You’ve Heard About NFTs, But What About ERC-721 & ERC-1155?
As the popularity of NFTs continues increasing, the debate surrounding ERC-1155 and ERC-721 has been gathering steam. Although NFTs have functionality that allows for minting on different blockchains, Ethereum has emerged as the preferred open-source blockchain network for developers to create smart contracts and decentralized applications. Ethereum is particularly synonymous with its ERC-721 and ERC-1155 NFT token standards, which are associated with the increasing popularity of NFTs and applications.
Ethereum token standards, also known as Ethereum Request for Comment (ERC), allocate specific functions for the different token types and allow for smooth interactions between applications and smart contracts.
What is an NFT Smart Contract?
A smart contract is a program contained in a blockchain that allows the network to store data indicated in an NFT transaction. Blockchain transaction information is accessible anytime. In addition, the smart contract ensures the stored information is transparent and immutable. The NFT smart contracts are responsible for verifying ownership and handling transferability.
NFTs can also be programmed to do more than just the essential functions by adding extra features. Some of these functionalities include handling royalty payments, connecting to other digital assets, and more. With smart contracts, you can also have permanent identification information. They also prevent NFTs from being split into smaller units for selling.
The other use of smart contracts is to ensure that digital assets have value. The smart contract core includes a series of statements written to the blockchain as a code and operated by a computer network that performs all programmed actions. These actions execute only if the programmed conditions are met and verified.
Standards of NFT Smart Contracts
The term "standard" defines the underlying principles that enable a piece of technology to function without issues. NFT standards build NFT tokens on top of a blockchain protocol. As mentioned, Ethereum was the first blockchain to create and utilize NFTs. Below, let's get a close look at the primary NFT standards driving the market.
The ERC-721 token standard originated to create NFTs and remains the most popular. The standard is free and open source, describing how to create NFTs on Ethereum. Each token is individually unique and often priced independently. Many artists prefer ERC-721 tokens, flexibility, and value the technology offers. In addition, duplication is not possible. In some cases, ERC-721 tokens are indestructible, but only if the smart contract does not include a burn function.
ERC-721 NFTs have revolutionized digital content, including games, art, music, and applications. ERC–721 is at the core of the projects like Decentraland or CryptoKitties.
The ERC-1155 standard allows you to register fungible and non-fungible tokens in one smart contract. It's an upgraded version of the ERC – 721 standard with added functionality. Tokens created with the ERC-1155 standard have the same functions as ERC–20 and ERC–721 tokens. However, the standard parts have improved and are generally more efficient.
The cost of minting or exchanging tokens using the ERC–1155 standard is lower per transaction. ERC–1155 is also more efficient in batch token transfers than other NFT standards. For instance, selling music as an NFT, you can use either ERC–1155 or ERC-721. However, if you sell several editions of your music, the ERC–1155 will help you create several copies of your music.
ERC 721 Standard & ERC 1155 Standard, How Do NFT Smart Contracts Verify Authenticity and Prevent Counterfeiting?
Ethereum NFT smart contracts ensure the validity of every transaction. Including all development processes and launching the token on the blockchain. As such, NFT metadata is traceable, including the address of the wallet and its activity.
Metadata makes it easier to identify the origin of the NFT, track the purchase, and determine the authenticity of the deal. Anyone can view transaction history details on the Ethereum blockchain, which is transparent. With metadata information publically available, it is reducing counterfeiting significantly. This way, it's easier for the owner to prove ownership of an NFT, even if someone tries to copy it.
The different uses of NFT smart contracts
NFT smart contracts have theoretically limitless functionality, including:
An NFT smart contract eliminates the need for a third party in NFT transactions. Smart contracts replace financial intermediaries' additional costs and can give a fee percentage to the NFT creator.
Computer code and transactions are faster and more efficient because it doesn't involve much human effort.
All the wallets, transactions, and ownership are public, keeping the network transparent and open for all.
Since all information is available to the public, it isn't easy to hack transactions.
NFTs smart contracts allow you to create and invest in NFT tokens. ERC-721 and ERC-1155 have all demonstrated themselves to be standards, and which one you choose is a matter of your needs.
NFT transaction information is in the public domain, promoting transparency and reducing fees. However, this doesn't mean that NFTs are 100% secure. With all new technology, scammers are out there, so you should be very careful.
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