What are NFT tokens?

What is an NFT token and how does it work?

NFT tokens (Non-Fungible Tokens) are a type of digital asset that allows owners to uniquely identify and track their ownership on the blockchain. NFT tokens are unique and indivisible, which means that they cannot be divided into smaller parts, like regular cryptocurrency tokens, which are fungible.

NFT tokens allow you to store different types of digital assets, such as images, audio files, videos, games, collectibles and more. Each NFT is unique, so that it can be identified, as well as transferred or sold. NFT owners also hold the copyrights to these assets, allowing them to control their use and make money from their sale.

NFT tokens are popular with collectors and artists who want to use blockchain technology to secure their artwork and other unique digital items. It is worth noting, however, that despite their uniqueness, the price and value of NFTs are still subject to market fluctuations, as with other assets.


How exactly do NFT tokens work?

NFT tokens work by placing information about a digital asset on a blockchain. The blockchain is a distributed and unalterable register that stores information about transactions and token holders. In the case of NFT tokens, this information relates to the token owner, his transaction history and the digital asset itself, which the token represents.

The owner of an NFT token is given a unique identification code that allows him to be identified on the blockchain. In this way, the owner has full control over his token and can transfer, sell or store it in a cryptocurrency wallet.

NFTs are based on the ERC-721 standard on the Ethereum network, which means they follow the ERC-20 protocol for regular tokens, but have additional functionality that allows the storage and transfer of digital indivisible assets.

NFT tokens also allow the storage of metadata, such as a description of the asset, images, videos and even sound files, which can complement and enhance the asset they represent.

When an NFT token is sold or transferred, the blockchain provides full transparency of the transaction, making it easy to track transaction history and prevent fraud.


What are NFT tokens used for and useful for?

NFT tokens are useful in many instances because they allow the storage and transfer of unique digital assets in a secure and transparent manner. Here are some of the ways in which NFT tokens are used:

  1. Art and collectibles – NFT tokens are popular in the world of art and collectibles, as they allow artists and collectors to store and sell unique artworks and other collectible digital items. With NFTs, the authenticity and uniqueness of an artwork can be secured, increasing its value on the market.
  2. Gaming and entertainment – NFT tokens are used in video games and other forms of entertainment to allow players to purchase and store unique items such as weapons, clothing, etc. NFT tokens can also enable players to earn rewards for achievements in games.
  3. Virtual real estate – NFT tokens can be used to represent virtual real estate, such as virtual land, buildings and other assets that can be bought and sold in games and virtual worlds.
  4. Copyrights and intellectual property – NFT tokens allow owners to store and manage copyrights and intellectual property such as movies, music, books and other digital content.
  5. Investments – NFTs can be used as a form of investment, like other digital assets such as cryptocurrencies. NFT owners can make money by selling and renting their tokens, which can gain value over time.


What are the most interesting and popular NFT tokens?

The most interesting and popular NFT tokens change on a regular basis, depending on trends and user interests. Here are some examples of well-known NFT tokens:

Here are some examples of well-known NFT tokens:

  • CryptoPunks – this is one of the earliest and most well-known NFT projects. CryptoPunks is a collection of 10,000 pixel characters, each of which is unique and represents a different design and style. CryptoPunks became very popular in 2021, reaching record sales prices.
  • NBA Top Shot – is an NFT platform that allows you to collect digital NBA cards depicting various moments from NBA games. NBA Top Shot cards are unique and represent specific moments from specific games, which attracts many collectors and basketball fans.
  • Art Blocks – is a platform that allows the creation and sale of generative NFT artworks. The artworks are automatically generated based on specific algorithms and parameters, giving you the opportunity to create an unlimited number of unique artworks.
  • Bored Ape Yacht Club – is a collection of NFTs depicting monkeys of different looks and versions. Bored Ape Yacht Club is a community project that brings NFT owners together in an exclusive club, offering them access to unique experiences and benefits.
  • Pudgy Penguins – is another collection of NFTs depicting penguins with different designs and styles. Pudgy Penguins is a design that gained a lot of popularity in 2021, due to its unique style and high collector potential.

Of course, there are many other NFT designs and collections that are very popular and considered interesting. However, it is worth keeping in mind that NFT prices and popularity are subject to change due to changing trends and user interests. The above list is by no means an investment recommendation that you should follow.

What are the most expensive NFTs?

Here are some examples of record selling prices:

  1. Everydays: The First 5000 Days,” an NFT artwork created by Mike Winklemann (known as Beeple), which sold for $69.3 million in March 2021. This is the highest price ever paid for an NFT.
  2. CryptoPunk #3100 – one of the original CryptoPunks, sold for $7.6 million in May 2021.
  3. CryptoPunk #7804 – another original CryptoPunk, sold for $7.5 million in June 2021.
  4. “Crossroad” – an NFT artwork created by Robert Alice, sold for $6.6 million in October 2020.
  5. “Forever Rose” – an NFT artwork depicting a drawing of a rose dedicated to love, sold for $1 million in February 2018. It is one of the first NFTs to reach the million-dollar price.

For more than 6 years, he has been interested in cryptocurrencies, tokens and blockchain, as well as other modern technologies like artificial intelligence. I have been actively investing for more than 10 years. I have developed hundreds of highly substantive articles and publications for this and many other external portals.