NFT or Non-Fungible Token is the latest and trending addition of blockchain technology that empowers businesses to do more. Whether automotive, FinTech, insurance, or B2B enterprises, NFT let companies digitize and protect their business-sensitive information. Be it customers' data or your teams' personal details; companies can protect them using NFT and ensure they remain intact.
NFT is a unique type of token created by leveraging the cryptographic hashing method. In addition to this, it also uses the distributed ledger blockchain to link with a unique digital asset that is impossible to replicate. A non-fungible token is way different from cryptocurrencies like Bitcoin in terms of fungibility. NFTs emphasize unique properties and cannot be exchanged or traded with identical tokens. Smart contracts power NFT as they help in storing the unique data that differentiate one NFT from another.
There are several development standards available in NFT that offer different functionality and features to accomplish business goals. Majorly, there are three ERC standards that you need to know before you opt for NFT development services.
ERC-20 is among the most used and vital Ethereum tokens that empower several applications. Developers use ERC-20 for all smart contracts on the robust Ethereum blockchain for token implementation. This standard offers a complete list of rules that Ethereum-based tokens need to follow. This latest standard shares certain similarities with Litecoin, bitcoin, and more.
ERC-20 tokens are blockchain-based digital assets that have value and can be sent and received. The main difference is that instead of executing on their own blockchain, ERC-20 tokens are distributed on the Ethereum network. The Ethereum network has more than 300K active tokens based on the ERC-20 token standard, and the number is surging at a rapid speed.
This robust Ethereum-based token lets developers predict how the newly-formed tokens will operate within the larger Ethereum ecosystem. Furthermore, this NFT standard helps developers as they don't need to initiate this NFT for every new project as long as they follow the defined rules. In addition, ERC-20 ensures superior compatibility among multiple tokens on the Ethereum ecosystem.
In contrast with the ERC-20 token standard, the ERC-721 has a single unique asset without offering interchangeability. This protocol provides representations of personal assets like certifications or tokenization that are impossible to divide into parts. All the robust tokens based on the ERC-721 standard carry data in their personalized smart contracts.
The bespoke-made smart contracts hold the data about ownership and information about the identity of a particular asset. Without even the presence of a fixed rule for generating tokens, ERC-721 offers better standards of transparency about ownership, protection, and immutability. In simple terms, tokens designed with the ERC-721 protocol are non-fungible in their operations.
As of now, ERC721 tokens are primarily used as collectibles, with the idea that every NFT will become more valuable or desirable over time. ERC-721 defines the minimum interface with a smart contract that should be implemented to allow different tokens to be managed, owned, and traded.
ERC-1155 is a critical and performance-driven token standard that sets the basis of multiple NFT use cases. The above ERC-721 is an ideal standard for establishing new assets that you can transfer among cryptocurrency wallets. But, a combination of ERC-721 based NFT tokens is very insufficient and slow.
If anyone is performing trade on multiple things, then a collection of ERC-721 tokens can fall insufficient. In such cases, the ERC-1155 standard can be beneficial. It is also known as the multi-token standard of the next generation as it can drive transforming innovations to create custom NFTs. In addition to this, the ERC-1155 standard also offers support for fungible and non-fungible applications for multiple industries.
Is NFT useful for my business?
With the growing trend of decentralization and concern for data protection, NFT is playing a transforming role. Businesses can protect their information and claim their ownership seamlessly. As customers also seek validation from companies over how they manage their data, these tokens can streamline this challenge. Be it managing insurance data or managing large teams' information in a decentralized way, NFT saves both time and resources. So, adopting NFT applications for your business makes your company future-ready and open for higher agility.
Get NFT development services with Seven Bits
Seven Bits is a leading blockchain development company that caters to all your custom requirements with robust technologies. Our NFT development services streamline all your complex business data management challenges with ease. Get in touch with our Blockchain Center of Excellence (CoE) team at firstname.lastname@example.org to know more.