Non-fungible token (NFT)

Blockchain had early use in the art industry, allowing individuals to own digital intellectual property with records stored in the digital blockchain roster. NFTs are used to prove ownership and authenticity of digital art. In June of 2017, a company called Larva Labs released an art collector line called CryptoPunks. The “Punks” were available free of cost for anyone with an Ethereum wallet. Only 10,000 Punks were developed, no two alike, and all were quickly claimed. Ethereum wallet holders may now sell or trade punks for Ethereum coins. The average punk sold for approximately 4.12E, which equated to $2,998 on December 29, 2020. CryptoPunksCryptoPunks are just one example of rare digital art.

Blockchain games also use NFTs; for example, CryptoKitties, a game developed by a Canadian company called Axiom Zen, allows users to use the Ethereum blockchain to represent in-game assets controlled by the user instead of the developer. In-game assets for CryptoKittiesCryptoKitties can be traded in third-party marketplaces requiring no added permissions from the developer.

The ERC-721 is a standard developed by the CryptoKittiesCryptoKitties developer, Axiom Zen, and was also the first standard that represented non-fungible assets. The ERC-721 standard is an inheritable Solidity smart contract, which means other developers can use the ERC-721 to create and develop new compliant contracts that fit their assets using the import tool from the OpenZepplin library. ERC-721 provides permissions to transfer non-fungible assets from one party to another and provides an identifier for that asset’s present owner.