Token standards: ERC-20 vs. ERC-721 vs. ERC-1155

In Ethereum, developers create smart contracts using standards such as ERC-20, ERC-721, and ERC-1155. The names may seem complicated, but ERC-20 is basically for regular coins, ERC-721 is the standard for NFTs, and ERC-1155 is a multi-token standard. While that sums it up, you are probably looking for a longer answer. So here goes.

First things first, what’s ERC? ERC stands for “Ethereum Request for Comment.” It is essentially a type of standard for contracts. Developers use these standards to create tokens for a specific industry or application.

For instance, if someone creates an ERC-20 token to help users pay for services on the platform, they have created a fungible token to sell to potential investors.

What is the ERC-20 token standard?

ERC-20 is a technical standard used to create smart contract-enabled tokens on Ethereum. It defines the rules and functions that any token of this kind on the Ethereum blockchain must follow. This includes rules for transferring and spending tokens, getting the token balance of an address, and so on.

ERC-20 tokens are digital assets designed to be compatible with the Ethereum ecosystem. They can be traded and exchanged.
This is the most widely used token standard on Ethereum. And it has enabled the creation of a wide range of different tokens for various use cases.

Characteristics of ERC-20 tokens

One of the main characteristics of ERC-20 tokens is their ability to be easily exchanged and traded on the Ethereum network. Their standardization ensures that they can be used across a wide range of different applications and platforms.

ERC-20 tokens are also highly customizable. So developers can create tokens with a wide range of features and functions.
These tokens can be stored in any Ethereum wallet that supports the standard. So they are very accessible.

What is the ERC-721 token standard?

ERC-721 is the token standard for Non-Fungible Tokens (NFTs). This standard includes a number of new features and functions.

Characteristics of ERC-721 tokens

These tokens are unique and rare. So they are unlike any other token that the smart contract issues. They are differently priced from other tokens as well. These tokens are ideal for use on platforms offering collectible items, access keys, tickets, etc. Like other tokens, they can be managed, owned, and traded.

What is the ERC-1155 token standard?

ERC-1155 is a newer token standard that was introduced in 2018. It is more flexible and efficient than the other two token standards because developers can create tokens representing multiple assets. This means a single token can represent multiple assets, such as weapons or armor, in a video game.

ERC-1155 tokens can also be transferred in batches, which reduces the number of transactions.

Characteristics of ERC-1155 tokens

The main characteristics of ERC-1155 tokens include their flexibility and efficiency. Because ERC-1155 tokens can represent multiple types of assets, they are well-suited for use in video games and other applications.

Additionally, they can be transferred in batches. Since this reduces the number of transactions involved, they reduce the load on the network. This feature makes it particularly useful in applications where large numbers of tokens, such as in-game items, have to transfer at once.

Conclusion

With these standards in place, creating a token on the Ethereum network takes a little flair for programming. That’s one of the reasons why so many developers choose to build atop Ethereum. Besides, Ethereum’s stellar track record is a big draw.

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