For more information like this visit https://learn.rainbow.me/.
Throughout your crypto journey, you may have come across mentions of ERC-20, ERC-721, and ERC-1155 tokens.
In this article, we’ll go over what the differences are among them so you can be best informed!
Decrypt.com posed the question best: as Ethereum’s popularity grew a problem arose on how you get these different contracts to interact with each other. The answer: the ERC-20 token standard which allows for “developers to create their own tokens inside the Ethereum network and allows an easier route for companies to develop blockchain products instead of building their own cryptocurrency.”
From the ERC-20 standard, both ERC-721 and ERC-1155 standards have evolved with each having their own unique description and details.
ERC-20 tokens are fungible and transferable tokens that live on the Ethereum network. A comparable, example of this is how one US dollar is indistinguishable from every other US dollar
Fungible, in this case, means that each token is indistinguishable from every other token in the released set of tokens.
ERC-721 tokens are non-fungible tokens or NFTs. Each NFT token is linked to different owners, making them unique. So, when several tokens are created within a single smart contract, each of them holds a different value of information.
Non-fungible, in this case, means that each token is distinguishable from every other token in the released set of tokens.
ERC-1155 tokens are a type of standard token that has the ability to store, under its control, tokens that can act as if they were a token. But what exactly does this mean? The idea is to create a smart contract that can control any amount of fungible and non-fungible token types.
The ERC-1155 standard improves on ERC-20s and ERC-721s by allowing:
- Mass and secured token transfers
- Multiple tokens on the same contract
- Confirmed token type detection
There are few companies actively using the ERC-1155 standard but you can check the progress on what companies are adopting this standard by checking out https://enj1155.com/