NFT's- NFTs and Ethereum Standards

What is Ethereum’s native currency/token called?

Ether (ETH).

What role does Ether play in the Ethereum network?

Ether is the native cryptocurrency used for transactions and paying for computational services on the Ethereum network.

How does Ethereum compare to Bitcoin in terms of having a native token?

Like Bitcoin has Bitcoin (BTC), Ethereum has its own native token called Ether (ETH).

What is Ethereum’s ranking among cryptocurrencies by market capitalisation?

Ether is the second-largest cryptocurrency by market capitalisation.

What does it mean that Ethereum is a “multitoken network”?

It means Ethereum supports not only its native token (Ether) but also the creation of many additional tokens built on the network.

: Give a real-world example of tokens created on the Ethereum network.

Examples include stablecoins like USDC, governance tokens like UNI, and NFTs such as CryptoPunks.

What two main types of tokens can exist on Ethereum besides Ether?

: Fungible tokens and non-fungible tokens (NFTs).

What is a non-fungible token (NFT)?

A unique digital token that cannot be exchanged one-for-one with another token of the same type because each has different characteristics or value.

Why are NFTs considered non-fungible?

Each NFT is unique and may have different properties, rarity, or ownership history.

Give an example of NFTs on Ethereum.

CryptoPunks.

Why might one CryptoPunk be worth more than another?

Differences in rarity, traits, or demand can cause significant differences in market value.

Give a real-world analogy for NFTs.

Art paintings: two paintings by the same artist can have very different values.

Why is Ethereum particularly suited for NFTs and multiple tokens?

Its blockchain allows developers to create custom tokens and smart contracts that represent different digital assets.

What are ERC standards in Ethereum?

ERC standards are technical rules that define how tokens behave and interact on the Ethereum blockchain.

What does ERC stand for in Ethereum?

Ethereum Request for Comment.

Why are ERC standards important for Ethereum tokens?

They ensure tokens follow common rules so wallets, exchanges, and smart contracts can interact with them easily.

What is ERC-20?

The standard for fungible tokens on the Ethereum blockchain.

When was the ERC-20 standard introduced?

2015.

Why is ERC-20 widely used?

It provides a standard framework that allows fungible tokens to work across Ethereum wallets, exchanges, and applications.

Give a real-world example of an ERC-20 token.

Stablecoins like USDC or governance tokens like UNI.

What type of tokens does the ERC-20 standard support?

Fungible tokens.

What does ERC-721 represent?

The standard for non-fungible tokens (NFTs) on Ethereum.

When was the ERC-721 standard introduced?

2018.

Why is ERC-721 important?

It enables unique digital assets such as NFTs to exist on the Ethereum blockchain.

Give a real-world example of an ERC-721 token.

CryptoPunks or Bored Ape Yacht Club NFTs.

What is the key difference between ERC-20 and ERC-721 tokens?

ERC-20 tokens are fungible (identical), while ERC-721 tokens are unique NFTs.

What is ERC-1155?

A multi-token standard that allows one smart contract to manage multiple token types.

When was ERC-1155 introduced?

2018

What advantage does ERC-1155 provide compared to ERC-20 and ERC-721?

It allows fungible and non-fungible tokens to be managed within a single smart contract.

What types of tokens can ERC-1155 support?

Fungible tokens, non-fungible tokens, and semi-fungible tokens.

Give a real-world example where ERC-1155 might be used.

In blockchain games where weapons, skins, and currencies all exist in the same system.

What is ERC-6551?

A token standard that allows NFTs to have their own wallets.

When was ERC-6551 introduced?

2023

What are token-bound accounts in ERC-6551?

Wallets that are controlled by NFTs themselves.

Give a real-world example of ERC-6551 usage.

An NFT character in a game could own items, tokens, or other NFTs directly through its own wallet

Why might ERC-6551 be useful for NFTs?

It allows NFTs to hold assets and interact with other smart contracts.

What is ERC-721?

ERC-721 is Ethereum’s most popular standard for creating and managing non-fungible tokens (NFTs).

What does the ERC-721 standard allow developers to implement?

A standard API for NFTs within Ethereum smart contracts.

What does API mean in the context of ERC-721?

API (Application Programming Interface) is a set of rules that allows different programs, wallets, and applications to interact with NFTs.

Why is having a standard API important for NFTs?

It ensures that NFTs can be easily tracked, transferred, and recognised across wallets, marketplaces, and applications.

What basic functionality does ERC-721 provide?

The ability to track ownership of NFTs and transfer them between users.

What is an example of ERC-721 functionality in practice?

When someone sells an NFT on a marketplace like OpenSea, the ERC-721 standard allows ownership to transfer from the seller’s wallet to the buyer’s wallet.

Q: How are ERC-721 tokens typically created at the technical level?

By writing code in a smart contract programming language.

: What programming language is commonly used to create ERC-721 NFTs?

Solidity

What is Solidity?

A programming language used to write smart contracts on the Ethereum blockchain.

Why do developers use Solidity for ERC-721 tokens?

It allows them to program smart contracts that create, manage, and transfer NFTs.

Do most NFT creators need to write Solidity code themselves?

No. Many NFTs are created using service providers that require little or no programming.

What is ERC-1155?

ERC-1155 is Ethereum’s multi-token standard that allows smart contracts to manage multiple types of tokens.

What is the main purpose of the ERC-1155 standard?

To allow one smart contract to manage multiple token types instead of requiring separate contracts.

What does ERC-1155 implement for smart contracts?

A standard interface for contracts that manage multiple token types.

How does ERC-20 handle different token types?

ERC-20 requires a separate smart contract to be deployed for each token type.

How does ERC-721 organise NFTs in a smart contract?

ERC-721 groups a collection of NFTs in a single contract with settings that apply to the entire collection.

How does ERC-1155 differ from ERC-721 in how tokens are structured?

ERC-1155 allows each token ID within a collection to represent a different configurable token type.

: What properties can each token ID in ERC-1155 have?

Its own metadata, supply, and other attributes.

What is the key innovation of ERC-1155?

Multiple tokens can co-exist in the same smart contract.

Why is having multiple tokens in one smart contract useful?

: It reduces the need for many separate contracts and can make transactions more efficient.

What functionality does ERC-1155 enable that helps reduce transaction costs?

The ability to transfer multiple token types in a single transaction.

Why can ERC-1155 reduce transaction costs on Ethereum?

Because multiple tokens can be transferred together instead of requiring separate transactions.

In which type of applications is ERC-1155 particularly useful?

Gaming Applications

Despite its flexibility, how does ERC-1155 compare in popularity to ERC-721?

ERC-1155 is currently less popular than ERC-721. because ERC-721 became the early standard for NFTs and is widely adopted by NFT platforms and collections.