Ethereum tokens became popular in 2016 – 2017 when they began to be widely used by ICOs to represent usefulness or ownership. Later, in 2017, Ethereum tokens began to be used to represent the assets of the game, such as in the famous cryptocurrencies. While the ERC-20 tokens dominate the ethereal part of the market, for the time being, more and more projects are expected to shift to the new and improved standards.
ERC-721 tokens can be used in any exchange, but their value is due to the uniqueness and rarity of each token. ERC-721 defines some features that give it some compatibility with the ERC20 standard. Similar to the ERC20, the newly proposed ERC-721 standard has opened the door to new smart contracts that act as un-mouldable items.
For example, a virtual work of art in which the work of art is symbolic and the property of the token directly reflects the property of the work, stored in the blockchain.
Like many others, the ERC-721 is a free open standard, describing how to build the tradable Ethereum tokens on the blockchain. While the ERC – 20 runners are fungible, which means that they can be exchanged between themselves, the ERC-721 standards has been used for nonfunctional or “unique” items.
The nonfunctional tokens allow you to detail more about the attributes that make them special – well beyond the name, balance, supply of tokens and symbols. The nonfunctional runners have not been accepted as quickly as some lawyers hoped, partly because the ERC-721 protocol is so new. There are concerns about the fact that the use of nonfunctional tokens could eventually become fragmented, with different standards and different certifications.
Fungibility is the interchangeability of goods or assets with other single goods or assets of the same type.
When you purchase ERC – 20 tokens, your property rights will be written in smart contracts.
In fact, the idea of having ownership in a decentral blockchain makes it particularly suitable for collectors – there is no doubt about the rarity of a particular collection item – there is ( theoretically ) no central control over who owns what, there is no doubt there. However, by framing ERC-721 like non-moldable tokens rather than digital collectors, the standard is very much to track and transfer property.
As more ERC-721 contracts implement more metadata, the question of where images live is becoming important for the nature of applications and decentralized markets.