ERC721 and ERC20 Tokens. Which is Better?

The famous and high in demand blockchain system Ethereum works on the concept of tokens. Some of these tokens are ERC721 and ERC 720.

What Is ERC721?

ERC721 tokens are called non- fungible tokens or NFTs. ERC21 tokens allow developers to tokenize ownership of any arbitrary data. You can understand ERC720 tokens as the smaller section of Ethereum tokens

What Is ERC720?

This is a noteworthy Ethereum token that can be received or sent through a medium and contains a value. ERC720 tokens don't operate on their own in the blockchain but are equipped on the ethereum network.

Why ERC721 Is Better Than ERC20 to Represent a Real Estate Property on ETH Blockchain

We recently built a solution to help real estate professionals to record a sale of property and title ownership on the blockchain. See: Using blockchain for title registration in real estate industry

We represented each property via an ERC20 token. Note that each ERC20 token is exactly the same just like how each $1 bill are same – same value, same look, and feel. In order to maintain which token represents which property, we maintained a mapping of address to the owner who currently owns the token:

The Property Transfer Info is a Struct as Follows:

struct PropertyTransferInfo {

Owner owner;

string deedURL;

}

struct Owner {

string name;

string email;

address walletAddress;

}

Every time a user wants to transfer a property, we would look for the current owner and transfer 1 token out of his wallet and update the information in our contract.

This Has Two Issues –

• In the real world, every property is different – shape, size, address, value. ERC20 does not allow to associate properties with a token.
• If a user uses a system other than our engine to transfer token, we would lose track of which token belongs to which property.

Here Comes Advanced Ethereum Contract ERC-721.

It's a specification to create a token that can have properties associated with it. See technical specifications for ERC721: https://github.com/ethereum/EIPs/blob/master/EIPS/eip-721.md

We can now associate address (and eventually other properties) with the address itself and each token is unique to a property. The DApp built previously still works as is.

If you are interested to see all this in action and like to get a custom software solution built, please reach out to us at mohit@jalantechnologies.com.

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