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A Comprehensive Analysis of 4 Blockchains That (Will) Support NFTs

Non-fungible tokens, or NFTs, are a disruptive blockchain-based intellectual property breakthrough initially offered in late 2017 on the Ethereum network. Blockchain and non-fungible tokens (NFTs) are provably digital collectible assets that are cryptographically unique, rare, non-replicable digital assets mostly established through the use of smart contracts.

Walter Benjamin, a philosopher, cultural critic, and essayist, grappled with the transition of “The Work of Art in the Age of Mechanical Reproduction” nearly a century ago. While art might always be imitated or reproduced poorly – by apprentices, pupils, studios, and counterfeiters — emerging forms of technology such as photography and cinema enhanced the efficiency and fidelity of reproduction. This development called into question the meanings of “originality” and “authenticity,” as well as separating the duplicated work from its original’s “aura.” We now live in a digital reproduction era, in which a few easy clicks or lines of code may produce an excellent replica, enhanced copies, or even “deep fakes” that never existed.

Mr. Meni Rosenfeld, cryptographer and President of the Israeli Bitcoin Association, published the article “Overview of Colored Coins” on December 4, 2012. The paper explains how to take advantage of Bitcoin’s “fungibility” by separating a specific number of coins from the rest for particular purposes. It suggested that adding “specialised” to coins by separating them from the rest of the Bitcoin blockchain could assist in building specialist applications.

According to new research from nonfungible token data provider Nonfungible.com, sales of nonfungible tokens rose to more than $17 billion in 2021.Our goal is to provide a taxonomy for NFTs, examine NFT platforms, and highlight technological issues and recent advancements in addressing them. Furthermore, the objective of this article is to identify future directions for NFT technology.

Ethereum

Ethereum is a decentralised, community-run, open-source blockchain with smart contract functionality founded/conceived by Vitalik Buterin and Gavin Wood in 2013 (but not released till 2015). The native cryptocurrency of the Ethereum platform is Ether, and it is the 2nd most popular currency after bitcoin. Although it is the second most vital cryptocurrency, it is the largest and most popular coin & blockchain for the NFT space. The Ethereum network uses ‘miners’, a group of individuals that run high-powered computers to validate a transaction and add it to the blockchain. 

The concept of non-fungible tokens came in an Ethereum token standard to distinguish each token with unique signatures. The Ethereum blockchain contains the majority of NFTs. In general, there are six NFT categories: “Art,” “Collectible,” “Games,” “Metaverse,” “Utility,” and “Other.” The operative meanings of these categories rely on NonFungible Corporation’s definitions.

Ethereum is the critical driver behind two popular token standards: ERC-721 (for non-fungible tokens) and ERC-1155 (for fungible tokens) for creating new semi-fungible tokens. These standards serve the bulk of extant NFTs. Ethereum submitted EIP-2309 as a new standard, making NFT minting more efficient.

Use Cases 

  • Decentralised Finance 
  • NFTs
  • DAOs – Decentralized autonomous organisations 

What They Offer

  • Banking for Everyone – all you need is the Internet
  • A more private internet – No need to provide details for non-custodial wallets (KYC)
  • A peer to peer network – Can carry out transactions between individuals without the use of a third-party
  • Censorship resistance – No governmental or organisational control over Ethereum – Decentralized
  • Compatibility for the win – Products on the Ethereum network are compatible so that companies can build on each other’s success. 

Advantages

  • Allows for the creation and exchange of Non Fungible Tokens (NFTs) –  ERC-721 network – the first to do so. 
  • A large number of cryptocurrencies operate as ERC-20 tokens on the Ethereum blockchain + used platform for Initial coin offerings 
    • Thousands of Decentralized Apps (dApps) are powered through the blockchain EXAMPLES:
      • Uniswap – Decentralized Exchange
      • OpenSea – Largest secondary marketplace for NFTs
      • Genie.xyz or Gem.xyz – a marketplace you can bundle more than one NFT and save on gas fees 
  • Large transaction volume – makes it easier to buy and sell products on the network
  • High levels of decentralisation – the higher the number of nodes, the more decentralised the network 

Disadvantages

  • The number of transactions it can put out per second is still low than other blockchains – 15 Per second
  • Expensive gas fees due to mining and the number of transactions/volume of the blockchain – The more people using the blockchain, the more expensive gas fees become
  • All smart contracts are stored publicly on all nodes, bringing elevated costs to the user
  • If there are performance issues, these arise in every node of the blockchain, resulting in lower network speeds
  • Proof of stake has taken long 
  • Transaction privacy – All data is public, so if you are new to the crypto world, people can figure out your real identity

Benefits of Building on the Ethereum Blockchain  

  • A rich ecosystem of developer tooling.
  • User experience improved by offering a simple interface to interact with the blockchain and smart contracts.
    • Metamask Wallet – See and trade your NFTs
  • Large user base and community. 

NFTs on Blockchain

  • Largest NFT blockchain
    • Most NFTs are on this blockchain – despite the high gas fees
  • Most popular marketplaces
    • OpenSea
    • LooksRare
    • Genie or Gem – Ability to buy multiple NFTs in one go and save gas fees
  • Most known/famous NFTs (commonly referred to as blue-chip projects)
    • Bored Ape Yacht Club
    • Crypto Punks
    • Doodles
  • The dominance of NFT has fallen from 98%-to-80%

Solana

Solana is a proof-of-stake blockchain that claims to be the world’s quickest. Its ability to scale is appealing, as it ensures that no transaction on the network will exceed $ 0.01. Solana’s goal to become the blockchain of choice for crypto apps has made it popular in the NFT sector.

The Solana blockchain, created by Anatoly Yakovenko, is built on a unique blend of proof-of-history (PoH) and proof-of-stake (PoS) consensus processes. Because nodes do not expend processing power before validating alternative timestamps, the theory underpinning PoH allows validators to manage their clock and speed up the transaction verification process.

Solana’s smart contracts (also known as programs) are implemented on-chain using the Rust, C, and C++ programming languages. It charges a modest transaction fee of about $0.00025 for every transaction.

Solana’s most notable characteristic, which has paved the road for its widespread acceptance, is its lightning-fast transaction speed. Solana can currently process 65,000 transactions per second, with the creators predicting that this number will rise to 700,000 TPS as the network grows. Furthermore, the hybrid protocol of the blockchain allows for significantly faster transaction and smart contract validation times.

Solana already has several impressive NFT projects, the most notable of which are Degenerate Ape Academy (an NFT collection of 10,000 smoothest-brained apes), notwithstanding its newness.

Use Cases

  • Decentralised Finance 
  • NFTs
  • DAOs – Decentralized autonomous organisations 
  • Web3

Advantages

  • Scalability 
  • Leveraging of sharding tech helps and proof of history maintain the rate of transaction and energy efficiency
  • Allows the creation and exchange of Non Fungible Tokens (NFTs) SPL network. 
  • A large number of cryptocurrencies operate as SPLM tokens on the Solana blockchain
    • 400+ projects (dApps) are powered through the blockchain. EXAMPLES:
      • Solsea
      • DigitalEyes.market
      • Metaplex
  • Process transactions quickly no matter how big or small it is
  • Secure
  • Uses zero-knowledge proofs to keep data and identity, thus safe from third parties
  • Cost-effective because: 
    • Transactions process at a breakneck speed for a low gas fee
    • 50,000 -65000 transactions per second 
    • It is ETH-interoperable
    • Low barriers of entry for validators
    • Speed 
      • Allows up to 710,000 transactions per second w/1-gigabit network

Disadvantages

  • Centralisation is still relatively high when compared to other blockchains
  • Not much transparency
  • NFT markets for the Solana Blockchain are not very transparent 
  • Lower user base than Ethereum

NFTs on the Blockchain

  • It is the second biggest and fastest-growing market for NFTs – a contender for Ethereum.
  • The Solana and Phantom wallets will soon be incorporated into OpenSea, thus reducing Ethereum dominance.
  • High volume of sales – crossed the 1 billion mark in trading volume in January 2022.
  • Low gas fees are a great incentive.

Advantages

  • Allows the creation and exchange of Non Fungible Tokens (NFTs) – SPL network. 
  • A large number of cryptocurrencies operate as SPLM tokens on the Solana blockchain
    • 400+ projects (dApps) are powered through the blockchain. EXAMPLES:
      • Solsea
      • DigitalEyes.market
      • Metaplex
  • Large transaction volume makes it easier to buy and sell products on the network.

Disadvantages

  • It has been criticised for not being decentralised enough.
  • If there are performance issues, these arise in every single node of the blockchain, resulting in lower network speeds.
  • Proof of stake has taken long to be accomplished.
  • Transaction privacy – All data is public, so people can figure out your real identity if you are new to the crypto world.
  • An exemplary hardware configuration for Solana is a bit more expensive.
  • Numerous implementations are still in the process of being released on the Mainnet Beta version.

Benefits of building on Solana Blockchain  

  • A rich ecosystem of developer tooling.
  • User experience improved by offering a simple interface to interact with the blockchain and smart contracts.
    • Solana SPL Token Wallet– See and trade your NFTs.
  • A growing user base and community.
  • High transaction speed.

Flow

Flow is the creation of Dapper Labs, the Canadian firm that brought CryptoKitties to the world. This proof-of-stake blockchain can power massive ecosystems of applications, notably those related to games and digital valuables. The built-for-purpose architecture of Flow, which targets consumer applications, has encouraged high-profile corporations to sell their digital assets over the Flow network. UFC and NBA are two companies, with CNN “collecting” memorable moments from its network. The innovative multi-node architecture of Flow addresses scalability challenges, ensuring low-cost, quick transactions. With the FLOW token, transactions, staking, and governance voting are all done.

Flow aims to offer increased scalability by using extendable smart contracts driven by Cadence (the programming language developed by the Flow team). The multi-node and multi-role design of the blockchain is integral to the core transaction processes of consensus, execution, collection, and verification.

One of the most impressive aspects of the Flow blockchain is its speed: it can process 10,000 transactions per second or more. Flow has a two-tiered fee structure for transactions: one for registering an account, which starts at 0.001 FLOW (the platform’s native token), and another for transactions, which begins at 0.000001 FLOW. Flow has a set of APIs and comprehensive documentation on their utility.

Flow, launched in 2020, has attracted the attention of many crypto aficionados and is frequently regarded as a solid Ethereum alternative.

Use Cases

  • Decentralised Finance 
  • NFTs and dApps
  • Web3

Advantages

  • Developer-first experience
    • Easy to learn and use the programming language that was designed for dApps and digital assets
    • Upgradeable smart contracts
    • Fast and responsive 
  • Consumer-friendly onboarding
    • Mainstream ready experience – multiple payment on-ramps and optimised for consumer applications
    • Secure – it protects mainstream users against malicious apps 
    • Smart user accounts – easy to pay transactions and recover lost keys for users
    • Early adopters get incentives
  • Greener Web3 Network 
    • No need for sharding or layer two 
    • Minting an NFT on Flow costs less carbon than a post on a social networking site!

NFTs on the Blockchain

  • The idea was to create an ecosystem that would combat the issues Ethereum had with network congestion. A blockchain that could support billions of dApps users with capabilities to scale up easily 
  • One critical factor in favour of this blockchain is its multi-node architecture (Ethereum uses Sharding)
    • Ability to support the creation of apps with security and composability 
  • Transaction fees or general fees are VERY CHEAP if compared to Ethereum
    • First fee in flow blockchain is creating your account = 0.001 Flow = 0.007 USD
    • The second fee is an actual transaction fee that is around 0.000001 Flow = 0.000007 USD
  • Known Projects – CryptoKitties and NBA Top Shot

XRP Ledger (XRPL)

The XRP Ledger (XRPL) is a global developer community-led decentralised public blockchain. It’s quick, efficient, and dependable. It provides developers with a robust open-source basis for executing even the most demanding projects—without harming the environment—due to its simplicity of development, minimal transaction costs, and educated community.

David Schwartz, Jed McCaleb, and Arthur Britto founded the company with the purpose of producing a more sustainable digital asset that was developed exclusively for payments.

Use Cases

  • NFTs -allows issuance of IOUs that can represent a currency of any value, which can extend to the issuance of NFTs
  • Decentralised Finance – Provide access to financial products and services online. 
    • Decentralised smart contract protocols are replacing the traditional financial institutions 

Advantages

  • It is considered to be one of the ‘greenest’ blockchains out there as no energy is wasted/required in the transaction process
  • It is a public and decentralised exchange that is maintained by the community and not just one organisation or individual
  • Its ability to settle/perform thousands of transactions per second makes it quicker than most other blockchain networks
  • The XRPL does not waste energy as there is no need for mining
  • Transactions are incredibly affordable (a fraction of a cent), removing obstacles for users from lower socio-economic backgrounds

Disadvantages

  • XLS 20-d protocol in beta phase – still needs to be incorporated into XRPL mainnet.
  • However, this protocol will allow developers to access essential NFT functionalities such as: 
    • Minting, Trading and burning of tokens 
    • Setting automatic royalties 
    • Co-ownership 
    • Numeration, transfer and storage of tokens 

NFTs on the Blockchain

  • People are still waiting for xls20-d to be adequately incorporated; however, they can test on the XRPL through the NFT-Devnet
  • Efficient because NFTs will be available on the entire network
    • No smart contract
    • NFT identity is built in the transaction of the NFT itself 
    • Multisign layers allow you to claim ownership of NFTs over all the blockchain

Conclusion

Blockchain technology is always progressing, and thanks to the Ethereum blockchain, there have been some significant advancements in the previous few years, particularly for NFTs. Non-fungible tokens (NFTs) are digital tokens that are one-of-a-kind, non-transferable and not hackable. They are fuelled mainly by public blockchains such as Ethereum, Solana, Flow, and XRPL. NFTs are placed in “smart contracts,” automatically executable software that runs on top of the distributed ledger on which the NFT is recorded. The NFTs are intended for the fun of collecting and financial gain due to their scarcity and uniqueness.

Choosing the suitable blockchain necessitates weighing tradeoffs in various areas, including throughput, transaction costs, the existing ecosystem of applications, and the degree of decentralisation. The ideal infrastructure partner would be able to handle various blockchains and enable asset interchange between them. Moreover, while a company may begin by producing NFTs on one blockchain, there are likely to be many more blockchains that support NFTs in the future. The company may wish to develop NFTs on several blockchains.

Raul Gavira
Raul Gavira

He is a 29-year-old content writer and digital marketer with a passion for Crypto, NFTs and anything else of the digital realm. Born and raised internationally, he speaks three languages fluently: Spanish, English & Dutch. His first interaction with crypto was around 2013, but he was not a firm believer of it at first. Half a decade later he found himself entering the crypto-sphere and since then he has been mesmerized by it. His goal is to continue to learn more about this fascinating world and contribute positively to its growth.