Disclosure of differences: ERC20 Vs. ERC721-

As initial coin products or ICOs began to use them to represent ownership or value, Ethereum tokens became popular in 2016 and 2017.Ethereum tokens were later used to represent in-game assets in 2017, for example in popular games Encrypted cat.

One of the most prominent aspects of tokens is their trading potential. For example, if you buy a token, you will definitely try to exchange it for another valuable token or ether. Therefore, the standardization of tokens is of utmost importance, which is why the Ethereum Call for Comments (ERC) was created. ERC is an open public mechanism inspired by the famous Internet Request for Comment (RFC). The RFC allows anyone to create and comment on proposals that define Ethereum smart contracts and tokens. This is different from the Ethereum Improvement Proposal (EIP), which focuses on the Ethereum protocol.

ERC20 and ERC721 are the two most widely used ERC token specifications. They are used to symbolize fungible and irreplaceable assets, respectively. This article will focus on the structure of ERC20 and ERC721 tokens, and discuss the different factors between ERC20 and ERC721 tokens, including their working principles.

Fungible and non-fungible tokens: an overview

Familiarity with the concept of fungibility in economics may help to understand fungible and non-fungible tokens.The only difference is Crypto token Communicate their fungibility through coding scripts.

Fungible assets or tokens are non-unique and divisible. For example, the US dollar as legal tender is fungible. Bitcoin is another example of a fungible token, but in cryptocurrency, 1 BTC is worth 1 BTC, no matter where it is issued.

On the other hand, the indivisible and unique token symbolizes Irreplaceable tokensThey can be regarded as a form of contract or ownership of unique, non-reproducible items. For example, a domain name is an irreplaceable asset, because due to its unique aspects, it is impossible to have another domain name of the same type. Therefore, an irreplaceable token represents a single, unique and indivisible entity, whether physical or non-material, such as intellectual property or photos.

The core technology that can easily verify and verify the ownership details of intangible digital objects may be Blockchain technologyThe key difference between fungible assets and non-fungible assets is the information they contain. Non-fungible tokens store data, such as academic titles or artworks-however, fungible tokens, such as Bitcoin, can store value.

Ethereum crypto assets

Assets in the Ethereum encryption field are also divided into replaceable and irreplaceable assets.

ERC20 tokens are used to represent fungible assets. For example, these tokens represent project ownership, service certificates, pledge tokens, or governance tokens. In contrast, ERC721 tokens represent irreplaceable assets. Currently, the only prominent application of ERC721 tokens is game assets. For example, CryptoKitties is a game where you can collect and breed virtual or digital kittens. A unique ERC721 token represents these kittens in the game. In addition, ERC721 tokens can be used to tokenize real-world assets (such as your house) in the future.

This Ethereum blockchain No distinction is made between ERC20 and ERC721 tokens.Instead, the token is just built on Smart contract On Ethereum, it can be regarded as a “coin in a coin”.

Therefore, before delving into the ERC20 and ERC721 standards, it is important to realize that tokens are stored in smart contracts, and smart contracts are stored on the Ethereum blockchain. Smart contracts are manually coded, and each variable is assigned a specific meaning during the scripting process.

So far, we have discussed the ERC20 and ERC721 standards at a general level, but in the following sections, we will delve into these standards and understand how they work.

Understanding ERC20

ERC20 was developed by Fabian Vogelstellar in 2015. The main task of ERC20 is to provide a unified application programming interface (API) for the tokens in the smart contract. Therefore, ERC20 serves as the standard set of rules for the Ethereum blockchain. It follows a series of regulations regarding the exchange, movement or sharing of new tokens to cryptocurrency wallets.

In addition, the API of the smart contract is described in ERC20, not its implementation. Therefore, when you have a smart contract, you will have a function called a code group. The interface explains in advance what the function of the smart contract should be. Then comes the realization that takes place on the backend. The actual code of these routines can be seen here.

The following are the ERC20 token standards:

• Token name
• Decimal (up to 18)
• Symbol
• Transfer
• Balance
• Total supply
• Transfer from
• approve
• allowance

Standards: Token name, decimal system and symbol are optional, while the rest of the standards are indispensable. For example, the “transfer” function is essential for ERC20 tokens, and this is what the “transfer and transfer” function needs. Token owners identified by their Ethereum address can use the transfer function to transfer tokens to another Ethereum address. In order to transfer tokens on behalf of the owner, the “transfer from” function is used in conjunction with a third-party Ethereum address.

Understanding ERC721

CryptoKitties is a popular game that implemented the ERC721 standard at the end of 2017. As mentioned earlier, the participants of the game collect virtual kittens, and each kitten is represented by an ERC721 token.

So, what is the difference between ERC20 tokens and other tokens? ERC721 tokens represent a type of asset, while ERC20 tokens represent a specific type of asset. In the CryptoKitties example, the ERC721 token contract represents all the unique cats in the game and who owns them.

Compared with ERC20, ERC721 simplifies ownership: Participants either fully own the assets or do not fully own the assets. For example, in CryptoKitties, having a “half kitten” is not feasible. Therefore, ERC721 tokens are referred to as the standard for non-fungible assets. This is one of the key aspects of the ERC721 standard to understand. However, the rest of the standards, especially in terms of token transfer, are more or less similar to the ERC20 standard.

Related threats

The main reason for the introduction of the ERC721 standard is to solve the key challenge of transferring multiple assets without increasing operating costs.

In terms of vulnerabilities, ERC20 tokens may be lost when transferred to other wallets or smart contracts that do not support ERC20 tokens. In order to solve this problem, the ERC223 and ERC777 standards were designed.

There are various differences between the two standards, each of which provides consumers with unique things. Therefore, despite obstacles, they continue to push for progress.

Briefly explain the difference

We have discussed in detail the differences between the two standards. But before concluding our discussion, let us summarize:

• The main difference between ERC20 and ERC721 tokens is that the former is a fungible token, while the latter is an irreplaceable token.
• ERC20 tokens are fungible and represent a single entity, while ERC721 tokens represent a collection of assets. In addition, ERC721 is indivisible.
• CrytoKitties is a remarkable example of obtaining full ownership of a virtual cat, which is unique and cannot be shared with any other players.
• The game is rapidly gaining attention, so that blockchain games may be more widely accepted in the future.
• ERC20 tokens can be divided in many ways. Even 0.1% of tokens can be shared.

in conclusion

The ERC20 and ERC721 token standards are just the beginning of an inclusive and efficient digital environment. Since the development of token standards is much faster, the rapid development of blockchain technology in the future will not be shocking.

If you are familiar with the term NFT, you probably know that fungibility is a major issue. But this is only one of the functions of the system. Because it is not always possible to deal with a single, eccentric identity. Sometimes, you are working on duplicates, duplicates, or completely similar items.So it’s not just about The best NFT token; It’s much more than that. It also involves managing ICOs, crowdfunding, and introducing additional cryptocurrencies to the market. All these applications require a certain level of functionality and adhere to strict standards.

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