ERC721 NFT (Ethereum)

Features of the ERC721 token standard

This feature is coming soon to the FlexSmart platform! Until then, you can always click here to talk with a Smart Contract Creation Expert who can help with creation and implementation of NFT's.

If you thought that the fast success and earth-spanning influence of Ethereum’s ERC20 token standard was destined to be the organization’s only major contribution to the modern technological era, the ERC721 token fast proved otherwise. This standard delineates the basic functionality required to track and transfer non-fungible tokens, otherwise known as NFT’s.

Non-fungible indicates that the value of a token cannot be systematically related to the value of any other token, even if it is identical in manifestation. Beyond that, NFT’s are unique and publicly verified assets, even when they are issued in quantity as part of a series or collection. It is this property of the protocol that has made them interesting to practically every market on the planet, from real estate to gaming, sports, restaurants and medicine--and everything beside and between. An NFT carries an indelible record of its author and owner on a blockchain… and almost all of them are tied to the Ethereum framework by means of the ERC721 standard.

This is now a twenty billion dollar market, and the staggering numbers associated with the phenomenon aren’t generated just from investment tallies; the value of signature assets (particularly art) in the NFT marketplace have reached far into eight figures. More significant than the scale of its economy though is the fact that NFT’s are moving the very concept of ownership into a new paradigm altogether. The boggling complexity inherent to the traditional maze of records, titles, patents and certificates--and the mountains of documents associated with them--has been waiting for a streamlined mechanism to unify the whole space.

This is precisely what the ERC721 token offers. In a single, sweeping gesture, Ethereum revolutionized the process of proving that someone owns something. More than that, the standard has features that allow that owner to collect a fee any time an asset is used or sold, without recourse to the lawyers, accountants and customer service personnel who are ordinarily required to legitimize and enforce the transaction. If you don’t immediately see the value of this, take a look at the way BMI and ASCAP police the rights to music sales and distribution. These organizations are hated by artists and fans alike. They employ an army of people to make certain that money and melody sing in sync, and they are overpaid by everyone else to do it.

Another example is real estate title insurance. Housing is a huge business (the biggest financial domain by far), and every paid participant in its transactions gets a whopping cut. Title companies extract two thousand dollars on the sale of an average home for doing nothing more than verifying that the home is legal to sell. A dwelling with an NFT record of ownership can be quickly demonstrated by anyone with internet access to be the property of its seller--at no cost to anyone involved.

For all that it offers, the ERC21 token standard is a surprisingly spare specification. It does not even include functions for minting or burning tokens. The developers at Ethereum foresaw that the standard would be employed in a very diverse array of situations and decided to leave those procedures open to any implementation. This could eventually be seen as its most crucial characteristic as the business models built on the technology are innovating into completely unplanned territories.

Ethereum was very particular about one thing though; scalability. The original ERC20 token was burdened by a conservative functional scheme that made it difficult to employ in scenarios that involve large quantities of different token types, especially on their proof-of-work consensus platform. This time they conducted several tests to verify the programming wouldn’t bottleneck in that situation or provoke huge gas fees. This is quite important, because every NFT is a singular entity. They have proliferated into the millions already, and there will probably be billions of unique tokens in a few years. Estimating that this would transpire, the team set up an experiment that assigned a token to every internet address on the planet--and encountered no scaling issues. It’s ready for business at the grandest scope of application.

Additional Notes

The NFT marketplace has seen extremely dramatic volatility over the last year, but time has decided that any internet-related technology which attracts such interest ultimately proves durable to the community. The ERC721 token is the vehicle that will birth a dozen major business concepts over the next decade, and it may well eclipse the ERC20 standard as the most important accomplishment of the Ethereum organization.

Tip: Not sure where to start? In the near future, you will be able to use FlexSmart's platform to generate your own ERC721 token. Until then, click here to talk with a Smart Contract Creation Expert who can assist you with ERC721 token creation and implementation.