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What does NFT stand for in crypto?

NFT is a non-fungible token built on the blockchain system, information about which is stored on various computers. In simple words: this is an object of art that comes with a special certificate due to NFT licensing confirming its authenticity, authorship, and belonging to a particular person. Let’s consider what does NFT stand for in crypto?

Thus, NFT is more than just a picture you can take on a screen on the Internet. This digital copyright can be auctioned off for a lot of money.

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Like cryptocurrencies, NFTs are produced on a blockchain, which acts as a database for recording all trades. Blockchain ensures the genuineness of non-fungible tokens. Thanks to this system, any user can confirm the origin and history of a special NFT through the blockchain.

When purchasing an nft stand for in crypto, the user acquires a certificate for the job. In this case, the work itself does not move anywhere. An NFT in crypto is likened to a painting belonging to a gallery, museum, or someone, but the audience may see it in a catalog or collection.

nft stand for in crypto

What does NFT mean in cryptocurrency?

NFTs in crypto are unique. You can only take one painting and swap it for another if you pay) — they’re not interchangeable. It’s like if you went to a museum and exchanged a painting of the Mona Lisa for your drawing. Everyone will notice the substitution because the tokens have a digital signature.

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At the same time, nfts crypto meaning is built on the blockchain of the Ethereum cryptocurrency. Because Ethereum has the same «backend» — NFTs are portable, it is challenging to manipulate digital signatures, and the cryptocurrency itself rarely falls.

How NFT works in crypto

There are various blockchain systems in the world, and Ethereum is one of the most popular. On the basis of blockchains, such as Ethereum, it is possible to create a digital asset that consists of a smart contract (token). NFT is a type of token based on the Ethereum ERC-721 standard.

Here is a quick overview of the ERC-721 standard to help you understand how NFT works:

Ethereum Request for Comments 721 or ERC-721 is a standard introduced in 2018 that implements an application programming interface (API) for tokens based on smart contracts. This allows tokens to be transferred from one account to another, which is a key feature of NFTs.

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The API also supports various other functions, such as transactions with third-party accounts, checking account balances, calculating the total number of tokens, and so on. Using a standard algorithm, anyone can use the application binary interface to connect to the token. This makes NFTs widely available even to users who do not have a technical background. 

When creating an NFT, a unique asset is created with a distinguishable set of metadata and identifiers, after which a smart contract is installed on the blockchain in accordance with the ERC-721 standard. The value of an NFT depends on how unique it is, not necessarily on the amount of effort put into its creation.

Once an NFT artist has created a digital asset, they can enter any NFT marketplace, the largest of which is OpenSea. An NFT artist can list an asset on the marketplace and sell it. This opens up new opportunities for generating income from works of art.

Where can you buy and sell

You can sell and purchase NFT in crypto objects on blockchain platforms — there are many of them. Some work as marketplaces with many categories, and some specialize, for example, in art or games. Popular sites: V-Art, OpenSea, Niftygateway, and the Rarible site of Russians Alexey Falin and Alexander Salnikov. There are «closed» platforms that can only be traded after confirmation of the candidacy, for example, Async Art and SuperRare.

How to pay for NFTs

Some marketplaces accept payment in fiat currencies such as US dollars, but in other cases, you cannot use cash or credit cards to pay for NFTs directly. Prices are often set in the cryptocurrency used by the network where the NFTs are registered. 

For example, if the creator minted your NFT on the Ethereum blockchain, you would use Ether (ETH), the native token on the Ethereum network, to pay. If the blockchain is Solana, you must use Solana (SOL), the native token on the Solana network. If you still need cryptocurrency, a centralized exchange is the easiest way to get it for cash.

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NFT is a token that confirms the ownership of a certain item. Usually, it can be photos, videos, and other digital art. NFTs are also used in games and other applications.

At the same time, buying a token does not mean receiving a copyright for a work of art. The latter may be available online even after purchase. NFT means you have purchased the original.

You can buy NFT in crypto on unique platforms. For example, OpenSea, NBA Top Shot, Nifty Gateway, and others. Each of them specializes in different works of art. For example, you can buy tokens on the NBA Top Shot with videos of famous basketball players. Some of these exchanges accept only cryptocurrencies, but most allow you to pay with a bank card.