What Is an NFT? Non-Fungible Tokens and ERC-721 Standards

Fungibility vs. Non-Fungibility

To understand an NFT, we must first understand fungibility. An asset is fungible if each unit is identical and interchangeable with another unit. For instance, one Bitcoin is identical in value and function to another Bitcoin, just as a one-dollar bill equals another one-dollar bill.

In contrast, a non-fungible item is unique and cannot be interchanged on a 1-to-1 basis, such as an original deed to a property, an airline boarding pass, or a rare museum artifact.

The ERC-721 Token Standard

On Ethereum, NFTs are standard smart contracts that conform to ERC-721 or ERC-1155. An ERC-721 contract maintains a mapping linking a unique uint256 tokenId to an owner address:

mapping(uint256 => address) private _owners;
mapping(uint256 => string) private _tokenURIs;