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Why is Ethereum used for NFTs

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  • Are NFTs Ethereum based?

Many NFTs utilize the Ethereum blockchain at a higher level. Ethereum is a cryptocurrency, however, its blockchain is able to facilitate NFTs which store additional information that allows them to function differently from digital currencies. 

The potential for NFTs is astounding. The ERC-721 was made to address the necessity for unique tokens. Furthermore, because of the rarity and age, the ERC-721 standard is distinct, able to have different values than other tokens from the same smart contract. The top Ethereum based  NFTS by volume of transfers are ranked on the Etherscan. 

Ethereum is not the only place for NFTs, because each transaction fee must be paid in the platform’s native token. For example, 2 ADA transaction fees must be paid  in its native coin, Cardano

  • Why Are Most NFTs on Ethereum?

NFTS were born on the Ethereum blockchain. The resulting factor is that NFTs sell for much higher on average, prompting creators to use them over other platforms. 

Ethereums secure network and data structure helps it maintain its position as the leader in decentralized finance. The majority of NFT projects are run as ERC-721 coins. The blockchain also provides NFTs with more exposure to the growing market. NFT systems will likely continue to be Ethereum Virtual Machine Compatible so that Ethereum wallets can support them. 

Adversely, The increased magnitude of traffic on the network has caused a backlog in transactions, causing transaction fee prices to also increase. The limitations of the Ethereum blockchain have caused creators to seek out others like the Solana block chain, to solve these disruptions.

Ethereum NFTs vs Solana NFTs

The consensus processes of Solana and Ethereum are different. Ethereum uses Proof-of-work which trades a lower scalability with a more decentralized network. The ETH 2.0 is designed to address the low scalability problem which continues to threaten the blockchain’s position as the leader if not implemented quickly. 

Solana uses proof of stake and proof of history, which trades security for quicker transactions. While it is an astronomically more efficient system, it is not as secure as Ethereum’s blockchain. Ethereum tends to be the more trusted of the two block chains for its reputation and history with creators. 

SolSea is Solana’s NFT marketplace. It allows NFT creators to choose and incorporate licenses. There is more transparency between collectors and creators. Solanart is another prominent NFT marketplace on Solana.

  • Why Ethereum and not Bitcoin?

The goal of Ether is to make the Ethereum smart contract and DApps platform easier to monetize and  use. 

Smart contracts that assign ownership and govern NFT transferability are not supported by the Bitcoin blockchain. NFTs are not interchangeable, meaning that each NFT could represent  a different underlying asset distinguishing its value. Every bitcoin has the same value as the other. 

When an NFT is generated, the  code is stored in smart contracts that follow certain standards, like ERC-721. Each token has a distinct identity which is tied to a single Ethereum address. That means each token has a different, unique owner who can be identified. That is because they are Ethereum based and can be traded on any NFT market that is Ethereum based.

  • Which blockchain is best for NFTs?

When choosing a blockchain, be sure to  check the robustness of its smart contracts, fee structure, and security. 

NFTs provide exposure to cryptocurrencies for people who might not come into contact with them otherwise. They also contribute to the adoption of blockchain tech because of their close relation to gaming and digital art.

Cost effective NFT based transactions are required, a critical part of using and adopting non fungible assets. That means that  the cost structure of an NFT is an important factor to consider. Feeless transactions are the optimal option.

Blockchains are immutable by design, therefore, attackers are given less time to compromise digital letters. The quicker the finality of a transaction while remaining decentralized is the ideal platform to create an NFT marketplace.

The final thing to consider about your NFT development is your goal. What is your budget? Why do you want to own NFTs? And what are your investment objectives?

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