Practical Guide: Token Standards — ERC-20 and ERC-721 Explained using ChatGP

Practical Guide: Token Standards — ERC-20 and ERC-721 Explained using ChatGPT

Blockchain has revolutionized how we think about ownership, transparency, and digital assets. But to truly understand how tokens work on platforms like Ethereum, you need to grasp token standards — especially ERC-20 (for fungible tokens) and ERC-721 (for NFTs).

In this practical guide from AI Computer Classes – Indore, we’ll simplify these concepts using ChatGPT as your AI assistant. You’ll learn what makes these tokens unique, how they’re coded, and how to build simple examples — even if you’re new to blockchain development.

🔗 What Are Token Standards in Blockchain?

Think of token standards as a set of rules every digital token follows to ensure compatibility across wallets, exchanges, and applications.

Just like USB devices follow the same plug design, Ethereum tokens follow ERC standards to communicate seamlessly across the blockchain ecosystem.

There are dozens of standards, but ERC-20 and ERC-721 are the most popular and practical to learn in 2025.

💰 ERC-20 — The Backbone of Fungible Tokens

ERC-20 is the standard for fungible tokens, meaning each token is identical and interchangeable.

Examples:

• USDT (Tether)
• DAI (Stablecoin)
• UNI (Uniswap Token)

Each token under ERC-20 follows a specific interface of functions like:

function totalSupply() public view returns (uint256);
function balanceOf(address _owner) public view returns (uint256 balance);
function transfer(address _to, uint256 _value) public returns (bool success);

💡 In simple terms: ERC-20 is like your bank account — every rupee is the same and can be exchanged equally.

🎨 ERC-721 — The Birth of NFTs

While ERC-20 deals with identical tokens, ERC-721 introduced non-fungible tokens (NFTs) — unique, one-of-a-kind digital assets.

Examples:

• CryptoPunks
• Bored Ape Yacht Club
• Virtual real estate assets

Each ERC-721 token represents something unique and has its own ID.

function ownerOf(uint256 _tokenId) external view returns (address owner);
function safeTransferFrom(address _from, address _to, uint256 _tokenId) external;

💡 In simple terms: ERC-721 is like artwork — every piece is unique, and no two are the same.

🤖 Using ChatGPT to Understand and Write Smart Contracts

Learning blockchain can be tricky, but with ChatGPT, you have a personal tutor 24/7.

You can use it to:

• Explain Solidity code line by line 🧩
• Generate sample smart contracts
• Debug your token code
• Understand gas optimization techniques

💬 Example Prompt:

“ChatGPT, write a basic ERC-20 token contract in Solidity that mints 1,000,000 tokens to the deployer.”

You’ll instantly get code like:

pragma solidity ^0.8.0;

import "@openzeppelin/contracts/token/ERC20/ERC20.sol";

contract AICCToken is ERC20 {
    constructor() ERC20("AI Computer Classes Token", "AICC") {
        _mint(msg.sender, 1000000 * 10 ** decimals());
    }
}

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🧩 ERC-20 vs ERC-721 — Key Differences

FeatureERC-20ERC-721Token TypeFungibleNon-FungibleUniquenessIdenticalUniqueUse CaseCryptocurrencies, utility tokensNFTs, collectiblesFunctionstransfer, approve, allowanceownerOf, tokenURI, safeTransferFromStorageBalances in mappingOwnership in token IDs

Understanding these differences helps you decide which token fits your project best — a digital currency or a unique collectible system.

💻 Build Your First Token with ChatGPT

You can ask ChatGPT to generate working templates for both standards.

Example 1 — ERC-20 Mintable Token:

contract SampleToken is ERC20 {
    constructor() ERC20("Sample Token", "SMP") {
        _mint(msg.sender, 500000 * 10 ** decimals());
    }
}

Example 2 — ERC-721 NFT Contract:

contract SampleNFT is ERC721 {
    uint256 public nextTokenId;

    constructor() ERC721("Sample NFT", "SNFT") {}

    function mintNFT(address to) public {
        _mint(to, nextTokenId);
        nextTokenId++;
    }
}

Once deployed on the Ethereum testnet, these smart contracts become real blockchain tokens that follow global standards.

🧠 How ChatGPT Helps in Blockchain Learning

At AI Computer Classes – Indore, we integrate AI tools like ChatGPT into our blockchain labs.

Students use AI to:

• Understand complex Ethereum concepts easily
• Simulate token transactions
• Auto-generate Solidity tests
• Explore real-time blockchain use cases

This blend of AI + Blockchain gives learners a unique, future-ready advantage in 2025’s tech landscape.

🚀 Practical Use Cases of ERC Tokens

Here’s where these standards shine in the real world:

• ERC-20: Used for ICOs, DeFi tokens, and in-game currencies
• ERC-721: Powers NFTs, certificates, and unique asset ownership
• Combined Models: Hybrid tokens for metaverse projects

At AI Computer Classes, learners build hands-on blockchain prototypes — from digital wallets to mini NFT marketplaces.

💼 Career Edge: Why Learn Blockchain Token Standards

By mastering ERC-20 and ERC-721, you’ll understand:

• How cryptocurrencies are created and transferred
• How NFTs prove digital ownership
• How DeFi and metaverse platforms are built

These are in-demand skills for blockchain developers, data scientists, and tech entrepreneurs.

💡 Blockchain isn’t just a concept — it’s the foundation of digital economies in 2025.

✨ Conclusion: From Tokens to Transformation

Understanding token standards is like learning the grammar of blockchain. Once you grasp ERC-20 and ERC-721, you can build decentralized applications, NFT projects, or your own crypto assets confidently.

Use tools like ChatGPT to guide your learning, and let AI simplify the technical parts so you can focus on innovation.

🎯 At AI Computer Classes – Indore, you’ll learn blockchain the practical way — with code, projects, and real-world applications.

📞 Contact AI Computer Classes – Indore

✉ Email: hello@aicomputerclasses.com

📱 Phone: +91 91113 33255

📍 Address: 208, Captain CS Naidu Building, near Greater Kailash Road, opposite School of Excellence For Eye, Opposite Grotto Arcade, Old Palasia, Indore, Madhya Pradesh 452018

🌐 Website: www.aicomputerclasses.com