ERC-721 is a standard for creating non-fungible tokens (NFTs) on the Ethereum blockchain. Unlike fungible tokens, which are identical and interchangeable, each ERC-721 token is unique and has its own distinct properties and attributes. This makes ERC-721 tokens ideal for representing assets such as digital art, collectibles, and game items, where uniqueness and authenticity are important.
ERC-721 was proposed by William Entriken, Dieter Shirley, Jacob Evans, and Nastassia Sachs in 2018, and it quickly gained popularity in the NFT space. Today, many of the most valuable and sought-after NFTs, such as CryptoKitties and NBA Top Shot moments, are built on ERC-721.
So, how does ERC-721 work, and how can it benefit the NFT space?
ERC-721 works by defining a set of rules and functions that a smart contract must follow in order to create and manage NFTs. These functions include minting new tokens, transferring ownership of tokens, and querying information about tokens. Because ERC-721 tokens are unique, each token has its own identifier (known as a token ID), which allows it to be easily tracked and authenticated on the blockchain.
One of the key benefits of ERC-721 is that it allows for true ownership and control of NFTs. Because each NFT is unique and verifiable on the blockchain, owners can prove that they are the legitimate owners of a particular asset. This is in contrast to traditional digital assets, which can be easily duplicated or stolen without any way to prove ownership.
Another benefit of ERC-721 is that it enables new forms of digital creativity and expression. Artists, musicians, and other creators can use ERC-721 to create and sell unique digital assets that represent their work. These assets can be anything from digital paintings to music tracks to virtual real estate, and they can be traded on NFT marketplaces like OpenSea and Rarible.
In addition, ERC-721 allows for programmable ownership and royalties. Smart contracts can be programmed to automatically distribute royalties to creators every time their NFT is resold on a secondary market. This creates a new revenue stream for creators and encourages the creation of high-quality, valuable assets.
Finally, ERC-721 can benefit the NFT space by enabling new forms of gaming and virtual worlds. Game developers can use ERC-721 to create unique game items and characters that players can buy, sell, and trade on NFT marketplaces. This creates a new economy within games, where players can earn real money by selling their in-game assets.
In summary, ERC-721 is a standard for creating non-fungible tokens on the Ethereum blockchain. It allows for true ownership and control of digital assets, enables new forms of digital creativity and expression, allows for programmable ownership and royalties, and enables new forms of gaming and virtual worlds. These benefits make ERC-721 a powerful tool for creators, developers, and investors in the NFT space.