NFTs and Digital Assets Flashcards

What does NFT stand for?

Answer: Non-Fungible Token

NFT stands for Non-Fungible Token, meaning each token is unique and cannot be exchanged on a one-to-one basis with another token of the same type.

Which Ethereum token standard is most commonly used for NFTs?

Answer: ERC-721

ERC-721 is the standard that introduced non-fungible tokens on Ethereum, giving each token a unique identifier that distinguishes it from all other tokens.

What makes a token 'non-fungible' as opposed to fungible?

Answer: Each unit is unique and not interchangeable with another of the same type

Non-fungible means each token has unique properties and cannot be replaced by an identical unit, unlike fungible assets like Bitcoin where every coin is identical.

What does 'minting' an NFT mean?

Answer: Publishing a digital asset on the blockchain as a new token

Minting is the process of recording a digital asset on a blockchain, creating a new token with a unique ID that certifies ownership and provenance.

What is the primary purpose of metadata in an NFT?

Answer: To describe the properties and attributes of the NFT such as image URL and traits

NFT metadata contains descriptive information about the token — including the name, description, image URL, and traits — that defines what the NFT represents.

What is a creator royalty in the context of NFTs?

Answer: A percentage of secondary sale proceeds automatically sent to the original creator

NFT royalties allow creators to receive a percentage — typically 5–10% — of the proceeds each time their NFT is resold on a secondary market, enforced via smart contracts.

Which of the following best describes a 'digital asset' in the cryptocurrency context?

Answer: A value-bearing item that exists in digital form and can be owned or transferred on a blockchain

In crypto, a digital asset is a blockchain-recorded item — such as a token, NFT, or coin — that has verifiable ownership and can be transferred peer-to-peer without intermediaries.