New Ethereum ERC1155 token explained!

This article explains the new ERC1155 Ethereum standard and why it's a major milestone in blockchain software we should all be excited about! I've also discussed the ERC20 and 721 standards to put everything in context (and CryptoKitties).

ERC20

Most of us are familiar with ERC20 tokens, there are thousands of them listed on etherscan and some of you might have made your own tokens as well. For those not familiar with ERC20, its basically a token standard for fungible tokens (fungible meaning mutually interchangeable or identical) on Ethereum. Examples include Tron or Binance Coin.

These are great for raising money using ICOs or trading. The standard was created so that exchanges had an easier time listing tokens and people who wanted to create tokens could do so more easily. You can create a token on Ethereum in less than 5 minutes using the ERC20 standard if you so wish - https://github.com/OpenZeppelin/openzeppelin-solidity/tree/master/contracts/token/ERC20. Just paste code into Remix, enter some parameters and you're good to go.

Fungible tokens are great, however, what if you want your token to be unique? What if you want to create a non-fungible token, for say a collectible (like CryptoKitties) or to show ownership of an item (say a house), what to do then? Enter ERC721.

ERC721

ERC721 is a non-fungible token standard. That means cryptokitties (which are based on ERC721) are unique and belong to you. You have the right to buy, sell or breed them. The more desirable the kitty, the higher the price. Kitties have been sold for upwards of $100,000. Note that the price will only be high if the kitty is non-fungible. Fungible kitties would not be worth collecting since all of them would be the same!

This this great, CryptoKitties are great, except the ERC721 standard is extremely inefficient, there was a time in December when cryptokitties was using 15% of all gas spent on Ethereum [1]. This slowed down Ethereum transactions for everyone. This is because each kitty had his/her own smart contract and deploying all the kitty contracts requires a lot of mining grunt.

These cuties were using 15% of Ethereum's gas in December

The solution to this problem was not released until about a week ago - ERC1155.

ERC1155

While ERC721 deploys a separate smart contract for every token, the ERC1155 standard can deploy hundreds (200 per transaction) of non-fungible tokens using one smart contract. This tremendously decreases gas cost per token and makes transactions faster for everyone.

This might sound trivial but IT IS A BIG DEAL! It's of paramount importance to use efficient standards on the blockchain, since everything lasts forever and costs precious gas! ERC1155 is a great step towards improving the scalability of the blockchain and I can't wait to see how it will be used.

References

[1] https://cryptovest.com/news/cryptokitties-burn-up-15-of-ethereums-gas/