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Is Ethereum An NFT (Explained)

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You’ve probably heard about NFTs. But what are they? And what’s the fuss about Ethereum?And is Ethereum an NFT? Let’s find out below.

Is Ethereum An NFT?

No. Ethereum isn’t a Non-Fungible Token (NFT).

Ethereum is a decentralized blockchain network that offers an ideal platform for building smart contracts and NFTs.

A Non-Fungible token is a cryptographic asset minted on a blockchain. It has unique identification codes and characteristics that distinguish one from another.

Unlike with standard ETH tokens, you cannot trade or exchange NFTs with equivalence because each NFT has a unique value different from another.

Similarly, Bitcoin isn’t an NFT either. It’s a mechanism for sending storing and sending funds without going through the traditional banking system.

Is NFT Based On Ethereum?

Many NFTs are based on the Ethereum network, but Ethereum isn’t the only technology used to create NFTs.

Other blockchain networks include Cardano (ADA), Solana (SOL), Binance Chain (BNB), and Tezos(XTZ), which offer similar avenues for creating NFTs. 

What Is The Difference Between NFT And Ethereum?

Let’s look at some differences between a Non-Fungible Token and Ethereum.

Property

Non-Fungible Tokens represent digital assets with unique patterns of features, and you can store them on a blockchain network or a physical drive.

On the other hand, Ethereum is a blockchain network with a currency token for trades and exchanges. it is also a platform on which you can mint NFTs. 

Token standard

All NFTs on the Ethereum network use the ERC-721 standard, which lets developers build assets on the network.

Ethereum is the blockchain platform that provides the different token standards that help maintain and explore its blockchain network. 

Value

Each native Ethereum token has an identical value, and you can exchange or trade it for other ETH tokens. On the other hand, every single NFT possesses unique value because of their market traits. 

What Is An Example Of NFT?

NFTs continue to evolve today, and with increased adoption, they have many use cases. Besides serving as a utility token or digital asset, there are other examples of NFTs in the market. 

For example, you may have heard about the Bored Ape Yacht Club, or Cryptopunks. These are some examples of the most successful NFT projects. But that’s not the only way to use NFTs.

Here’s a list of other items that can work as NFTs:

  • Event tickets
  • Digital collectible art i.e., GIFs, JPEG, PNG and more.
  • Decentralized finance applications
  • Game assets
  • Identity Preservation Units

What Do You Get When You Buy An NFT?

In short, when you purchase an NFT, you get to exclusive ownership rights to the digital non-fungible token. The NFT comes with a deed which acts as proof of ownership for an NFT.

Since these tokens have particular value, unlike other traditional assets, you cannot exchange an NFT for another NFT unless they have the same value or are in a similar industry. 

When buying or selling NFTs, you become part of a train of sellers who owned the token at some point. It means you can always track an NFT after you sell it and discover its original owner. 

Buying and selling NFTs can come with restrictions depending on your geographical location. If you live in New York, don’t miss our guide: How To Buy NFT In New York.

Why Are NFTs So Popular?

NFTs continue to draw interest and intrigue because of several reasons. 

Hard to replace 

Unlike standard assets, NFTs are difficult to replace. Every non-fungible token comes with unique creation and value.

Also, once you sell your NFT, getting it back will cost you more, or you may never even get it back.

Excellent projects for collectors

Since NFTs offer a variety of tokens, everyone can get a piece to add to his collection. NFTs allow you to choose from an endless list of tokens if you’re a collector. 

How To Own A NFT?

A few factors determine the value and pricing of an NFT in the market. Depending on these factors, you may spend anywhere between a few dollars to a few million dollars.

There’s no specific measure of value on NFTs, so you may not always get a good deal.

Here are the various ways to get into the NFT game. 

Buy an NFT

Buying an NFT is the easiest way to acquire one. Today, there’s an endless list of NFTs you can purchase and store. You can visit several marketplaces which offer auctions where your ideal NFT project is. 

Owning an NFT through this method has its upside and downside too. You may get a better resale once you buy the NFT.

The downside, however, is that there’s no precise way to tell the demand size for your NFT unless you got it from a secondary marketplace. 

Secondary marketplaces let you compare the prices of the NFT from the original owner to what you want to sell or buy. 

Buying ETH

Most marketplaces will take ETH as payment for NFT. That’s because Ethereum is the origin point for many non-fungible token projects.

All you need is to open a cryptocurrency exchange and buy your ETH before transferring the ETH to your crypto-wallet. 

For starters, some excellent examples of such wallets include; eToro, Metamask, and Coinbase. 

Linking your MetaMask to an NFT Marketplace

With multiple marketplaces available today, you have more options of where to buy your first NFT. Every marketplace is unique and offers varying types of NFT like collectibles or art. 

To start buying yourself an NFT, you need MetaMask or any other Ethereum wallet. These wallets store your coins and secure your digital assets. You can check out previous articles to find out how to use MetaMask. 

Mint your NFT

Minting NFTs is technical and requires someone with advanced blockchain knowledge to achieve it. You need software and a good computer to succeed.  

However, the upside to this is you get to own the rights and determine the initial price of the NFT. 

Final Thoughts

To quickly recap: Ethereum is not an NFT, but it provides and excellent platform for NFTs and NFT marketplaces. When you buy an NFT, you get exclusive ownership to the token, and you can transfer it to someone else.