Non-fungible tokens (NFTs), one of the most prominent applications of blockchain technology, are commonly used to display and trade ownership of physical and digital assets, as well as intellectual property. But how exactly do NFTs work?
NFTs are created by uploading metadata in the form of a unique cryptographic token over an active blockchain, a process known as minting. This post will walk us through the many NFT blockchains that underpin the NFT ecosystem’s underlying infrastructure.
What are NFT blockchains?
NFT blockchains are the technology that the owners use to create NFTs. NFTs lose their basic property as immutable, verifiable, unique identities in the absence of blockchains. As a result, the NFT has found use as a tool for determining and validating ownership validity in a variety of industries, including artwork, intellectual property, real estate, and a wide range of collectibles.
NFT blockchains are not NFT exchanges. NFT marketplaces are open to the public and allow users to mint (make), buy, and sell NFTs. While most NFT blockchains have their own marketplaces, third-party marketplaces are also an option for users who want to reach a wider audience.
Factors to consider when choosing the best NFT blockchains for NFT minting
The following are some critical elements to consider while selecting a blockchain for NFT development.
The success of every NFT project is dependent on transaction speed. Check that the blockchain on which you intend to mint NFTs can handle a high number of transactions at once.
Otherwise, the blockchain network’s inefficiency will have a direct impact on the performance of your product.
For example, Litecoin only handles 50-60 transactions per second. If a creator uses these numbers to establish an NFT project on a blockchain, they will have to cope with delayed minting and transfers.
Furthermore, during peak traffic hours, these delays will become significantly longer.
Not every NFT will be a success. In fact, the majority of NFTs are relatively inexpensive. Why pay a large charge and lose a significant amount of your profit if an artwork will not sell for more than a few hundred dollars?
The average transaction cost is determined by the blockchain’s transaction speed. It refers to the fees that users must pay to the blockchain in order to execute their transactions.
When the network is congested, you may have to pay higher fees to outbid other users and ensure that your order is prioritized by validators. Otherwise, it could be denied.
Another essential element is the security of a blockchain network. Contrary to popular opinion, if a blockchain is not fundamentally powerful enough, it can be hacked.
In such circumstances, users of all types, including investors, traders, and NFT producers, lose their dollars and data. One notorious example is the recent $600 million Ronin attack, which emphasizes the importance of adopting secure blockchains.
Smart contracts are used by all NFTs on every blockchain. They are used to define the terms and conditions for blockchain transactions. When these conditions are met, the transfer is automated and completed without the involvement of a third-party validator.
Blockchains with sophisticated smart contracts are more safe and functional for users and NFT advances.
Furthermore, the programming language used to create these smart contracts should not be unusual. Otherwise, you may have problems locating a skilled developer.
The sort of consensus model used by a blockchain is perhaps the most essential issue that all NFT designers must address. A consensus model has an impact on the environment in addition to deciding other important elements such as pricing, speed, functionality, and security.
Blockchains that use the Proof of Work consensus model consume a lot of electricity and require powerful computer machines to approve a transaction.
As a result, creating NFTs on these blockchains may result in greenhouse gas emissions.
As a result, it is advised that only blockchain ecosystems that use Proof of Stake or other greener consensus models be adopted.
Top 5 Best Blockchain to Develop NFTs
Ethereum, which was launched in 2015 by Buterin, was the first blockchain to include smart contracts, which enabled non-fungible tokens. Since then, the blockchain has gone through several stages of development in order to facilitate and support the advancement of NFTs.
Today, Ethereum hosts over 80,300 NFT collections. The majority of these initiatives, from the industry’s pioneering ventures (CryptoPunks and CryptoKitties) to many of the current hits (MeeBits and Bored Ape Yacht Club), are powered by ERC-721 and ERC-1155 token standards.
ERC-721 lets developers create non-fungible tokens, whereas ERC-1155 allows them to create semi-fungible tokens. Aside from these two, the Ethereum development team recently suggested EIB-2309, a new token standard that would allow the minting of numerous NFTs in a single transaction.
Furthermore, practically all notable NFT markets, including OpenSea, Rarible, Nifty Gateway, SuperRare, Decentraland, and KnownOrigin, which are built on the Ethereum network, account for the majority of the industry’s trade volume.
During the London Hard Fork, Ethereum switched from the PoW (Proof of Work) paradigm to the PoS (Proof of Stake) model, boosting the blockchain’s functionality and scalability.
In comparison to the former model, which could only manage 15-25 transactions per second, the current PoS Ethereum blockchain can process 100,000 transactions at once.
Solana is well-known for being one of the quickest blockchains and a rival to the Ethereum ecosystem. The blockchain can conduct 65,000 transactions per second at a relatively cheap cost because of the hybrid PoS and PoH (Proof of History) consensus model.
Solana, founded by Anatoly Yakovenko, is a leading contributor to the NFT, DeFi, and Web 3.0 spaces. It now hosts over 350 projects in its ecosystem and intends to add 1,000 more in the coming year.
Degenerate Ape Academy, Solana Monkey Business, SolPunks, and Sollamas are some famous NFT collections on the blockchain. These NFTs can be traded on Solana-based NFT marketplaces like Solsea and Solanart.
This ecosystem came to prominence in early 2021, resulting in a 10,000% price increase for its native cryptocurrency, SOL.
Binance Smart Chain
Binance Smart Chain is a one-of-a-kind blockchain built on the Binance Chain. It is not, however, a Layer 2 scalability protocol or an off-chain solution, and it will continue to work even if the Binance Chain fails.
On both blockchains, the crypto-token BNB is utilized for transaction fees, and smart contracts are operated on BSC.
BSC is a controlled blockchain that approves and records transactions using the PoSA (Proof of Staked Authority) consensus model. This method allows it to complete around 160 transactions per second at a relatively low cost.
To promote the development of NFTs, the blockchain has its own token standard, BEP-721. Furthermore, it is compatible with the Ethereum Virtual Machine, allowing it to support a wide range of Ethereum-based applications.
One of the most widely used Ethereum blockchain alternatives is Flow.
The main goals of Flow, which was created by the Dapper Labs in 2019, are sustainability, scalability, composability, and user experience.
Flow, a relatively new ecosystem, has already made a name for itself in the market and provided several prospects for NFTs, blockchain-based games, and dApp developers. Because the network only uses the PoS consensus model, it can process around 10,000 transactions per minute.
Currently, every day, more than 100k transactions are processed. Additionally, since the blockchain entered its beta testing phase in October 2020, it has successfully housed over 3 million transactions.
With the help of Flow, several more great ventures, including NBA’s Top Shot, NFL’s All Day, and UFC’s Strike, were made possible. Two of the most well-known NFT markets developed on the Flow blockchain are BlocktoBay and Xtingles.
One of the most well-known blockchain ecosystems in the market is Cardano, which was developed by Charles Hoskinson, one of the co-founders of Ethereum. It currently has a market valuation of $16.6 billion, making it the seventh-largest blockchain in the entire world.
Based on the distributed PoS consensus method, Cardano aims to build a strong ecosystem for the creation of NFTs and decentralized apps.
Cardano Settlement Layer (CSL) and Cardano Computation Layer are the two layers of the blockchain (CCL). While CCL is in charge of hosting smart contracts, CSL handles ADA (Cardano’s native cryptocurrency) transactions and transaction recording.
Despite the fact that Cardano now completes 250 transactions per minute, you shouldn’t dismiss this high-performance blockchain based on this figure alone.
The Layer 2 scaling protocol Hydra developed by Cardano states that the blockchain may be able to process transactions at a rate of up to 2 million TPS.
The Cardano-based NFT initiatives Spacebudz, CardanoKidz, Professor Cardano, CryptoMayor, and Crypto Knitties have all achieved significant success.
It can be challenging to choose from the numerous unique blockchains that support NFTs. Fortunately, there are a wide variety of alternative blockchains available, each with a unique set of desirable characteristics. You must make sure the blockchain you selected to build your NFT project is fundamentally sound enough to endure and thrive despite shifting market trends.