What is a standard for an NFT (ERC-721, ERC-1155)?

Nowadays, NFTs popularity is increasing and attracts new audiences. Each newbie in web3 can have some difficulties in buying tokens on various platforms, like OpenSea and Rarible. These problems may arise from details in a description of each token.

Above you can find a piece of informations available under the NFT in OpenSea. Beside the contract address, token ID and a blockchain, it is possible to view Token Standard, in this case ERC-721. However, what does it mean and how it impacts on a token?

Fungible vs non-fungible

To understand basics of token standardization, it is crucial to get acquainted with terms fungible and non-fungible.

Easily said, fungible tokens are like a cash. Each 100$ bank note is worth the same, it can be transferred for another 100$.

Non-fungible tokens are like an art. It is not possible to transfer a painting for another painting, like bank notes. Each one is different, what leads to other net worth.

Token standard

Wide variety of tokens has been minted since the beginnings of a web3 era. All of them can be divided basing on different features of a smart contract, metadata, etc.

The simplest division can be implemented by differentiation on fungible and non-fungible tokens.

The most popular blockchain which provides possibility of deployment smart contracts, which leads to minting NFTs is an ethereum.

Ethereum has token standards, which starts with the ERC, it means (ethereum request for comments).

Token standard is a definition of the smart contract and the features which are provided by it. For example ERC-20 standard defines fungible tokens and ERC-721 non-fungible.

ERC-20 provides great flexibility and functionality. Tokens with that standard are like a cryptocurrency, but tied with an ethereum network.

However, one of the most famous standards, ERC-721 defines non-fungible tokens and is focused on registering transaction history. It is extremely helpful to record an ownership in time. ERC-721 tokens have more extended meta data informations than ERC-20 ones.

ERC-1155 as an universal standard

ERC-1155 standard provides an universal solution for connecting both fungible and non-fungible assets in an Ethereum blockchain. With it, user can manage different kind of tokens in a single transactions.

Moreover, ERC-1155 standard can include an infinitive amount of ERC-20 and ERC-721 tokens.

Conclusion

Token standards are like a protocol which defines the features which come from smart contracts and metadata of tokens. There are even differences in methods/functions within the implementation.

Following details of each standard can boost a confidence in seeking NFTs for buying or in creating a new collection.