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In this guide
- What is an NFT smart contract?
- Advantages of using smart contracts
- Standards of smart contracts for creating NFTs
- How are NFT smart contracts created?
- What does a smart contract cover?
- How do smart contracts verify authenticity?
- Do smart contracts prevent counterfeits?
- Examples of NFT smart contracts
- How to create an NFT smart contract?
- Final thoughts
What is an NFT smart contract?
Advantages of using smart contracts
- Security
- Transparency
NFT smart contracts are transparent, as all the information is stored on a public blockchain that can be accessed by anyone. This makes it easy to verify the authenticity of an NFT and ensures that ownership is clear and undisputed.
- Decentralization
NFT smart contracts are decentralized, which means that there is no central authority controlling the network. This makes it more difficult for bad actors to manipulate the system, as there is no single point of failure.
- Programmability
- Efficiency
Standards of smart contracts for creating NFTs
The most commonly used standards for NFT smart contracts are:
- ERC-721 – the original standard for NFTs on the Ethereum blockchain. It defines the minimum interface that a smart contract must implement in order to create a non-fungible token.
- ERC-1155 – a newer standard that was introduced as an improvement over ERC-721. It allows for the creation of both fungible and non-fungible tokens within the same smart contract. This makes it more efficient for creating collections of NFTs, as it reduces the number of contracts that need to be deployed.
- ERC-998 allows for the creation of NFTs that can own other NFTs. This makes it possible to create complex collections of NFTs that can be traded as a single unit.
- TRC-721 – a standard for NFTs on the Tron blockchain. It is similar to ERC-721, but has some minor differences in the interface that a smart contract must implement.
- NEP-11 – a standard for NFTs on the NEO blockchain. It is similar to ERC-721, but has some differences in the way that ownership and transfer of tokens are managed.
How are NFT smart contracts created?
Сreating an NFT smart contract requires programming skills and knowledge of blockchain technology. Such contracts are created using programming languages like Solidity, which is a high-level programming language designed specifically for creating smart contracts on the Ethereum blockchain.
Here are the basic steps to create an NFT smart contract. The first step is to write the code for the NFT smart contract using a programming language such as Solidity. This code defines the rules and logic for the NFT, such as its name, symbol, metadata, and transferability.
Once the code is written, it needs to be compiled into bytecode that can be executed on the Ethereum Virtual Machine (EVM). The compiled bytecode is then deployed to the Ethereum network as a smart contract. This requires the payment of a deployment fee, known as gas, which is paid in Ethereum cryptocurrency.
Once the smart contract is deployed, the NFT can be created by calling the create function in the smart contract code. This function will create a new token and assign ownership to the account that called the function.
What does a smart contract cover?
- Token metadata that describes the NFT, such as its name, symbol, and description.
- Token ownership transfer rules, such as how much cryptocurrency is required to purchase it and where the funds should be sent.
- Token creation rules, such as the maximum number of tokens that can be created and how they can be minted.
- Token storage on the blockchain network, such as in a digital wallet or a decentralized storage system.
- Token additional functionality, such as whether it can be used as collateral for a loan or as a reward for completing a task.
How do smart contracts verify authenticity?
First, NFTs have a unique identifier that is assigned to them by the smart contract when they are created. This identifier is stored on the blockchain and cannot be changed, ensuring that each NFT is unique and cannot be replicated.
NFT smart contracts can also use digital signatures to verify the authenticity of the creator and owner of the NFT. Digital signatures are created using cryptographic algorithms and provide a secure and tamper-proof way of verifying the identity of the sender and receiver of a transaction.
Besides, NFTs can contain metadata that describes the asset, such as its name, description, and image. This metadata can be used to verify the authenticity of the NFT by comparing it to the original asset.
Do smart contracts prevent counterfeits?
Counterfeiters can still attempt to create fake NFTs by copying the metadata of an existing NFT, such as its name, description, and image, and creating a new token with the same metadata. To prevent this, some NFT platforms use advanced techniques such as image recognition, watermarking, and other digital signatures to ensure the authenticity of the NFT.
Examples of NFT smart contracts
- CryptoKitties
CryptoKitties is a popular NFT platform that uses smart contracts to create unique digital cats that can be collected, traded, and bred. The smart contract defines the rules for creating new CryptoKitties, including their unique attributes and genetic makeup.
- Decentraland
Decentraland is an NFT platform that uses smart contracts to create virtual real estate that can be bought and sold. The smart contract defines the rules for creating new parcels of land, including their location, size, and ownership.
- NBA Top Shot
NBA Top Shot is an NFT platform that uses smart contracts to create unique digital collectibles that are based on iconic NBA moments. The smart contract defines the rules for creating new moments, including their rarity and authenticity.
- SuperRare
SuperRare is an NFT platform that uses smart contracts to create unique digital art that can be collected and sold. The smart contract defines the rules for creating new artworks, including their ownership, authenticity, and provenance.
Final thoughts
Overall, NFT smart contracts are a powerful tool that are transforming the way we think about ownership and value in the digital world. As the technology continues to evolve, it will be exciting to see how NFT smart contracts are used in new and innovative ways.