What is ERC-721 standard?

by in Ethereum 101, Ethereum For Beginners

What is ERC-721 standard?

Nowadays, in the developing environment of cryptocurrencies, most of us have caught about Ethereum and its standards. The leading one is ERC-20, but there’s another impressive model of tokens, which is named ERC-721. The article is dedicated to this class and is going to describe what is ERC-721 and talk about the distinction between ERC-20 and ERC-721..

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Non-fungible tokens (NFT)

The fundamental thing you will need to find out is what non-fungible token is. NFT is a kind of cryptographic token that is connected with something unique. These tokens aren’t interchangeable, and this feature is what differs it from fungible tokens. NFTs are practiced to form verifiable digital deficiency and are often applied in various applications.

All about ERC-721

The general type is ERC-20. These tokens took over 95% of all ICOs in the world. This is explained by the adaptability of cryptocurrencies between each other and with third parties (e.g., exchanges). In contrast to this type, ERC-721 tokens are NF, and they’re mostly applied for digitizing unique assets.

The most substantial part of the ERC-721 functions matches to ERC-20. This is a necessary feature for ERC-721, as there are many daily situations in which token must be applied, for example, you’ll have to store your ERC-721 token in an ordinary crypto wallet, and this would be very hard if ERC-721 differed too much. But, as it’s known as a distinct standard, it has some specific characteristics connected with smart contracts - token ownership function was implemented. There was a need for tracking the movement of every token, as it is unique, and the new function was made for this goal.

The apparent variation between ERC-20 and ERC-721 is their fungibility. So, as ERC-20 is fungible, it’s known as a “money-like” standard. All this type of tokens has just the same value. ERC-721 has a unique token kind. Each of them has its distinctive characteristics.

How the token is created

For building ERC-20 token, the only info you necessitate to find out is how many of them are available. When creating an ERC-721, you must form each token separately, because it’s unique. Using ERC-20 standard will let you generate a batch of 100 or more by attaching the “total supply” parameter, this will not work with ERC-721.

The new function

When you get ERC-20 tokens, all the ownership licenses are listed in the smart contract, and it only includes the information about the number of assets every address has after the transaction, and that’s it. There’s no info about the token itself cause they’re all fungible and all are equivalent.

But in the case of ERC-721, everything changes. Every ERC-721 token has separate value: this is because they are NFTs and are unique. So the primary data in the smart contract wouldn’t be enough, as each of them is diverse, we must know which of them were traded. This function defines a list of token identification numbers that are holding on your address.

Cases when ERC-721 is applied

The main field where ERC-721 is used is collecting. But there’re already various projects who are using this token for different purposes.

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In the WePower project, which supports green energy producers, this kind of tokens represents a certain amount of electricity. Each token has its characteristics: it even differs from the type of produced energy.

In the digital world of Decentraland, ERC-721 token reflects virtual lands. Every site is unique by various properties: from coordinates to topography.

This is just a small part of examples, where the application of ERC-721 token made everything work more accurately. Many of the leading individuals of the crypto environment have a positive attitude about the standard. The founder of Litecoin, Charlie Lee, thinks that ERC-721 has given an opportunity of preventing forgery from valuable goods and is going to ease their transfer without third-parties.

What made the standard popular? CryptoKitties!

The game which made these tokens famous is known as CryptoKitties. It went viral and raised approximately $12 million in investment.

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The name of the standard was created by Dieter Shirley in September 2017, but CryptoKitties became a synonym for ERC-721 in December of the same year. The game became the first to integrate the standard on an enormous scale. The point of the game is to buy crypto kitties, some of them are precious and rare. Then you can just trade, modify, or present them.

After the game became prominently successful, there were various games with pets rising in the sphere. There is even a game known as CryptoCelebrities, the purpose of which was trading celebrities. In this game, the greatest valued celebrity is Vitalik Buterin - the founder of Ethereum.