ERC-721 tokens are the technological backbone of the ever popular Cryptokitties. So what are these tokens? And how do they enable a whole new world of digital collectibles?
In this guide we’ll talk about what gives these tokens value, and how the blockchain can create truly unique virtual assets.
The ERC-721 token standard helps create non-fungible tokens. In many ways, it is pretty similar to ERC-20 in functionality. This similarity exists for two reasons:
Firstly, it is easier for developers to make the transition. Since all ethereum developers are familiar with ERC-20 already, they won’t have to learn a host of new things
It makes life much easier for users who can store these tokens in ordinary wallets and trade them on exchanges.
ERC-721 gains its non-fungible properties by capturing the ownership of that particular token. This is why takeOwnership functions are included in the ERC-721 standard.
The ERC-721 standard defines the following functions: name, symbol, totalSupply, balanceOf, ownerOf, approve, takeOwnership, transfer, tokenOfOwnerByIndex, and tokenMetadata. It also defines two events: Transfer and Approval.
Before we go into individual function discussions, you must know what we mean by the Token Ownership and Token Creation of the ERC-721 functions
When you buy ERC-20 tokens, your rights of ownership will be written in the smart contracts. The smart contract also has data of how much tokens each and every address will have after the deal…and that’s it. The thing is that these contracts don’t need to worry about specific tokens because they are fungible, so they are all the same.
However, the value of one ERC-721 token is not the same as another ERC-721 token because of its non-fungibility. Adding an address and balance to the contract won’t be enough, a token’s unique ownership details also need to be added.
Token Creation in ERC-20 tokens is about the balance of tokens. So, all that you need to do is to set an upper limit and make sure that people cannot create more tokens than the upper limit. When compared to that, ERC-721 token creation is much more complicated. The ERC-721 standard maintains an array of tokens and each and every single token is added to the array separately.