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ERC-721
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The year 2017 saw the emergence of ERC-20, which became the Ethereum token standard and paved the way for a plethora of ICOs. Fast forward to today, ERC-721 has taken center stage by launching countless non-fungible tokens (NFTs).
Initially overshadowed by its more popular counterpart, ERC-20, ERC-721 has now solidified its position as a cornerstone of the Ethereum ecosystem, serving as the foundation for NFTs worth billions of dollars.
What is ERC-721?
ERC-721 is a token standard on the Ethereum blockchain that enables the creation of unique, non-fungible tokens (NFTs). Unlike fungible tokens, such as cryptocurrencies, which are interchangeable and have the same value, each ERC-721 token is distinct and unique. This uniqueness is achieved by assigning a specific identifier to each token, which is stored on the Ethereum blockchain.
One of the primary use cases for ERC-721 tokens is the creation of digital collectibles, such as artwork, gaming items, and virtual real estate. These collectibles can be bought, sold, and traded on various marketplaces and platforms, with ownership and provenance tracked on the blockchain. This makes ERC-721 tokens valuable for creators and collectors alike, as they provide a secure and transparent way to verify ownership and transfer ownership without the need for intermediaries.
ERC-721 tokens are built on top of the Ethereum platform, which means that they benefit from the platform's robust infrastructure, security, and decentralization. They also share many of the same features as other Ethereum-based tokens, such as the ability to program them with smart contracts and interact with them using decentralized applications (dApps).
ERC-721 tokens are distinct from ERC-20 tokens, which are the most widely used token standard on the Ethereum blockchain. ERC-20 tokens are fungible and interchangeable, meaning that each token is the same as every other token of the same type. This makes them ideal for use cases such as cryptocurrencies, where each unit of currency has the same value.
In contrast, ERC-721 tokens are unique and non-interchangeable, which makes them ideal for use cases where each item or asset has a distinct value or identity. They are also more complex than ERC-20 tokens, as they require additional functions to manage ownership and transfers.
Overall, ERC-721 tokens provide a powerful tool for creators, developers, and collectors who are looking to create and trade unique digital assets. As the popularity of NFTs continues to grow, it's likely that we will see even more innovative use cases for ERC-721 tokens in the future.
How are ERC-721 NFTs produced?
ERC-721 tokens are produced by developers who create smart contracts on the Ethereum blockchain. These smart contracts define the rules and functions of the token, including its ownership, transfer, and other properties. The smart contract for an ERC-721 token specifies the unique identifier or token ID, which is used to distinguish each token from all others on the blockchain.
The creation of an ERC-721 NFT begins with the deployment of a smart contract to the Ethereum network. The smart contract contains a set of rules that define the properties of the NFT, such as its name, symbol, and total supply. The developer can also include additional features, such as royalties, which allow them to receive a percentage of any future sales of the NFT.
Once the smart contract is deployed, the developer can begin minting new tokens by calling the "mint" function in the smart contract. This function assigns a new, unique token ID to each newly created NFT. The token ID is a non-repeating, 256-bit number that is generated by the Ethereum blockchain.
After minting, the NFTs can be transferred to other Ethereum addresses. The transfer function in the smart contract is responsible for updating the ownership of the NFT and transferring it from one address to another. The transfer function can be called by the owner of the NFT or by an approved third-party, such as a marketplace or exchange.
ERC-721 tokens can also be burned or destroyed, which removes them from circulation. The burn function in the smart contract removes the NFT from the blockchain, which means that it can no longer be transferred or owned by anyone.
One of the key benefits of ERC-721 tokens is their ability to be easily interoperable with other platforms and applications. Because ERC-721 tokens are built on the Ethereum blockchain, they can be used on any platform or application that supports the Ethereum network. This means that developers can create NFTs that can be used across multiple marketplaces and applications, increasing their value and versatility.
In conclusion, ERC-721 NFTs are produced through the creation of smart contracts on the Ethereum blockchain. These smart contracts define the rules and properties of the NFTs, including their ownership, transfer, and unique identifier. Once minted, ERC-721 NFTs can be transferred, burned, or used on any platform or application that supports the Ethereum network.
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