As blockchain technology makes its way into different fields and industries, it seems that the advances involving these digital tools only go further, for a completely futuristic approach to the international market.
If you are fond of Blockchain and the crypto economy, surely you understand the function and potential that digital tokens can offer the world. From creating new cryptocurrencies to supporting completely unique products within the blockchain. With this in mind, the ERC-721 Tokens arrive on the Ethereum network to completely change its operation, revolutionizing the sector of free edition objects.mitada under the standard of a non-fungible token or NFT. In this article we tell you everything you need to know about ERC-721 tokens.
Origin of ERC-721 tokens
We know that the popularization of NFT assets is a trend that cannot be denied, and every day there seem to be hundreds of new projects that come onto the market that involve this type of technology, especially for those projects that want to market unique and collectible assets, while being able to ensure and support their authenticity.
This is how ERC-721 tokens were born, as a standard token for non-fungible tokens (NFTs) specifically developed within the Ethereum blockchain. Although its popularity has increased since 2020, after the first auction of an NFT, this type of token dates back to 2018, developed as a way to encourage the representation of digital assets of collectible works and pieces of art.
ERC-721 tokens can be fully described as a way to develop NFT assets, which contain a unique value that cannot be split or split, built on the blockchain. Ethereum.
ERC-721 Tokens They are mainly characterized because unlike ERC-20 tokens, they retain their unique value and cannot be exchanged, therefore, they are ideal for the representation of unique and valuable objects, whose value is tied to its rarity and authenticity, which makes it unique in its entire existence.
In other words, we can say that an ERC-721 token works like a physical asset, it cannot be divided or shared, since its value lies entirely in its integrity. This has made this type of token really attractive for those who implement collector projects, and there are even entire ecosystems based solely on these tokens.
How do ERC-721 tokens work?
As we have previously discussed, ERC-721 Tokens run within the Ethereum network. Each of the tokens is uniquely and exclusively identified, through the operation of an intelligent contract that is responsible for keeping a record of all tokens andmitidos and their owners.
To create an ERC-721 token, first, you emite a unique identifier, assigned to the original owner. Subsequently, the owner can trade the token through any type of transaction within the assigned chain. The smart contract is in charge of enforcing all the terms, as well as ensuring the authenticity of the asset, so that it can have a single owner.
On the other hand, one of the functions that characterize ERC-721 tokens is that they have the ability to implement functions to create variations of a collection object, however, the original object retains its shape and owner verification.
Characteristics of ERC-721 Tokens
While ERC-721 Tokens have quite specific functions, there are a number of main features that set them apart from any other type of token. Among these we can name:
– Non-expendable: This is its main utility, ERC-721 tokens are unique and unrepeatable, so they cannot be divided or divided.
– Access to DApps: all ERC-721 tokens have a name and a defined symbol that allows them tomitand have access to the different DApps.
– Infinite possibilities: ERC-721 tokens can represent anything from digital art assets to real estate, as well as be implemented within games and apps.
– Custom Smart Contracts: One of the main advantages of ERC-721 tokens is that the logistics of their smart contracts can be customized to define specific rules for the transaction and ownership of the asset.
– Interoperability: ERC-721 tokens have compatibility features with other Ethereum applications and smart contracts, which makes it easy to implement them in different projects.
ERC-20 vs ERC-721: Which is better?
The ERC-721 and ERC-20 Tokens have differential characteristics, and their purpose is completely different within an ecosystem. It is not possible to say which of these two is better, since its purpose and application is based on the type of smart contract.
If we talk about ERC-20 Tokens, an ideal type of token for those projects whose number of tokens is too high, and requires obtaining greater market liquidity. At the same time, they are recommended for ICO projects for crypto-finance.
Now, if we focus on ERC-721 tokens, these are ideal for projects that require a high security function, as well as authentication of each of the assets. ERC-721 Tokens focus on trading unique, non-fungible items with their own value and a certain rarity.
Each one has extensive advantages, however, it is important to remember that the two types of tokens implement specific uses depending on the project.
Currently, ERC-721 tokens They have become enormously popular thanks to the tokenization process, since the different industries globally have begun to take sides within the chain of blocks, and intend to exploit their benefits as far as possible.
One of the most popular uses for ERC-721 tokens is the real estate market. Now that globalization has reached a new level, Thanks to this type of tokens, investors can be part of the commercial world of Real Estate without the need to take a plane or leave home. All thanks to the convenience of ERC-72 tokens.