you won’t pay on-chain fees for basic actions like listing, buying, and selling your assets. If you trade Ethereum assets, gas fees can be a significant issue.