What is an ERC1155 token? A complete explanation for beginners!

Many investors look for valuable information based on fundamental analysis, but forget to delve into the protocol’s standard token. Ethereum (ETH) is currently the largest network and continues to evolve. They want to focus on flexibility and usability.† It is a change in this creation and implementation of the ERC1155 token. This token provides a new dimension and flexibility in the creation and use of tokens. Find out in this blog what an ERC1155 token is and what this new token standard has in store for the future of blockchain technology.

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Would you like a brief introduction to the ERC1155 token? Then check out the video below.

What is a standard token?

A standard token is created when use of a particular source code† This source code provides more information about the cryptocurrency and the network on which it exists. Not all tokens may exist in their original state on another network. When Bitcoin (BTC) validated its first block in January 2009, there was obviously only one standard token and one network. Years later, there are numerous token standards, each with its own properties and capabilities. We see the biggest difference in the networks in which they exist.

Blockchain networks

Therefore, a token that exists on a particular network also has that particular token standard. Different tokens on a different network were completely foreign to each other. Until recently, it was not possible to transfer tokens from one network to another. Thanks to the use of cryptographic bridges, this is now possible. With the increasing number of networks and protocols, there are also need for interoperability† This is an important working point of blockchain technology.

The largest network at the time of writing is Ethereum. In addition to Ethereum being the second largest cryptocurrency by market cap, there are numerous protocols built into this network.

Ethereal

Ethereum has the largest network and several protocols use it. Why develop a whole new token standard, when you can use the largest network? This means that all tokens that exist on this network have the same token standard. On the Ethereum network, these are all ERC20 tokens. And there are more than you think. Some popular ERC20 tokens are:

The list is endless. That The advantage is that these cryptocurrencies are also easier to trade this way. But all these ERC20 tokens also have a big drawback: namely, that Transactions in DeFi here are associated with high transaction costs. Therefore, other blockchain networks have more and more users. Despite this, the Ethereum network is still the largest.

We also know other networks such as layer 1 blockchains, also known as network layer. The best known layer 1 blockchain is Bitcoin, but so are Cardano (ADA) and Radix (XRD), for example.

Filippo Ronca Cavalcanti/Shutterstock.com

Binance Smart Chain (BSC)

The originally central exchange Binance also saw potential in the switch to decentralized finance (DeFi) and developed the Binance Smart Chain. This decentralized variant of Binance has as aspire to become the largest counterparty to Ethereum, this mainly on the basis of cheap transaction costs. Binance Smart Chain is special developed for the use of smart contracts and decentralized applications (dApps). So all of these tokens exist on a different network and thus also have a different token standard. These tokens are BEP20 tokens.

ERC20 tokens and BEP20 tokens are very similar to each other, with the exception that they both exist in a different ecosystem. As a user, you will not notice any difference, only of course you can only trade the tokens in the intended ecosystem. Send your tokens to the wrong address, which is not supported, you will simply lose everything. Be aware of this!

expendable vs. non-expendable

It is an important development Difference between expendable and non-expendable. In addition to the rigid source code, it is important to add this token standard. Fungible means replaceable and therefore not unique. Cryptocurrency trading is basically not unique. One Bitcoin is equal to another Bitcoin. This is not the case with non-expendables, here everything is unique and irreplaceable. It is also this feature that makes the tokens NFTs.

Because these features are unique, each digital image or other digital asset with this source code is completely unique and therefore an NFT. The network is also important here. Each NFT has a different standard token per network† When you start trading NFTs it is important because, for example, you cannot trade NFTs on the Ethereum network on the Binance Smart Chain blockchain. That is, an NFT on the Ethereum network is an ERC721 token, while an NFT on the Binance Smart Chain network is a BEP721 token.

Binance Smart Chain Ethereal
token standard BEP20 tokens ERC20 sheets
NFT BEP721 chips ERC721 chips

What is an ERC1155 token?

The ERC1155 token is a standard token on the Ethereum network that combines the principle of fungible with non-fungible tokens. This can range from cryptocurrencies to digital real estate to in-game assets. Specific? An ERC11550 token can consist of both cryptocurrencies and NFTs. It is remarkable that an ERC1155 can be changed. Of course, you can’t exchange an ERC721 token, an NFT, like CryptoPunk. You can’t suddenly change the background yourself or update your digital art. You can make settings with an ERC1155 token. This change is visible to the entire network to ensure the transparency of the blockchain. Later in this blog we will discuss why this is an important development.

That Combine different types of tiles. Think expendable, non-expendable but also semi-expendable. So an ERC1155 token can do the same thing as an ERC20 token and an ERC721 token, but a bit better. You can best think of this as a general folder on your computer, in which several separate files exist. This umbrella map is therefore an ERC1155, while the files in this folder can be ERC20 tokens and ERC721 tokens. Therefore, you can partially modify this ERC1155 token. So you can keep a crypto and NFT wallet all in one folder.

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Features ERC1155 Token

Like any other standard token, this ERC1155 token has many features that make it unique. These characteristics mean that there are more and more applications, both in crypto and in the physical world.

batch shipping

Can send multiple digital assets in one transaction† Therefore, all files are hosted under this ERC1155 token standard. You can compare it to using zip files. Pack and bundle different files and then send them. This also saves gas fees on the expensive Ethereum network.

batch balance

As an investor, you can use trackers like FTX (formerly Blockfolio) or Delta to see your balance. This way you don’t have to look at each investment individually and then do the sum yourself. By grouping this fungible, semi-fungible and non-fungible asset under one name, you get your lot balance at a glance. For example, if you own a valuable NFT, but also have investments in your portfolio, you can check the balance of it all together here.

Batch Approval

Every transaction must be verified and validated, which is inherent in the decentralized nature of blockchain technology. By pooling these digital assets, all of these assets can be approved in one go. It’s all or nothing here. So your entire batch is approved or rejected, not based on individual assets.

Application Token ERC1155

Although it may seem abstract how a standard token works, we can better explain it with some examples. We use the example of blockchain gaming here, but also discuss why this new token standard is essential for use in the physical world.

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play to win games

The countless play-to-win games on the blockchain are popular. Earn money playing your favorite game? It’s possible! But what about token standards? A game consists almost exclusively of non-fungible tokens. Think for example of a racing game where you can choose an avatar yourself, the outfit of this avatar but of course also your vehicle. You may have had to purchase all of these in-game assets before through an NFT marketplace like OpenSea, and therefore they are owned by you. These are unique and therefore also an NFT, an ERC721 token.

but when you If you want to combine multiple NFTs in one game, it can get unnecessarily complicated† You also often have to deal with transactions based on a native currency. To make this easy, all of this is packaged into an ERC1155 token. When you play a game and want to use different NFTs, they can be bundled into one ERC1155 token. You can adjust this, because you can trade these NFTs. Therefore, the initial token changes, unlike other token standards.

Are you curious about the best games to earn cryptocurrencies and money? Discover the top 10 games to play to win here.

physical world

NFTs are much more than digital art. All unique assets on the blockchain are non-fungible and with this technology we can record many things on the blockchain. Think about medical records, passports, driver’s licenses and criminal records. Although this technology has not yet been adopted in the physical world, here are the possible scenarios and what this technology could mean.

An example would be that your personal file is an ERC1155 token. This contains all sorts of different documents that will be adapted in the future. A the birth certificate, on the other hand, does not change anymore and can therefore be stored as an ERC721 token, an immutable document. also dDiplomas and other documents that no longer require modification may also exist here as NFTs.

A non-fungible token means that we can never change it again once it exists on the blockchain. Of course, the medical records and other documents mentioned above are not static. This means that with each medical accident your file will be updated and therefore adjusted. This constant adjustment is necessary to keep up with all the data. Do you break a leg on vacation or have you had surgery? Then this information can simply be added to your file. The fungible token standard is not an option here because all information is completely unique, nor is the non-fungible standard an option because this information must be constantly updated.

Conclution

Have you ever thought of a standard token? This could be It is not the most popular topic, but a very important part. It happens too often that investors lose their money by sending crypto to an incompatible network. And in a decentralized network where you are your own bank, there is unfortunately no possibility to undo this transaction. Therefore, always investigate first if a transaction is possible.

There will come a time when blockchain technology will be applied in our daily lives. Therefore As the ecosystem continues to evolve, this new token standard was created. Based on this source code and build, documents are not only digitized and recorded on the blockchain on the basis of an NFT. but they can also be changed to keep the data updated or to change it.

Do you have any questions about ERC1155 tokens or another token standard? ask in our AllAboutCrypto Facebook Group where we are now with over 100,000 members! You can also easily find the answer to a crypto question in our FAQ. You can also find a lot of information by googling your question + AllesOverCrypto.

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