We often see the term “ERC-20” in industry media reports, which is a standard protocol on Ethereum. In addition to ERC-20, another protocol on Ethereum that many people have heard of is ERC-721.
Although they have heard of it, many people still don’t understand what these two agreements are and how they should be distinguished. Today, the vernacular blockchain will be sorted out for everyone.
What are ERC-20 and ERC-721?
First of all, let me briefly introduce you what ERC-20 and ERC-721 are.
ERC-20 is the most widely known standard. There is no difference in value in the ERC-20 standard. Tokens are interchangeable. This is equivalent to saying that under the ERC-20 standard, your 100 yuan “money” is the same as mine.
The ERC-20 standard stipulates that Token needs to have its name, symbol, total supply, and other functions including transfer and remittance. The benefit of this standard is that as long as the Token complies with the ERC-20 standard, it will be compatible with the Ethereum wallet. In other words, you can add this Token to your Ethereum wallet, and you can also send it to others through the wallet.
Because of the existence of the ERC-20 standard, it is very simple to issue tokens. Currently, the number of ERC-20 Tokens on Ethereum exceeds 180,000.
Since ERC-20 is so powerful, why is there an extra ERC-721 standard? As mentioned earlier, the ERC-20 standard Token has no difference in value, and it is no longer applicable to some assets that require unique attributes (such as encrypted collectibles and game props).
The ERC-721 standard stipulates that every Token that meets its standard has a unique Token ID. In the ERC-721 standard, each Token is unique. In other words, under the ERC-721 standard, your 100 yuan “money” is different from my 100 yuan “money” because the numbers of the two 100 yuan are different.
How to distinguish ER-20 and ERC-721?
Directly use an example to illustrate. If there is a virtual pet application on the blockchain, there are 100 cats in it. If the Token of this application is developed based on the ERC-20 standard, and we happen to have a cat at the same time, then your cat and mine are the same, and the cat Token can be divided, such as dividing it Divide into 10 shares, then each share is 0.1 Token.
If the Token of this application is developed based on the ERC-721 standard, then your cat and my cat will be different anyway, because our cat ID is different, and the cat as a whole is not allowed Divided and unique.
From this example, we can see two differences between ERC-20 Token and ERC-721 Token:
1. The ERC-20 standard Token has no value distinction and is interchangeable; the ERC-721 standard Token is not interchangeable, and each Token has a unique ID.
2. The ERC-20 standard Token can be divided, while the ERC-721 standard Token cannot be divided.
It is precisely because of the difference between these two standards that they can be applied in different scenarios. If you want to learn more about Ethereum’s standards, you can refer to the previous tweet of the vernacular blockchain “I know you know ERC-20, what about ERC223, 721, 777, 1155”.
ERC-20 and ERC-721 are both a standard protocol issued by Ethereum Token. Tokens issued based on the ERC-20 standard have no difference in value, and can be interchanged and can be divided; Tokens issued based on the ERC-721 standard are not interchangeable. Each Token is unique, unique, and indivisible.
Then friends can think about it, which standard protocol do you think is better for game props, and why? Leave your answer in the comment area.
Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at blockreview.net. Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.