What are non-fungible tokens?
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What are non-fungible tokens?
This article will explain what a non-fungible token (ERC-721) is, how it works, what changes it brings, and how important it is.
What are non-fungible tokens?
"Homogeneous" means that objects are indistinguishable and interchangeable. In the field of cryptocurrency, "homogeneous tokens" means that each token is not unique, and they are interchangeable with each other. At present, most of the tokens are homogeneous, which is convenient for everyone to exchange, as a unit of measurement, or as a store of value. They are like US dollars, and there is no difference between your one dollar and someone else's one dollar. However, tokens that are unique or have unique value are rarely seen.
Like Bitcoin, Ethereum, and tokens issued by large-scale projects, they are all homogeneous. But you can imagine that if one day these homogeneous currencies or tokens can be marked and tracked how they are used in a series of illegal activities, then the value of cryptocurrencies will be revalued. Still, fungibility remains the norm for cryptocurrencies today.
"Non-homogeneous tokens" means that each token is unique and they are different from each other. Like the limited-edition baseball cards, each card is not just an ordinary symbol or symbol, but has its own characteristics, resulting in unique value.
How is heterogeneity achieved?
Currently, most non-fungible tokens are based on Ethereum's ERC-721 interface. ERC-721 is one of the most commonly used interfaces, and we will focus on it here.
Similar to ERC-20, ERC-721 defines a series of functions and properties for the management, ownership and transaction of smart contracts. The following code lists the requirements for ERC-721:
For more details about these functions, you can refer to the official documentation of Ethereum:
(https://github.com/ethereum/EIPs/blob/master/EIPS/eip-721.md). Most importantly here, ERC-721 defines the standard for the creation and trading of non-fungible tokens.
What changes will non-fungible tokens bring?
The emergence of non-homogeneous tokens means that digital goods can be scarce, and this scarcity does not need to be verified by a centralized institution. For example, we often create our own unique characters in games, which are scarce, but we have to rely on game developers to ensure this scarcity.
In this case, the blockchain can play a huge role. It uses a decentralized method to ensure the scarcity of virtual items.
People have been talking about non-fungible tokens a lot lately, hoping to explore various possibilities in the future. For example, the virtual collectibles industry has begun to widely use non-homogeneous tokens to represent the digital identities of some physical objects, such as Doudou dolls and baseball cards. Alternatively, non-fungible tokens can be used to represent real-life property, such as a unique piece of art or a house.
existing projects
Although ERC-721 has just been released, there are already several excellent projects using this standard. CryptoKitties is a virtual collectible game that allows players to breed and trade cats.
The official website of the project introduces this game like this: CryptoKitties is full of all kinds of small animals that can be nurtured, collected, and admired. Every CryptoKitties is unique and 100% owned by you. It cannot be copied, taken away, or destroyed.
The CryptoKitties game was a nice innovation (and easy to understand), so it attracted a lot of attention, and people began to pay attention to the field of virtual collections.
Collectibles have attracted much attention throughout human history, and people have invested countless hours and money into them, such as Beanie figures, baseball cards, Pokemon, and so on. Time has proved that human beings have the nature of collecting, and collecting is a very common behavior.
The Decentraland game provides a virtual world where players can buy or develop their own land in a limited space.
On the surface, Decentraland has not made obvious improvements, but the meaning behind this brand new way of playing is far-reaching. "Second Life" (Second Life) is also a very popular game. It is very similar to many features of Decentraland. It allows players to create and modify their own space in virtual reality, and gives you the right to own and use it. .
Summarize
This style of play is very popular. We can imagine that games of the Decentraland type have outlined a blueprint on which more multiplayer games can be launched in the future.
