Deciphr Academy
Track 3 · Tokens · Module 14

NFTs

Unique tokens: what you own, where the image lives, and the risks.

Lessons
6
Reading
35 min
Quiz
15 questions
Pass mark
80%
  1. 1What makes a token uniqueWhat makes an NFT different from other tokens?5 min
  2. 2Metadata: where the picture livesWhere does an NFT's picture actually live?6 min
  3. 3Minting and marketplacesHow are NFTs created and sold, and what does the buyer really get?6 min
  4. 4RoyaltiesHow do NFT royalties work, and are they always paid?6 min
  5. 5Tickets, memberships and other usesWhat are NFTs used for besides digital art?5 min
  6. 6RisksWhat are the main risks of buying or holding NFTs?7 min

The case used in this module

Each module tells its own made-up Brindlecove story, so details can differ from one module to the next.

Key words

NFT
A non-fungible token: a token that is individually unique, unlike ETH or USDC, where every unit is the same.1
ERC-721
An Ethereum standard for NFTs. Each token is tracked separately, and each token ID has exactly one owner, so a wallet holds none or one of it.2
ERC-1155
A multi-token standard: one contract can hold fungible tokens, NFTs, or a mix.3
Token ID
The number that identifies one NFT inside its contract. With the contract address, it picks out exactly one NFT.2
Metadata
Details about an NFT, such as its name, a description and a link to its image, usually kept in a JSON file.24
tokenURI
An ERC-721 function that gives the address of a token's metadata. ERC-721 lets this address change.2
Off-chain storage
Keeping an NFT's picture somewhere other than the blockchain, with the token pointing to it. Most NFT works are stored this way.5
CID
A content identifier in IPFS: an address made from the content itself, so any change to the file gives a new CID.6
Mint
To create a new NFT by publishing a new token to a blockchain.51
Marketplace
A website for buying and selling NFTs, which usually takes a percentage of each sale.5
Royalty
A share of each resale paid to an NFT's creator. Under ERC-2981, paying it is voluntary for marketplaces.7
Provenance
An item's history, traced through who has owned it, held it and used it.5
Sources
  1. Non-fungible tokens (NFT). ethereum.org, updated 23 June 2026.
  2. ERC-721: Non-Fungible Token Standard. Ethereum Improvement Proposals (Entriken, Shirley, Evans and Sachs), created 24 January 2018.
  3. ERC-1155: Multi Token Standard. Ethereum Improvement Proposals (Radomski, Cooke, Castonguay and others), created 17 June 2018.
  4. Best practices for storing NFT data using IPFS. IPFS Docs, checked 22 October 2026.
  5. Non-Fungible Tokens and Intellectual Property: A Report to Congress. US Patent and Trademark Office and US Copyright Office, March 2024.
  6. Content Identifiers (CIDs). IPFS Docs, checked 22 October 2026.
  7. ERC-2981: NFT Royalty Standard. Ethereum Improvement Proposals (Burks, Morgan, Malone and Seibel), created 15 September 2020.