Tokens and NFTs

Tokens are blockchain-native units of value or access. Some are interchangeable, like dollars in a checking account. Others are distinct, like numbered tickets or signed collectibles. That split is the difference between fungible tokens and NFTs.

On Ethereum, standards make these assets predictable for wallets, exchanges, and apps. ERC-20 is the common standard for fungible tokens. ERC-721 is the classic standard for unique NFTs.

If you send someone 1 USDC, it does not matter which exact unit they receive. If you send NFT #842, the exact token matters because its identity is part of its value.

NFTs are not limited to profile pictures. They can represent memberships, event access, in-game items, domain names, or records that need unique ownership. Meanwhile fungible tokens power payments, incentives, and protocol governance.

Once you understand the standards, you can read a wallet more clearly: some assets behave like balances, while others behave like individual objects with their own history.