What is ULID?

ULID stands for Universally Unique Lexicographically Sortable Identifier,
they are composed of a timestamp and a random component called entropy, which are combined to create a unique identifier.

How?

The timestamp component is a 48-bit integer that represents the number of milliseconds since midnight on January 1, 1970, UTC. The random component is called as entropy is a 80-bit integer that is generated using a cryptographically secure random number generator.

01GXNPWRFH0338V2CSNSV8N3NY

 01GXNPWRFH      0338V2CSNSV8N3NY
|----------|    |----------------|
 Timestamp            Entropy
  48bits              80bits

Why?

We already have UUIDs Universally Unique Identifiers, the main drawback of UUID is they are not sortable, bulky and have lesser randomness.

There is a gem https://github.com/abachman/ulid-ruby, which has a very good readme.