When Ethereum blockchain was launched, it used the ERC20 token which can be broken down into smaller divisible units. The ERC20 is said to be fungible. This means that Ethereum launched identical coins which can be directly replaced with another of equal value. On the other hand, the ERC-721 is the next generation standard which is considered by many to be a major breakthrough in the crypto and blockchain community.

1. ERC721 Non-Fungible
Blockchain
TokensWhen Ethereum blockchain was launched, it used the ERC20 token which can be broken down
into smaller divisible units. The ERC20 is said to be fungible. This means that Ethereum
launched identical coins which can be directly replaced with another of equal value. On the other
hand, the ERC-721 is the next generation standard which is considered by many to be a major
breakthrough in the crypto and blockchain community.
Ethereum ERC-721
Image source: Pixabay
What is this ERC-721 standard and what makes it so different from ERC20 coins that have been
part of the Ethereum community for a long time? Does the new ERC-721 standard have practical
uses in the real world? This article by Ernesto Lee takes a look at this and more.
The ERC-721 is an open source standard that allows developers to create non-fungible tokens on
the Ethereum network. Prior to the ERC-721, developers only managed to create fungible tokens
on the network.
The ERC-721 token was developed as part of Ethereum’s need to develop applications that
supported ownership and tracking of unique assets.
By the way, ERC is an acronym for Ethereum Request for Comments.
Practical examples and uses of ERC-721
Let’s start this section by looking at fiat money. In the real world, fiat money consists of paper
notes and coins. Paper notes have serial numbers and can be easily tracked by the relevant
authorities. The coins do not have serial numbers, and therefore, cannot be tracked.
The ERC20 standard can be equated to fiat coins as it cannot be tracked. The ERC-721 platform
is like the money notes in that it has a unique token ID.
The first and most successful application of ERC-721 is the game known as Cryptokitties. The
platform sold collectible digital kitties. Each unit is known as a kitty and is completely unique
from the other kitties. It has its own attributes.

2. Like all collectible and rare items, the price of each kitty goes up with time. In a nutshell, the
new ERC standard allows the creation of rare collectible digital items on the Ethereum platform.
Let’s take a look at some of the practical applications of the non-fungible token:
Training and Education
A credential by definition is always attached to a unique individual. ERC20 tokens would not be
valid in the use case of a Certificate, Transcript, or College/University degree by virtue of the
fact that each one is unique. Companies such
as BlockchainTrainingAlliance.com and TechBlue, Inc. have created a platform that stores
credentials on the public and private blockchain. (In full disclosure, I am affiliated with each of
those companies). When a student passes a certification exam or attains a degree, the token is
created and ownership of the token is passed to the certificate or degree holder.
A Non-Fungible Token (NFT) or BTAT (BTA Token) can be created to digitally track a number
of credential facts such as:
The credential attained
Current ownership of the credential
Expiration of the certificate
Date certification attained
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The above list of credentials are stored on the Public Ethereum blockchain. The credential
identification as well as many private details are stored on the private HyperLedger blockchain
network.
This allows the reduction of fraud, waste, and abuse by allowing anyone to validate the
authenticity of the certification or degree by checking the source on
blockchain. It also allows the holder of the credential to own their
permission to entities to get additional information by viewing the
HyperLedger blockchain associated with the public record.
the public Ethereum
own data by giving
private data on the
Art gallery
An art gallery is a collection of paintings. When a painting is bought, a certificate of ownership
is issued to the new buyer.
A Non-Fungible Token (NFT) or deed can be created to digitally track a number of facts such as:
The artist of the painting
Current ownership
Information about the painting
Certificate of ownership
Sales agreement
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3. This allows artists and galleries to protect their artwork from theft and prevent the sale of forged
paintings.
Tracking diamonds
Diamonds are among the most precious stones and gemstones in the world. Diamonds have led
to conflicts mostly in developing nations. The diamonds have been mined to fund some kind of
wars or invasions.
In recent years, the major diamond and mining companies have been developing blockchains
aimed at tracking diamonds from the mine to the shop.
The non-fungible token can be used to individually track each diamond from the mine to the
shop as well in a more efficient manner.
Each diamond is unique and can be represented by a Non-Fungible Token or deed. Each
diamond can have a unique ID and certificate of ownership. This allows buyers to see if the
diamond is authentic and determine if it comes from a conflict-free zone.
Food industry
A food product may be tracked from its production point, processing, middlemen, and up to the
store where it is sold. A Non-fungible token is assigned to the product.
Conclusion
The ERC-721 is a new way to make digital representations of the physical world. If you come to
think of it, housing deeds can be considered to be Non-Fungible tokens.
ERC-721 smart contracts can be created to track the ownership and sale of housing properties. In
the process, middlemen such as lawyers can be taken off the picture resulting in cheaper and
faster transactions.
As more developers and businesses are beginning to understand the importance and value of the
ERC-721 standard, their use is also increasing steadily.
The Cryptokitties project should be applauded for spearheading the adoption of the new standard
which has now evolved from the beta stage to being used extensively in the crypto sphere.
As the blockchain community continue to evolve and learn, so will the ERC-721 protocol.
To a greater extent, the evolution from the ERC20 system to the new ERC platform is a major
boost for the crypto community.
Many new projects rely on Ethereum’s smart contracts to launch their initial coin offerings
(ICOs). The new tokenization standard can take the ICO industry into a new direction.