Is BlockChain the same as Non-Fungible Tokens?
With the hype around blockchain and non-fungible tokens, it’s not uncommon to see the two terms used interchangeably. The truth is that although the two terms are often used interchangeably, they don’t actually mean the same thing. Here’s how they’re different and why it matters.
What is blockchain technology?
In a business setting, blockchain technology can be implemented for keeping records of transactions in a secure and transparent way. However, even businesses that aren’t typically seen as being techy are likely to be impacted by it. The technology is well suited for tasks like managing digital identities and security permissions. A Business Intelligence report from Gartner predicts that 25% of business leaders will have started using blockchain technology within three years. The reality is that blockchain has made many headlines recently because it is still new, misunderstood, complicated and so incredibly important for us all in coming years—especially if you are interested in privacy and ownership of your data.
What are nonfungible tokens (NFTs)
Today, there are around 700+ different cryptocurrencies. The most notable one is Bitcoin. In order to understand blockchains, cryptocurrencies, and all these things we call tokens we have to think of them not in terms of how they are used but rather by what they represent: value transfer. At its core, Bitcoin (and every other cryptocurrency) is a series of transactions recorded on a public ledger (the blockchain). We say it’s a transaction because each one carries value – and that’s what matters when it comes to fungibility. Whenever I transfer money from my account to yours I don’t really care about where that money comes from or where it goes; I just care about transferring value.
What are ERC721 tokens?
ERC721 is a technical standard used for smart contracts on Ethereum. The token’s name comes from Ethereum Request for Comment, or ERC, number 721. It defines a set of rules for handling non-fungible tokens, which are blockchain assets that can each have unique data attached to them. ERC721 was introduced by developer Fabian Vogelsteller in 2017, after he became frustrated with Ethereum’s inability to handle non-fungible tokens.
Who created the ERC721 token standard?
It was created by Dieter Shirley who is a co-founder of both CryptoKitties and ERC721. He’s also known for creating Sexy Token a blockchain project which lets you buy yourself some sexy on Ethereum based on your genetic information. The code for ERC721 was published in Github and is open source, but that does not mean that developers are obligated to work with it or even interested in it. Over time, we may see many different standards for nonfungible tokens used across different blockchains, especially if there is not an agreed upon standard.
How do they relate to each other
In short, No. NFTs are a subset of blockchain tech, meaning they cannot exist without it; Blockchain is not dependent on NFTs. Think of blockchain and NFTs like HTML and CSS: HTML can be used to create any website you’d like – from portfolio sites to online resumes – but it doesn’t actually make your site work; CSS is what makes it all come together.