The best blockchain for non-fungible tokens (NFTs) is one that has sufficient usage, affordable fees, and a seamless user experience. At this time, the leading blockchains for NFTs include Ethereum, Solana, and Polygon. However, there’s a lot more to it, as this article explains.
First, let’s break down the concept of blockchain and NFTs.
Blockchain technology is a distributed, immutable, and public ledger that enables the storing and tracking transactions across the network. Several blockchain networks created today serve different purposes.
What are non-fungible tokens (NFTs)? They are digital assets that are used to represent real-world assets. They are not interchangeable due to their unique features. Most NFTs today belong to an NFT project.
It is true that not all blockchain supports NFTs. Bitcoin, for example, was designed to serve as a peer-to-peer money transfer system. However, there are blockchain networks that support the trading and storage of NFTs. Examples are Ethereum, Solana, Polygon, Cardano, etc. Many of these blockchain networks have features that suit them best for different NFT projects.
Whether you are searching for the best blockchain for your NFT project, you are an investor looking for the best blockchain for NFTs, or you wish to simply broaden your knowledge on the subject, this article is arranged to help you see the best blockchain for NFTs.
Here is a quick outline to help you navigate easily through the article:
- What Is Blockchain?
- How to Choose the Right Blockchain for Your NFT Project
- Best Blockchain for NFTs
What Is Blockchain?
Blockchain is a digitally distributed and public ledger that is used to record transactions across several networks of nodes. Transactions are immutable, meaning that they are irreversible. As a result, transactions cannot be altered or deleted. These transactions are usually publicly visible to anyone.
Transactions are compiled into blocks, which are stored on the network. These blocks accumulate and become chains of blocks, hence the name – blockchain.
The first publicly known blockchain is the Bitcoin blockchain. It was launched in 2008. It was designed to serve as an electronic payment system. For this reason, Bitcoin does not have inherent support for NFTs.
However, many other blockchain networks exist today. Interestingly, many of these have the attributes required to host NFT projects. Examples of such blockchains include Ethereum, Tezos, Polygon, Avalanche, etc.
How to Choose the Right Blockchain for Your NFT Project
As you embark on your journey to create your own NFT project, here are some key factors you should consider when choosing a suitable blockchain:
Transaction speed is the amount of time it takes for a transaction to be successful. This is a very important factor to consider when selecting the best blockchain for NFTs because the transaction speed contributes to the users’ satisfaction.
The speed of a transaction varies from blockchain to blockchain. As a result, some blockchains can perform transactions faster than others. While some blockchains like Ethereum may take up to 14 minutes to confirm transactions, others like Solana and Cosmos perform transactions almost instantly.
The ability of a blockchain to perform fast transactions is often tested when there is network congestion in the network. Many seemingly fast blockchains have never been tested by a flurry of transactions and thus may not be considered the best blockchain for NFTs.
This is the amount spent to facilitate transactions. Transaction costs for NFT transactions are normally in two forms: network gas fees and platform fees.
Gas fees refer to what users pay to confirm transactions on the underlying blockchain. On the other hand, platform fees refer to what NFT marketplaces charge users to facilitate transactions. Leading NFT marketplace OpenSea charges a fixed 2.5% for each NFT sale.
Note that transaction costs on networks like Ethereum often soar during periods of congestion. In late April, Yuga Labs, the team behind the popular NFT collection Bored Ape Yacht Club (BAYC), sold 55,000 pieces of its newly created Otherdeed NFTs. Ethereum, the underlying network in use, saw a spike in gas fees as many users raced to participate in the sale. Some users who could not complete the transaction consequently lost their transaction fees.
Learning from Yuga Labs’, anyone preparing to start an NFT project should weigh the blockchain they choose. The objective could be to offer users a cheap minting and transaction experience.
Smart Contract Functionality
Smart contracts are lines of code designed to produce a certain outcome once specified conditions are met. For instance, it can automatically transfer funds from a user’s wallet if they approve a transaction and have the specified balance to complete an NFT purchase. Blockchain projects use several smart contracts for different purposes.
Smart contract functionality must be considered when choosing a suitable blockchain for your NFT project. This is because the stability and smooth running of the underlying blockchain network are paramount if the NFT project is to thrive.
Take the time to learn the programming language utilized in the blockchain of your choice. For example, Ethereum uses a programming language called Solidity. Other programming languages used by other blockchains are Rust, C++, Golang, Vyper, etc. You can also choose to hire professionals specialized in any of these languages.
A blockchain is said to be at consensus when all the nodes and validators in the system agree on a single transaction. There are different consensus algorithms used by blockchains today. Some include proof-of-work (PoW), proof-of-stake (PoS), proof-of-history (PoH), proof-of-staked-authority (PoSA), etc.
The most common ones used by blockchain networks are PoW and PoS algorithms. The PoW model is characterized by its impact on the environment due to the energy emission during mining computations. Bitcoin uses the PoW consensus mechanism. The PoS model, on the other hand, is energy efficient and faster than the PoW algorithm.
Examples of blockchains using the PoS model include Solana, Polygon, Cardano, Avalanche, and many other blockchain networks. Ethereum recently joined the bandwagon after an upgrade to its long-awaited Merge.
Best Blockchain for NFTs
Having considered several factors to consider when selecting the best blockchain for NFTs, let us now consider three notable blockchain networks that we find best suitable for trading and storing NFTs.
This is the second largest cryptocurrency. With its smart contract functionality, the blockchain has become home to many top NFT projects today. Even though Ethereum is not the first blockchain to introduce the concept of NFTs, it currently holds the most significant number of NFT projects and handles the largest trading volume.
Examples of top NFT projects on Ethereum are Bored Ape Yacht Club (BAYC), CryptoPunks, Mutant Ape Yacht Club (MAYC), Otherdeeds, etc. Top NFT marketplaces also support NFTs on the Ethereum network. Some of these platforms include OpenSea, Rarible, LooksRare, Axie marketplace, and more.
Ethereum has a token standard that is used to host NFTs. The token standard it uses is called ERC-721. With this standard, an NFT can be created with unique features, making it different from any other token in the same collection.
Ethereum has a multi-token standard called ERC-1155. This standard is simply a fusion of the functions of ERC-721 and ERC-20, the token standard for fungible tokens like ETH.
Despite garnering interest from many NFT projects, the network still struggles with high transaction fees. Also, the network has only recently migrated from an energy-consuming proof-of-work consensus model to an energy-efficient proof-of-stake model while still awaiting further upgrades.
Solana is a layer-1 blockchain that uses an energy-efficient proof-of-stake consensus mechanism. It has attracted several NFT projects’ interest due to its network speed and low transaction fees. Solana currently handles over 3,000 transactions per second. For both fungible and non-fungible tokens, Solana uses the SPL token standard.
Among the popular NFT projects existing on the Solana network are Degenerate Ape Academy, DeGods, Okay Bears, and Y00ts.
There are several Solana NFT marketplaces, the most prominent of which is Magic Eden. The platform lists about 2,000 NFT projects. Other marketplaces include SolSea, Solanart, Solport, etc.
Phantom is one of the best NFT wallets to use for Solana and has recently expanded to include support for Ethereum and Polygon. Phantom offers a novel burn feature for users to receive a small token in SOL tokens for destroying worthless NFT tokens.
A disadvantage of the Solana network is its occasional network downtime. Due to its network glitches, Magic Eden expanded to other blockchains like Ethereum and Polygon. The move was made to reduce dependence on Solana.
Polygon is another layer-1 blockchain that utilizes a proof-of-stake consensus model. Since its launch in 2017, Polygon has served as a scaling solution for the Ethereum network. Powered by its native token, MATIC, the Polygon network enables the trading of fungible and non-fungible tokens.
NFTs in the Polygon ecosystem can be stored in a Polygon wallet. For a user to access certain Polygon NFTs, a bridge is required. A bridge is simply a link between two blockchains. In some cases, Ether is needed to cover transaction fees through these bridges.
Polygon has become home to several NFT projects. These projects include PolygonPunks, ZED Run, Crypto Unicorns, etc.
NFT marketplaces also support the growth of Polygon. Popular examples include OpenSea, Magic Eden, NFTically, Venly Market, Zesty Market, etc.
In this article, we have adequately explained the meaning of blockchain and NFTs. We have also discussed the best blockchain for NFTs. Here, we highlighted three: Ethereum, Solana, and Polygon.
We recommend carefully reviewing these blockchain networks as you decide on the best blockchain for your NFT project.
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