The world of cryptocurrencies is big and wide. Many of us get confused on the way when trying to make sense of all the terms around. Well, if you are still a little bit lost when talking about tokens, Guarda is here to help you understand. Our main goal is for each and every one of you to stop demonising blockchain and get familiar with everything that lives and prospers on it! Let’s start with our handy guide on ERC721 tokens.
What are the cryptocurrency tokens?
Before with start with the details, let’s be clear with what tokens are. On the Ethereum blockchain, tokens are a part of a “contract”. Basically, a token in an entry to the said contract. A holder, in this case, gets recorded and officially takes part in the contract on Ethereum blockchain.
Ok, but then what are there weird letters and numbers — ERC20, ERC721 and so on? These are standards — the set of numbers and letters signifies that the token you are looking at gives a response to the particular commands. Any ERC20 token behaves the same way as any other ERC20 token, they are structurally the same. Nothing special in these formulas, as you can see.
What are ERC721 tokens?
ERC721 type is a little bit more developed than ERC20. Each token of this kind is unique and they often are used as collectables. Did you collect toy cars of Pokemon cards as a kid? If you have, then you get what ERC721 tokens are.
Some of you might have hard about the Ethereum-based game CryptoKitties. Basically, the players breed, sell and manage digital cats. The digital animals, for sure, are unique, allergy-free, cute and very collectable — this is the key to success. People love collecting different sorts of things. Also, collecting digital cats is much easier than the live ones, just saying.
Uniqueness in the main feature of ERC721 tokens that makes them non-fungible (a.k.a one part cannot be replaced by another equal part). The fact that ERC721 are one-of-a-kind mean that the tokens can be used on any exchange, but the value of each token is defined with its rareness and characteristics. Some of the defining functions are a name, symbol, total supply, owner etc…
Creating ERC721 tokens
When you need to create an ERC20 token, all you need to know is the token supply (besides the name, of course). When it comes to ERC721, the story is more complicated — you actually need to create and design each token separately. Same story with adding to the supply: a new batch of ERC20 tokens gets made with adding to the total supply, while a new portion of ERC721 requires you to add each separate unit to the pack (by hand!).
ERC20 vs. ERC721
Let’s put everything we have been talking about in this article in short terms. The main difference between these two types of cryptocurrency tokens is fungibility.
ERC20 are the money-type tokens. All the tokens are equal and interchangeable. Imagine the real-world money. 1 UK pound is equal to another 1 UK pound, right?
ERC721 are the asset type. Each token is unique and has distinct characteristics. There is a black Crypto Kitty and a white Crypto Kitty. They are different.
ERC721 use cases
The main purpose of the tokens is being a part of somebody’s collection. Some projects, however, break away from this idea and start using ERC721 as a way to represent real-world assets. WePower (a platform supporting renewable energy production), for instance, uses tokens to act as a certain amount of electricity. Crypto Kitties, that were mentioned previously, became the first ERC721 application on such a massive scale. Afterwards, even crypto puppies and other crypto pets were created. As you can see, the majority of use cases are still somehow connected to unique collectable items and their utilisation.
ERC721 on Guarda
Guarda, a company focusing on lightweight cryptocurrency wallets and other blockchain-related products, welcomed tokens to its life earlier this year. First of all, the Token Generator was released. The Generator is the tool to help users easily make ERC20 tokens.
ERC20 is sure great to help your business and reward the customers, but what about all the fun? It’s Christmas time, after all!
Now, you can make your own winterish collection — get your unique ERC721 tokens with Guarda and unlock some special features in the new Guarda products!
All you need to do to participate in the airdrop is retweet a post from our Twitter page, answer some simple questions on the Google form and get your tokens (exactly guys, it’s free — it’s a Christmas present for all of you).
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