What is a Non-Fungible Token (NFT)?

Fungible tokens are all equal and interchangeable. For instance, dollars or Bitcoins or 1 kilogram of pure gold or ERC20 tokens. All TOMO coins are equivalent too, they are the same and have the same value. They are interchangeable 1:1. This is a fungible token.

Non-fungible tokens (NFTs) are all distinct and special. Every token is rare, with unique atributes and different value. For instance: CryptoKitty tokens, collectible cards, airplane tickets or real art paintings. Every item has its own characteristics and specifics and is clearly differentiable to another one. They are not interchangeable 1:1. They are distinguishable.

Think of Non-Fungible Tokens (NFT) as a rare collectible on the TomoChain network. Every token has unique characteristics, its own metadata and special attributes

Non-Fungible Tokens (NFT) are used to create verifiable digital scarcity. NFTs are unique and distinctive tokens that you can mainly find on EVM blockchains.

Comparison: fungible and non-fungible tokens

The ERC-721 is the standard interface for Non-Fungible Tokens (but there are also other NFTs, like ERC1155). ERC721 is a set of rules to make your NFT easy for other people / apps / contracts to interface with.

ERC721 is a free, open standard that describes how to build non-fungible or unique tokens on EVM compatible blockchains. While most tokens are fungible (not distinguishable), ERC721 tokens are all unique, with individual identities and properties. Think of them like rare, one-of-a-kind collectables — each unit is a unique item with its own serial number.

ERC20: identical tokens. ERC721: unique tokens

Some high demand non-fungible tokens are applications like CryptoKitties, Decentraland, CryptoPunks, and many others.

CryptoKitties

At the end of 2017, NFTs made a remarkable entrance in the blockchain world with the sucess of CryptoKitties. Each one is a unique collectible item, with its own serial number, which can be compared to its DNA card. This unleashed an unprecedented interest for NFTs, that went so far as to clog the Ethereum network. The CryptoKitties market alone generated $12 million dollars in two weeks after its launch, and over $25 million in total. Some rare cryptokitties were even sold for 600 ETH ($170,000).

The strength of NFTs resides in the fact that each token is unique and cannot be mistaken for another one– unlike bitcoins, for example, which are interchangeable with one another.

CryptoKitties

Crypto Item Standard (ERC-1155)

One step further in the non-fungible token space is the ERC-1155 Standard proposed by the Enjin team, also known as the “Crypto Item Standard”. This is an improved version of ERC-721 which will actually be suitable for platforms where there are tens of thousands of digital items and goods.

Online games can have up to 100,000 different digital items. The current problem with ERC-721 is that if we would like to tokenize all those 100,000 items, then we would need to deploy 100,000 separate smart contracts.

ERC-1155 standard combines ERC-20 and ERC-721 tokens in its smart contract. Each token is saved in the contract with a minimal set of data that distinguishes it from others. This allows for the creation of bigger collections which contain multiple different items.