Technologies & Concepts

Learn about the technologies and concepts on which SSI is based.

Technical Perspective

Understanding NFTs from a technological perspective requires the understanding of a few core concepts:

• Registries, typically blockchains, which serve as a shared and trusted record of information. They serve as a “layer of trust” and a “single source of truth”.

• Cryptographic keys, which convey control over NFTs and enable other crucial functionality such as authentication.

• Token IDs, which are used to distinguish NFTs on a blockchain such that each token ID is linked to a unique address (establishing a public key infrastructure) and to metadata. This way different parties can easily find and interact with each other as well as benefit from blockchains’ unique properties like immutability.

• Metadata, which can be anything like a piece of digital art or a digital representation of a physical asset. Importantly, metadata can be stored on-chain or off-chain.

• Smart contracts, which can be thought of as the programs or apps that run on a blockchain and are responsible for minting NFTs.

• Wallets, which are used to store keys or potentially even metadata. Also, they enable the management and sharing of NFTs via easy-to-use applications.

Illustration of main technical concepts related to NFTs:

One can think of these core concepts as different building blocks that are available in different variations and can be put together in different ways. For example:

Different blockchains (or other distributed ledger technologies) can be used to establish Registries (e.g. Ethereum, Polygon, Solana, Avalanche, Polkadot, Tezos, IOTA). Similarly, NFT metadata can be stored in different ways such as on blockchains, other distributed data storage protocols (e.g. IPFS, filecoin) or even traditional databases. Similarly, different smart contract development standards with different strengths and weaknesses can be used (e.g. ERC-721 or ERC-1155 for EVM compatible chains like Ethereum).

As a result, there are many different “flavors” of NFTs depending on which variations of which building blocks have been used and how they have been put together.