Unique Tokens: Complete Guide

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What are unique tokens

In order to understand what is special about these tokens, you need to understand the difference between unique, or non-interchangeable, and interchangeable assets.

If an asset (in this case, a token) is interchangeable, this means that it can easily be replaced with another asset of the same kind. For example, it could be a packet of rice or a dollar bill. If you lend this dollar to someone, it will not matter to you; the same bill will be returned to you or another. All this does not apply to unique assets.

Even if we are talking about two identical things in appearance, each of them will contain unique information or have special properties, because of which they cannot simply be replaced or exchanged for one another.

An example of a unique asset is a plane ticket. All tickets are similar to each other, but each of them has its own passenger name, destination, departure time and seat number.

Changing your ticket to another will entail serious consequences: you can not only be a thousand kilometers from where you were going to get, but also cause interest in the airport security service.

What can unique tokens be used for

Unique tokens have collectible value, and this is their main purpose. One of the pioneers in the unique token industry is the CryptoKitties blockchain platform, where players can collect and grow digital cats. If you have ever had a cat, then you know that it is not easy to replace one cat with another, because each animal is different in its appearance and character.

CryptoKitties transferred it all to the cryptosphere – each cat’s digital genetic material is stored on the blockchain. Such cats can be bought and sold for broadcast, and some of them are more rare than others.

According to CoinTelegraph, the volume of transactions with cryptocurts last year amounted to $ 12 million, and the most expensive CryptoKitty cost the new owner 120 thousand.

Other gaming platforms like CryptoKitties have also appeared, where, for example, you can buy fighters to participate in virtual battles.

What are the advantages and disadvantages of such tokens

Although the unique token of the ERC-721 standard has some advantages compared to the ERC-20 standard, one cannot fail to mention some disadvantages. Proponents of the ERC-20 believe that this standard can become the tool that will make it possible to put all significant assets into the public or hybrid blockchain with a 100% guarantee of reliability and immutability. Unique tokens are valuable in that they can indicate not only the name, balance, issue volume and ticker, but also other important information.

For example, it can be extensive metadata about the asset itself and information about the right to property, which will significantly increase the value of such tokens, because investors will be sure of a good provenance of these assets.

With all this, unique tokens are not so quickly recognized in the crypto community as their supporters hoped, partly because the ERC-721 standard is still completely new. In addition, the development of full-fledged decentralized applications for unique tokens can take a lot of time and money.

Are unique tokens needed at all

The world is gradually giving up paper, and supporters of unique tokens believe that they will be interesting not only to collectors.

For example, they can be used as a reliable and unchangeable analogue of birth certificates, university diplomas, warranty certificates and identification cards, as well as documents proving ownership of real estate and art. In this case, physically existing assets will be properly digitized and placed in a cryptocurrency wallet, where they will be kept safe, protected from interventions and attempts to falsify by third parties.

How are unique tokens created

There are concerns that due to different standards and certification levels, unique tokens will be too heterogeneous and inconvenient to use. As we wrote above, at the moment, the creation of unique tokens is fraught with serious difficulties and costs.

It can take months to develop DApp, and in a fast-paced field of activity such as blockchains, it can cost an entrepreneur a competitive advantage. Therefore, instead of creating independent frameworks for each new unique token, which may eventually lead to the emergence of many heterogeneous elements, some platforms are working on creating a technological level that will unite and standardize such tokens.

One of such platforms is 0xcert, which offers a plug-and-play framework, thanks to which the creation and verification of unique tokens is faster – according to the developers, within a few days. 0xcert claims that their platform eliminates the problem of data fragmentation and with its help you can create unique tokens quickly, inexpensively and reliably, even without being an expert on blockchain.

 

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