Beginnings can be confusing in the crypto space. Terms like token standards, ERC20, ERC721, and ERC1155 may seem alien at first, but their concepts become simple once you understand their role. Let’s break it down in plain English.
Understanding Blockchain Coins vs Tokens
The story starts with Bitcoin (BTC), the first blockchain network designed for peer-to-peer payments. Similar blockchains like Litecoin (LTC) and Dogecoin (DOGE) followed, each with its native currency called a coin.
Then came Ethereum (ETH), which introduced decentralized applications (dApps) and protocols. While ETH serves as gas for transactions, developers can also create tokens—in-app currencies or digital assets stored on Ethereum without a dedicated blockchain.
👉 Discover how Ethereum tokens revolutionize digital ownership
Key Differences
- Coins: Native to their own blockchain (e.g., BTC, ETH).
- Tokens: Built on existing blockchains (e.g., UNI, LINK).
What Are ERC Token Standards?
Ethereum’s ecosystem relies on community-proposed Ethereum Improvement Proposals (EIPs). A subset of these, called Ethereum Request for Comments (ERC), defines technical standards for tokens, smart contracts, and more.
ERC tokens must adhere to these standards. The most common are:
- ERC-20: Fungible tokens (e.g., stablecoins, UNI).
- ERC-721: Non-fungible tokens (NFTs, e.g., digital art).
- ERC-1155: Semi-fungible tokens (supports multiple token types in one contract).
Deep Dive into ERC Standards
ERC-20: The Fungible Token Standard
- Launch: 2015.
- Use Case: Interchangeable tokens (e.g., 1 UNI = 1 UNI).
- Examples: Stablecoins, governance tokens like Chainlink (LINK).
ERC-721: The Non-Fungible Token Standard
- Use Case: Unique digital assets (e.g., CryptoPunks, Bored Apes).
- Key Feature: Each token has distinct value and metadata.
👉 Explore how NFTs are reshaping digital art
ERC-1155: The Semi-Fungible Token Standard
- Use Case: Mixed token types (e.g., in-game currency + NFT assets).
- Advantage: Single contract for multiple tokens, reducing complexity.
Why Token Standards Matter
- Interoperability: Tokens work seamlessly across dApps.
- Innovation: Enables new use cases (e.g., gaming, DeFi).
- Trust: Auditable smart contracts ensure security.
FAQs
Q: Can ERC-20 tokens be converted to ERC-721?
A: No—they serve different purposes. ERC-20 is fungible; ERC-721 is unique.
Q: Which standard is best for gaming tokens?
A: ERC-1155, as it supports both currency (fungible) and assets (NFTs).
Q: Are ERC tokens only on Ethereum?
A: Primarily, but other blockchains (e.g., Polygon) adopt these standards too.
Final Thoughts
Ethereum’s flexibility in token standards powers endless innovation—from DeFi to NFTs. As blockchain evolves, so will the ways we tokenize value.
🚀 Ready to dive deeper? Check out our School of Block for crypto insights!
### SEO Keywords
- ERC token standards
- Ethereum tokens
- ERC-20 vs ERC-721
- Fungible vs non-fungible tokens
- ERC-1155 explained
- Ethereum blockchain tokens
### Markdown Features
- Hierarchical headings (`#`, `##`, `###`).
- Lists for clarity.
- Bold/italic for emphasis.
- Anchor texts for engagement.