New Delhi | Jagran Business Desk: Non-fungible tokens (NFTs) have been growing tremendously on the digital market since their debut in 2017. According to data, the sale of NFTs increased to USD 25 billion in 2021 with Ethereum being a key contributor to its growth.
It’s not like this that only Ethereum can host NFTs. People can also buy or sell NFTs on other blockchain networks. However, Ethereum has been at the forefront of the surge that is being witnessed by NFTs. Let’s understand this:
What are NFTs?
An NFT can be something that could be converted into a digital form. It is stored in a blockchain, a form of distributed ledger, which could be sold and traded with others. It should be noted that NFTs are different from cryptocurrencies, but they can only be bought or sold online using them.
NFTs owners also have exclusive ownership rights over their original asset.
What is an Ethereum?
Ethereum is an open-source blockchain that has smart contract functionality. Together with ether, its native cryptocurrency, Ethereum can be used for receiving or sending value globally without interference from anyone.
It was first conceived by programmer Vitalik Buterin in 2013.
Why Ethereum is used for NFT projects?
Ethereum is a smart-contract-enabled network that helps in transferring NFTs easily. It also has a token standard called ERC-721 for NFT minting, according to a report by CNBC TV18, which also claimed that wallets like Metamask were “created in a way that the NFTs had to be compatible with the Ethereum Virtual Machine (EVM).”
The EVM works like a decentralised computer that has the ability to handle multiple projects on the Ethereum network. This forced NFT creators to make sure that their projects are operational on EVM, which ultimately forced them to make it on Ethereum.
However, Ethereum blockchain has some limitations that has allowed NFT creators to look at other blockchain networks such as Solana blockchain.