The market is always looking for new investment targets and new implementation scenarios. Judging from the current development of the blockchain industry, NFT is likely to be a door to the future.
Below we will take you to understand what NFT is, what FT is, and several protocols used in NFT. Through this article, you can understand the basic knowledge of NFT. For ordinary developers, this is enough.
What are NFTs?
Fungible Token is a homogeneous, also translated as a token. A conventional token used to describe a certain commodity, with each unit having the same value.
Most of the crypto-assets that have been traded for a long time are fungible tokens, represented by BTC and ETH. In a broad sense, the US dollar is also a Fungible Token. 1 US dollar is always 1 US dollar and can be exchanged at any time, anywhere and between anyone. Even if the serial numbers are different, the replacement will not be affected. The same is true for BTC. There is no difference between one of your Bitcoins and one of mine. If we make a transfer or a currency swap, we only need to pay attention to the number of coins.
NFT (Non Fungible Token) is a non-fungible token, also translated as an irreplaceable token. CryptoKitties represented by the earliest CryptoKitties is a typical representative of non-fungible tokens. Each token is different. You cannot use it to prove that I have a higher value than you if you have three CryptoKitties and I have five CryptoKitties, because each cat has a different value. Maybe one of yours NFT is already worth more than $100,000, but mine may only be worth $10 at the moment.
Since each NFT is different, this attribute can be used as an analogy in life: we all have a set of real estate, but the real estate and the real estate are different, even if it is just one building in a community, each real estate and the cost of the house The relevant information on is also different. Here we can have an initial understanding of NFT, and the historical origin and development of NFT will be discussed below.
Three underlying protocol standards for NFT
In this section, you will know how NFT came about, what standards it is based on, and what are the differences between standards.
The most common non-fungible token standard is ERC721. CryptoKitties, founded in 2017, was once the first star project of NFT. What many people don’t know is that the ERC721 standard was created and released by Dieter Shirley, CTO of the project. . It can be said that Dieter Shirley is one of the founders of NFT. Dieter participated in Bitcoin mining in 2010 and continued to invest in Bitcoin. He was also the chief architect of Flow, a public chain in the NFT field.
ERC721 is also the most commonly used token form in the NFT field. CryptoKitties, a popular game/collectible project that caused congestion on the Ethereum network at the end of 2017, used the 721 protocol.
“Every CryptoKitties is unique”, this was the slogan of the CryptoKitties official website, and it is also the most important feature of NFT. Even if you look at the same cat in the same category, there will be changes in parameters; and these invisible parameters are still non-fungible tokens NFT, not tokens in the traditional sense.
The establishment of the ERC1155 standard is also inseparable from the CTO of the project party, but this time the business of the project party is game development. Witek Radomski is the co-founder & CTO of Enjin.
Enjin is a game developer. The main reason why Enjin CTO Witek Radomski created ERC1155 is that when developing games, game props are required, and multiple props need to be sent to multiple accounts. It is very expensive to call a contract for each send. For example, there is a game with 100,000 daily active users and one million registered users. Each person who upgrades the game will receive a sword. At this time, if you transfer an account to one million people on the blockchain, how much will it cost? Calculated based on the current ordinary transfer fee – ETHgas fee of 2 US dollars, you need to bear a direct fee of 2 million US dollars (about 13 million yuan). This is a big expense for game companies, and the process is cumbersome and the time cycle is long. long.
The birth of ERC1155 has solved similar problems to a certain extent, because this protocol standard has the characteristics of both BFT and FT, and has the characteristics of a semi-fungible token. Compare the ID here with ERC721 The difference is that the ID is no longer an item, but a category (Class). For example, the coats in the collection of game props are a category. When transferring money, set the quantity of coats. In this way, you only need to call the contract once to send multiple quantities of props. For example, each user of the game upgrade mentioned above can send A sword, that’s a category. There is no distinction between tokens in this category.
For a detailed understanding, we can say that there are 100,000 dragon-slaying knives and 5,000 full-moon scimitars in your game service area. When using the ERC1155 protocol, there is no difference between the dragon-slaying knife and the round-moon scimitar. There is no difference between the sword and the full moon scimitar, but there is a difference between the dragon slaying knife and the full moon scimitar. However, in theory, strict NFT should mean that each item is different, so ERC1155 is a semi-fungible token, which is equivalent to a physical semiconductor—between an insulator and a conductor.
It is worth mentioning that ERC1155 can meet the flexible needs in different scenarios, such as transferring a large number of multi-category assets at the same time, or transferring a large amount of the same category of assets, such as 10 coats + 5 hats, which can be completed in one transfer. Greatly improve the speed and convenience of transfer.
This standard is not as common as the above two, so many people have never heard of it. It is called Composable NFTs (abbreviated as CNFT). Its structural design is equivalent to a standardized extension, allowing any NFT to be bundled with other NFTs or FTs. When transferring CNFT, the entire hierarchical structure and ownership relationships owned by CNFT are transferred. To simplify the understanding: ERC-998 can contain multiple tokens in the form of ERC-721 and ERC-20.
This means that a CryptoKitties cat can have homogeneous assets, such as some ETH tokens, or non-homogeneous props, such as this CryptoKitty holding a card or a large amount of gold. Chain, this card or big gold chain is originally an NFT. At this time, you can package everything with one transfer. ERC998 is a commodity that is sold in a “package”.
The above starts with the basic protocol standards and takes you into the world of NFT.