Standards for Creating Tokens
ERC-20 and ERC-721 are both standards for creating tokens on the Ethereum blockchain, but they serve different purposes and have distinct characteristics. ERC-20 tokens are fungible, meaning each token is identical and interchangeable with every other token in the same contract. They are typically used for creating cryptocurrencies, utility tokens, and other digital assets that require interchangeable units. Standard functions for ERC-20 tokens include returning the total supply of tokens, checking the balance of a specific address, transferring tokens between addresses, and approving withdrawals.
On the other hand, ERC-721 tokens are non-fungible, meaning each token is unique and distinct from every other token. This uniqueness makes ERC-721 tokens ideal for digital collectibles, real estate, art, gaming assets, and other items where individuality and ownership need to be tracked. Standard functions for ERC-721 tokens include checking the number of NFTs owned by an address, identifying the owner of a specific NFT, transferring ownership of an NFT, and managing approvals for transferring NFTs.
In summary, ERC-20 tokens are used for interchangeable, fungible assets like cryptocurrencies, while ERC-721 tokens are used for unique, non-fungible assets like digital collectibles and gaming items.
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