2.2) ERC-721 & ERC-1155 Token Standards

2.2) ERC721 & ERC1155 - Token Standards

Both ERC-721 and ERC-1155 tokens are non-fungible, meaning that they are completely one-of-a-kind, each representing a unique digital asset stored on the Ethereum blockchain.

These have ben created with the aim of holding and tracking digital assets like JPEGs or videos, but have evolved into real world use cases for managing and transferring tangible assets, such as art, cars, or even real estate. Let us dive into how each standard work and differs from one another.

The ERC-721 token standard kicked off the NFT craze. A revolutionary technology, first of its kind, and consequently, the most popular standard for creating these unique tokens. NFTs have a long history, but along with the ERC-721 token standard, they only truly came to be known with the launch of the Crypto Kitties project by Dapper Labs. The company behind this paradigm change codebase, introduced the standard via an Ethereum Improvement Proposal (EIP) in 2017.

Though new means of utility for these tokens are coming up by the week, some of the remarcable features ERC-721 tokens provide are:

• Indivisibility NFTs have historically been indivisible when it comes to their utility. For example, an event ticket cannot be partially purchased, it must but fully acquired to be owned and used.

• Scarcity NFTs can be scarce, and that's one reason driving their value. Though developers can generate as many assets as they like, it is equally within their power to limit the number of NFT for scarcity.

• Uniqueness NFTs are also unique because no two NFTs are the same — they're not interchangeable. The metadata of each NFT is an unalterable record that gives it the certificate of authenticity.

• Ownership NFTs live on a DLT within an associated account. The original creators of the NFT control the private key of that account where the NFT lives, and they're free to transfer that NFT to any account.

• Transparency Because public distributed ledgers are decentralized and immutable, where records of token issuance, transfer, and activity can be publicly verified, buyers can trust and verify the authenticity of a specific NFT.

• Interoperability NFTs can be traded, purchased, or sold across various DLTs using a decentralized bridge or centralized custodial service.

It is then that a year later, the ERC-1155 token standard was developed and launched by the gaming company Enjin and released in June 2018, initially intended to tackle the shortcomings of both ERC-721 and ERC-20 tokens while keeping gaming logics in mind.