ERC-721 refers to a token standard that can be found on the Ethereum blockchain.
The more common term used to refer to these assets is non-fungible tokens, an asset class that exploded in popularity in late 2020 and early 2021.
Non-fungible tokens (or NFTs for short) refer to tokens that have unique characteristics, setting them apart from other tokens.
A $10 note is an example of something fungible. If you lend one of these banknotes to a friend, you don’t need to receive the same one back as they are all identical.
A plane ticket or a trading card is an example of something non-fungible. Although two plane tickets may look the same, one may offer an economy trip to New York, while another will guarantee you a first-class trip to Barbados. As a result, they cannot be swapped on a like-for-like basis.
ERC-721 tokens help bring this concept to the blockchain, ensuring that distinctive details about an asset can be immortalized. NFTs can be used to provide a digital representation of one-of-a-kind artwork, with ownership that is easily proved through blockchain records. This can help clamp down on counterfeiting.
There is a firm belief in the Ethereum community that ERC-721 could have several exciting applications, so far beyond the collectable CryptoKitties that made this asset class famous. Several competing blockchains, for example Binance Smart Chain, have also released token standards that offer similar characteristics to ERC-721.
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