What is ERC-721?  Understand the pattern that separates cryptocurrencies from NFTs created on Ethereum

What is ERC-721? Understand the pattern that separates cryptocurrencies from NFTs created on Ethereum

While ERC-20 is the etherium token standard for launching thousands of initial coin offerings (or ICOs), ERC-721 launched thousands of non-fungible tokens (or NFTs). The once lesser known cousin of the ERC-20, the ERC-721, has become the mainstay of the Etherium ecosystem, serving as the basis for billions of dollars in NFTs.

Blockchains are revolutionary because, for the first time, any kind of value can be controlled by a computer program. Prior to the ERC-721 token standards, most tokens on the blockchain acted as either a currency, a store of value (like gold), or a form of stock or equity.

With the ERC-721, it’s easy to create tokens that can be linked to verifiable, cryptographically unique and unique content, from art to music to sneakers.

What is ERC-721?

The ERC-721 is first and foremost a kind of standard: a model or format that other developers agree to follow. Developers follow the same standards because they make code programming easier, predictable, and reusable.

These standards are entirely optional, but adhering to widely used standards indicates compatibility with a wide variety of applications, including exchanges, decentralized applications (or DAPs), and wallets.

ERC-721 is the Ethereum token standard for NFTs. The word “fungible” means “interchangeable” and “interchangeable”. Bitcoin (BTC) is fungal because any bitcoin can be exchanged for another bitcoin. However, each NFT is completely unique. One NFT cannot replace another.

Who invented the ERC-721?

The initial ERC-721 details were submitted by Dieter Shirley as an Etherium Improvement Proposal (or EIP), which is in the process of introducing new standards into the network.

Anyone can submit an EIP, but go through a review and revision process before being accepted by the community. Once accepted, EIP becomes a request for comments on Ethereum (or ERC), which is a standard for applications on Ethereum. The authors of the ERC-721 standard are William Antriken, Dieter Shirley, Jacob Evans, and Nastasia Sax.

The old NFT CryptoKitties project adheres to ERC-721 standards. The kitty collectible card game used the beta version of the ERC-721 before the standard was set.

A brief history of the ERC-721 standard

– September 2017: Dieter Shirley Introduces EIP-721

– December 2017: CryptoKitties became so popular that they crowded the Etherium network, which foolishly slowed them down.

– December 2017: NFT OpenSea Market Launch – By 2022, it is the largest in the industry, recording मासिक 5 billion in monthly sales.

– June 2018: ERC-721 is accepted as “final”, meaning there is widespread consensus among Ethereum developers to accept it as standard.

– May 2019: Nike applies and obtains patents using the ERC-721 standard.

– February 2020: Venture world, developed using standard ERC-721 NFTs representing virtual terrain and objects, projection of Descentraland.

– March 2021: Beeple’s “EVERYDAYS: The First 5,000” sells for .3 69.3 million at Christie’s auction house.

– December 2021: 2021 NFT sales reach 25 billion.

What is special about ERC-721?

The main feature of the ERC-721 token is that each of them is unique. When an ERC-721 token is created, it contains only one. These NFTs spread unique property ideas and applications on Ethereum.

In the past, ERC-721 tokens were also known as “deeds” (or deeds), because owning an ERC-721 means that the holder has the rights to that token and what it represents.

However, the authors of ERC-721 decided to use the term “non-fungible token” for ERC-721 tokens because the word “deed” was very close to ownership and there are several possible implementations of NFT.

How are ERC-721 standard NFTs made?

A token is a separate agreement or piece of code on Etherium. An ERC-721 token piece of code is created by programming with a standalone contract programming language, such as Solidarity, which follows the same model or codebase.

When the basic model is followed, it is possible to decide on the unique details of the token creation, such as the manufacturer, token name, symbol, etc. It is possible to program additional functionality in your NFT, but the real fun is how the NFT interacts with other separate agreements.

How to get ERC-721 standard NFTs?

Buying and storing NFTs has never been easier. Since the craze for NFT began in 2021, dozens of NFT markets and thousands of NFT projects have sprung up.

In addition to the ERC-721, other token standards, such as the ERC-1155, support NFT. However, most NFT buyers are more interested in NFT than the token-making standard.

To purchase your own NFT, simply enter the well-known NFT marketplace like OpenSea and Rarible. Connect an Ethereum wallet like a metamask and search until you find the NFT you love and fit in your pocket. To purchase NFT, make sure you have enough ETH in your wallet and follow the on-screen instructions.

All major markets have intuitive user interfaces that make it easy to purchase NFT with just a few clicks. Also, most Ethereum compatible wallets support ERC-721 standards. When you buy NFT, you are the right owner and no one can take it away or steal from you!

To store your NFT, you’ll need an Etherium wallet, whether it’s a software wallet or a hardware wallet like Metamask.

What to do with ERC-721 standard NFT?

Currently, the most common case for NFTs is digital art. Users buy the property for a variety of reasons, including supporting artists, as long-term investments in anticipation of price increases, trading NFTs quickly to make a profit, or simply because they appreciate art.

But the cases used for NFTs go beyond art.

NFTs are commonly used in blockchain-powered games such as Gods Unchained, which represents a unique asset in the game. Online trading card play uses NFTs that represent digital cards that can then be traded to other players or used in battles.

Some blockchain games allow you to move items in different games. This is the beginning of Metavers – a continuous, virtual environment where NFTs represent digital objects that can be transferred between different platforms.

Music NFTs are also becoming increasingly popular. Platforms like Audius make it easy for artists to create their work in the form of ERC-721 tokens.

Real-world use cases are also emerging. For example, the ability to issue deeds in your home as an NFT to make real estate transactions more efficient. You can also use NFT to represent high-value property ownership, such as the Rolex watch.

The future of NFTs and ERC-721 tokens is part of the same story, but not exactly the same.

The ERC-721 was Ethereum’s first NFT token standard. This paved the way for the spread and use of NFTs that exist today. Since 2017, when the ERC-721 was introduced, other NFT compliant token standards have emerged, such as the ERC-1155.

The purpose of these new standards is to address some of the major challenges surrounding ERC-721 tokens. For example, the ERC-721 has limited functionality when it comes to interacting with other standards, such as the ERC-20.

Also, ERC-721 tokens take up a lot of space on the blockchain. Thus, they can cause network congestion, resulting in higher transaction fees which can make their acquisition extremely expensive.

ERC-721 will be the future of NFTs, he said. While not the best use case for games and art, it can offer use cases at the intersection of blockchain and real-world assets such as assets, digital identities, objects, and more.

Etherium is not the only blockchain to support NFTs. Other standalone contract blockchains such as the BNB chain and Avalanche have emerged in recent years, hosting their own NFT. Thus, new token standards based on ERC-721 emerged, such as the BEP-721, BNB chain, and SNIP-721, from the Secret Network.

Still, the ERC-721 is fully functional, helping token anything from a person’s birth certificate to rare items in property, art or video games.

The most exciting proposal would be to see how ERC-721 tokens can be used in separate agreements to create completely new ways of doing business and business models.

NFTs and ERC-721 are still in their infancy. NFTs offer the ability to tokenize anything unique and to prove ownership using blockchain technology. This is a powerful concept and can still be explored. The future of NFT is limited to our ability to find new use cases for this technology.

* Translated by Daniela Pereira do Nascimento with permission of decrypt.co.

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