Guest post by Simon Kertonegoro from Enjin
Simon is the vice president of Adinio di Enjin.
A Ethereum the token standard representing fungible and non-fungible assets could trigger a new wave of asset trading in the digital space.
The popularity of cryptocurrencies has helped people all over the world to overturn the idea of possessing stuff in the digital space. But owning other forms of digital resources is more difficult to incorporate into public consciousness.
Even established gaming studios, which are positioned in a brilliant way to profit from the trade of digital resources among their clients, may find it difficult to understand exactly how digital assets can take on value, become collectible and transferred between the parties.
Part of the reason for this delay is the complexity of the tools that facilitate ownership of digital resources.
Enter ERC-1155, a new type of standard token built on Ethereum blockchain which can facilitate ownership of both fungible and non-fungible assets. ERC-1155 has been explored by a number of game developers and should drive a revolution in the ownership of digital assets, in the gaming industry and beyond.
First, let's examine some basic notions about the ownership of digital assets and the difference between fungible and untrusted tokens.
Tokens not fertile
Everyone can understand instinctively why antique objects have special value. Perhaps a silver goblet was owned by an emperor, or a clock was designed in the seventeenth century by a famous watchmaker. These articles have value because of the unique stories associated with them. Two swords might look the same, but one could have belonged to a samurai, while the other is a replica. In this case, the sword with the most unique and interesting story is worth more.
This notion of the value of "uniqueness" is relevant for the discussion of fungible and unreliable tokens. Fungible tokens are not unique and interchangeable, like Bitcoin or Ether. If you exchange a Bitcoin token with another you would still have a Bitcoin. They are interchangeable, for example as rice grains or coins. We are not interested in the individuality of these elements, we are interested only in what they are worth for us.
An unstoppable token is a unique token that represents a unique asset. One of the best examples of non-fungible digital assets is a CryptoKitty. CryptoKitties are unique digital cardboard cats, each with its own individual combination of colors, appearance and features. They can be bought, sold and traded on the blockchain. Just like antique objects, every cat has its own story. Now, thanks to Ethereum blockchain, it is not necessary to carefully examine each cat and verify its unique history. Instead, the blockchain can verify its identity, uniqueness and properties.
Appetite for digital property
The exciting news for the video game industry is the already existing appetite for possessing digital products, both fungible and non-fungible. Think of the typical multiplayer battle games. They have fungible items available in bulk, such as stimulus packages, health kits or ammunition. There is also the desire for unique non-percutable objects, such as the magic wand of a particular magician.
This request presents a huge opportunity for game developers. The problem? They generally have no blockchain experience, nor the resources to issue tokens to start a digital resource trade between their communities.
Where ERC-1155 arrives
In recent years, digital fungible resources (eg cryptocurrencies) on Ethereum the blockchain was represented by ERC-20 tokens, while non-fungible activities (eg CryptoKitties) were represented by ERC-721. The two types of tokens are not compatible.
ERC-1155 combines the advantages of both, allowing for the incorporation and issuance of both fungible and non-fungible resources, such as thousands of different types of items for a particular game. Each item can have a unique index and be non-fungible, or it can be completely fungible with other collectibles on the platform.
Democratize the creation of tokens
An even more interesting advantage of the ERC-1155 is the simplicity and speed it offers, especially when compared to the ERC-20 and ERC-721 tokens. The biggest problem with existing token projects is the fact that they require the implementation of a separate contract on the blockchain for each type of article. And, they require the developer to build and implement an intelligent complete contract. These contracts usually contain almost identical code, with minor changes to the token name or number.
Every single distributed node on a blockchain (in other words, every computer in the world that stores information on the blockchain) must keep the code and interface of each token indefinitely alive. This is a huge waste of data and state size. It is one of the reasons why the popularity of CryptoKitties has almost brought the Ethereum blockchain at a standstill in 2017.
Existing token projects require a multi-step process to exchange one type of token with another, without an intermediary. Four transactions are required to exchange two tokens. Because the ERC-20 and ERC-271 tokens are separated into separate contracts, each additional type of token added to the trade requires an additional approval step.
A blockchain game with 100,000 assets per trade would cost a fortune to be created. The greater the capacity used Ethereumthe greater the cost, the more difficult it is to manage such a large number of resources.
ERC-1155 has a new approach. Digital resources can be stored in a single ERC-1155 contract with the minimum amount of data needed to distinguish the token from others. With ERC-1155, you can send any number of resources to one or more recipients in one transaction. This reduces gas and congestion on the Ethereum transaction pool and ultimately saves money to users.
The team here at Enjin is not looking forward to seeing the creative use cases that the cryptocurrency community invents for this technology.
Disclaimer: The opinions of our writers are exclusively their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate approve any projects that may be mentioned or linked in this article. Buying and exchanging cryptocurrencies should be considered a high-risk activity. Please do your due diligence before taking any action related to the contents of this article. Finally, CryptoSlate assumes no responsibility in case of loss of money in the trade of cryptocurrencies.
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