Did you know that CryptoKitties are not ERC-20 like other ethereum-based tokens but an ERC-721? Before you get confused, we will discuss what ERC is and the difference between ERC-20 and ERC-721 tokens.
ERC means Ethereum Request for Comments and is used by ethereum developers. ERC is a set of rules that the developers have to follow so they can implement a token in the ethereum ecosystem. It includes information about the protocol specifications and the description of the contract. Before an ERC become a standard, it has to be revised, commented, and accepted by the community through an Ethereum Improvement Proposal or EIP.
Using these kinds of ERCs or standards will let the wallets and exchanges know everything that it needs to know because ERCs include information.
What about the numbers?
ERC-20 for example, the number 20 there is just a number. It identifies the proposal to the ethereum community.
Many follow the ERC-20 token standard, the technical standard for smart contract, this is of course if it runs on the ethereum blockchain. Having ERC20 tokens means that the type of token follows the “rules” indicated in ERC-20. Using this kind of ethereum token makes it easier for wallets and exchanges to be listed as it already has a standard.
ERC-20 tokens are no different than your regular fiat money. It is fungible, meaning it is not unique. You can trade your ether tokens to another person and you won’t recognize your tokens from theirs. This is the same as other tokens using the ERC-20 standard. You can also keep all your ERC-20 tokens, whatever they may be, in an ERC-20 wallet.
If we want to go deeper, ERC-20 has basic functionalities such as transferring of tokens, obtaining account balances, get the total supply of tokens, and token approvals. It only needs the address of the contract and the number of tokens available.
Your Php 50.00 bill is the same as my Php 50.00 bill. Same as ERC-20 tokens, your 2 ethers has the same value as my 2 ethers.
Since we already got a grasp of what an ERC-20 is, we will now go to ERC-721, the standard that is being used in CryptoKitties and other non-fungible tokens (NFT). If ERC-20 are like fiat money, ERC-721 are for collectibles and digital assets.
An ERC-721 token is non fungible and a standard for gaming decentralized applications.
ERC-721 NFT like CryptoKitties and other cryptoitems are collectibles. This means your CryptoKitty (for example) is non-fungible (unique) and there are no other CryptoKitty just like it (or sometimes just a limited supply). Having a non-fungible token means you can trade it, in CryptoKitties case, you can sell it and get ether; collect digital items. You can see a history of token ownership as well as it gets transferred.
It is reported that Alto.io, together with Singapore’s Cloud Alliance is exploring ERC-721 using Alto’s tools. The partnership will also use Cloud Alliance’s MOO Store, an upcoming in-game items trading platform.
Since ERC-721 are non-fungible tokens and are usually collectibles, think of it like your beloved mint condition Michael Jordan NBA Card that you can trade for a fast-food combo meal to a brand new house and lot.
ERC-20 is more like tokens that are like money and are fungible (not unique). ERC-721 are non-fungible tokens or cryptoitems that are usually collectible. Its value can either go up or go down depending on its rarity.