NFTs Explained: How Non-Fungible Tokens Work in 2025

Frequently Asked Questions

01.What is the difference between an NFT and a cryptocurrency?

Cryptocurrencies like ETH or BTC are fungible: each unit is identical and interchangeable. An NFT carries a unique tokenId that makes it distinct from every other token in the same contract. You can divide 1 ETH into fractions; you cannot split a single NFT's ownership without additional fractionalization contracts layered on top of the base standard.

02.Do you own the image when you buy an NFT?

You own the on-chain ownership record: the ownerOf mapping in the smart contract that assigns that tokenId to your wallet address. The image is typically stored off-chain on IPFS or a server. Intellectual property rights are separate and depend entirely on the creator's stated terms. Some collections grant commercial licensing; most do not transfer any IP rights at all.

03.What is the difference between ERC-721 and ERC-1155?

ERC-721 creates one unique token per tokenId, suited for 1-of-1 assets such as certificates or artwork. ERC-1155 manages both fungible and non-fungible tokens in a single contract with batch transfer capability. ERC-1155 batch operations deliver substantial gas savings compared to equivalent ERC-721 transfers at scale, which is why gaming inventories and high-volume NFT systems default to ERC-1155.

04.Are NFTs still relevant in 2025?

Yes, in specific verticals. Art NFTs saw a major collapse in volume from their 2021 peak, but gaming NFTs on ImmutableX generated substantial trading volume in 2024, and tokenized real-world assets on NFT rails reached over 15 billion dollars in total value according to RWA.xyz in 2025. The technology remains sound; the speculative overlay has mostly cleared out.

05.Which blockchain is best for NFTs?

Ethereum holds the majority of NFT trading volume by value and remains the default for high-value transfers according to CoinGecko Research in 2024. ImmutableX specializes in gaming NFTs with zero gas fees for users. Base captured the largest share of NFT minting volume in 2024 for high-volume, low-cost use cases. The right choice depends on your application: trading value, transaction throughput, and target user base each point toward different chains.