What is NFT?
NFT (Non-fungible token) is a unique token encoded on the blockchain, representing real or digital assets such as real estate, artwork, music, videos, certificates, game items, memes…
Each NFT is unique, valuable, and non-interchangeable, acting as proof of ownership for the user in the digital realm.
For example, common tokens like BTC are a type of fungible token, users can easily trade one BTC for another BTC, because they have the same nature and value.
On the other hand, a ticket to The Weeknd’s concert would be a type of non-fungible token, as they represent seats of different values in the concert and each seat is unique.
Features of NFT
NFT has outstanding properties such as:
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Uniqueness: Each NFT is unique. Even if someone else creates multiple copies with the same image (or file) as that NFT, they will still have their own unique ID and be different from the original.
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Permanence: The existence of NFTs is permanent along with the information stored in that token, such as messages, images, sounds, data…
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Verifiable: NFTs are essentially lines of code programmed on the blockchain network . Therefore, information about the original author of the NFT will always be verifiable, regardless of how many times the work has been bought and sold and how many people own it.
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Permissionless: Depending on the nature of the blockchain network the NFT is created on, this feature may be present. If the NFT is created on an open blockchain, it can also be accessed at will without permission.
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Ownership: NFT owners have full control over the ownership, control, and use of the NFT in any way, including buying, selling, staking, farming, etc.
How do NFT Tokens work?
Users (or projects) can issue NFTs on the Ethereum network by deploying a smart contract that defines the contract’s functionality based on the application of popular token standards for NFTs, including:
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ERC-721 : For each new NFT, the developer has to deploy a new smart contract, which is a waste of resources and a waste of effort to build.
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ERC-1155 : This is an improved version of ERC-721. Developers can create both fungible and non-fungible tokens in a single smart contract, and the number of tokens in a contract is unlimited.
Similarly, on the BNB Chain network, the BEP-721 and BEP-1155 standards will be used.
The Values of NFTs
The value of NFTs currently lies in three main aspects:
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The value of the collateral is based on real or digital assets. For example, if USDT, USDC are backed by USD, then NFTs are backed by in-game assets. The more people play the game and buy the assets, the more the value and rarity of the NFT increases.
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Value in storing assets and ensuring the creator’s credibility. Up to now, NFTs have been responded to and applied in many different fields (music, art, sports, etc.), influencers create NFTs and call on users to buy them. Accordingly, the value of NFTs will also increase according to the level of trust between the two parties.
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Expected value: Represents the buyer’s expectation that the price of NFTs will increase in the future. At the same time, the development of NFTFi allows owners to stake, farm… their NFTs to receive rewards. This helps increase the utility and opportunity to earn more profit from NFTs.
However, users need to understand that the majority of NFT applications are collectible items, the difference is that it is encrypted and operates through the blockchain network.
Therefore, pricing NFTs is similar to pricing a real-world item, and is based on each person’s perspective, opinion, preferences, and aesthetic taste.
For example, Winkelmann’s “Everydays: The First 5,000 Days” piece, which collected 5,000 different images to represent each day and combined them into a single image, sold for a whopping $69.3 million when it was auctioned off as an NFT.

What are the applications of NFT?
Here are the applications of NFT in specific fields:
Art (Art NFT)
This type of NFT represents a digital work of art that is encrypted and can easily verify the author and owner. In addition, they can easily create and sell NFTs based on their work on NFT Marketplaces , instead of having to register to participate in galleries or auctions, which is time-consuming and costly.
For example, Damien Hirst’s NFT collection “The Currency” created NFTs that are digital versions of 10,000 unique physical drawings and sold them on OpenSea.

Music (Music NFT)
Music NFTs represent ownership or experiences related to music. For example, attending events, concerts, fan meetings, etc.
These NFTs will be created by artists, singers, musicians… by minting a token on the blockchain and selling it to fans. NFT holders will have special benefits, such as VIP seats at concerts, exclusive autographs and dinners with their idols…
On the other hand, through the issuance of NFTs on blockchain platforms, artists can earn royalties directly from their artwork, instead of having to share revenue with third parties (such as Spotify, Apple Music, Youtube…) as in the traditional market.
Gaming (Gaming NFT)
NFTs are digital assets associated with online games, such as characters, costumes, equipment, weapons, maps, music, collections… or any resource used in the gaming environment.
Players can collect NFTs in the game and have full ownership and control over them. No one (including the game developer) can take or take it from you, unless you trade the NFT with someone else.
Gaming NFTs are one of the most popular applications of NFTs, especially after the explosion of Axie Infinity in 2020, a blockchain game that simulates the Pokemon GO game with a Play-to-Earn model. Axie Infinity allows players to:
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Find, collect Pokemon NFTs and let them battle each other.
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Trade NFTs and earn profits in the form of AXS tokens.

Metaverse
The Metaverse virtual world is created from the internet and augmented reality support tools (such as VR, AR or other tools), to help users have the most realistic experiences.
In reality, delivering a metaverse experience requires a huge leap in technology, and it will likely be a long time before we can experience a true metaverse.
However, many gaming projects have been built on blockchain and are based on the idea of the metaverse, also known as the game metaverse. In it, players can create their own world, own NFT gaming assets and trade them on the NFT Marketplace to earn money.
Some metaverse game projects based on blockchain technology such as Otherside, Decentraland, The Sandbox…
Identity (Identity NFT)
Decentralized identity (DID) is the concept of users having full ownership and control of their identity information through the blockchain network.
Identity NFTs will represent information that helps identify an individual, such as full name, email, wallet address, KYC information , etc. NFT owners can freely share information with other users (or platforms) or revoke access when necessary.
Applying NFTs to identity management systems also helps increase security and privacy for users, because information will be encrypted, stored on the blockchain network and eliminate the intervention of a third party.
Other applications
In addition, there are some other applications of NFT such as:
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Profile Picture ( PFP NFT ): This type of NFT allows users to use it as a profile picture. A PFP NFT collection will include many NFT images with the same theme and character, the difference will be in the costume, expression, characteristics, color…
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Domain Name NFT : This type of NFT represents a user’s wallet address by linking it to a unique domain name. They can freely name their wallet address in the format required by the project. For example, Ethereum Name Service allows users to name their wallet address with the .ens extension, such as “vybui.ens”.
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Membership NFT: A type of NFT that provides access to communities to directly experience certain activities, such as playing soccer, studying, joining groups on Discord, conferences, etc.
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Meme NFTs: Memes are encoded as NFTs on the blockchain. For example, Zoë Roth’s “Disaster Girl” was tokenized as an NFT and sold for $500,000. The proceeds from the auction were used to pay off her student loans and donate to charity.

How to create & sell NFTs
Basically, creating and trading NFTs on blockchains will include 4 steps:
Step 1: Identify the file, choose the blockchain (like Ethereum) and NFT Marketplace (Opensea) to create NFT. There are many types of t that can become NFT, such as images (JPG, PNG), audio (MP3), video, gif…
Step 2: Create an Ethereum wallet to access the NFT Marketplace and deposit some ETH tokens as a fee to create NFTs on the Ethereum network.
Step 3: Connect your wallet to the NFT Marketplace. Once connected, users can access all the features needed to create, buy, and sell NFTs.
Step 4: Upload the file to the platform and fill in the necessary information such as NFT name, description, quantity… and start minting that NFT, and pay the NFT minting fee in ETH.
After minting the NFT, users can publicly post the NFT for sale on that NFT Marketplace.
Make Money from NFTs
A popular and once popular form of making money in the NFT market is Play-to-Earn (often applied in game projects), this model allows users to make money from playing games and collecting NFTs to sell on NFT Marketplaces. Some prominent projects using this model include: Axie Infinity, The God Unchained, CryptoKitties…
Along with the development of NFT, the NFTFi (or NFT Finance) market was born to create more use cases for NFT, allowing users to make profits from NFT. Many projects were born to provide services for NFT holders such as:
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NFT Marketplace: Platform that allows creating and trading NFTs. For example: Opensea, X2Y2, LooksRare, Rarible…
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NFT Lending : Platform that allows borrowing cryptocurrencies by collateralizing NFTs. For example: BendDAO, NFTFi…
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NFT Liquidity Management: Platforms that manage NFT liquidity, or allow NFT minters to represent liquidity provision. Examples: Uniswap V3, Visor Finance…
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NFT Fractionalization : A platform that helps split an NFT into many different parts, allowing the community to use and invest together. Featured projects: Fractional.art…
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NFT Launchpad: Platform to launch and sell NFTs for the first time to the community. For example: MagicEden, NFTB…
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NFT Perpetual: Platform that enables trading of NFT derivatives. Featured projects: NFTPerp…
In the future, the NFT Finance market may launch more projects and combine many areas together.
Frequently Asked Questions about NFT (Non-fungible token)
Why buy an NFT instead of photographing or copying the artwork?
Users can take a photo of the artwork and own it as a copy of the NFT image. However, it is not the real thing, has no value, and the user is not authenticated.
On the contrary, because NFT is a unique encrypted version that stores the value and all information related to the work. Therefore, buying and holding NFT in a wallet means that the user is authenticated as the true owner of that work.
Is Non-fungible Token a cryptocurrency?
NFTs are non-fungible tokens, while cryptocurrencies are fungible tokens. The examples of Bitcoin and The Weeknd concert tickets clearly show the difference between NFTs and crypto.
Can an NFT be owned by multiple people at the same time?
For most NFTs, only one person can own an NFT. Ownership is transferred when they sell the NFT to someone else.
However, NFT Fractionalization projects have emerged to solve that need. They split an original NFT into many parts, allowing many people to own an NFT at the same time and contributing to increasing the liquidity of that NFT.