In this article we are going to talk about ERC-20. What is ERC-20, how does it work and what can you do with ERC-20 tokens: This will all be answered here.
Table of Contents
ERC-20 tokens are only created and used within the Ethereum Network. Within this network, there is a standard that all ERC-20 tokens must comply with, and a number of uses that are expected.
For example, tokens must have a total supply (total stock), balance, transfer, transferFrom, approve and allowance function. Optionally, the token is expected to have a name, a symbol (ticker) and set a decimal (max. 18 and also the default).
This all sounds a bit technical, so we’ll keep it all as simple as possible. There are currently more than 200,000 different ERC-20 tokens. Not all of these tokens are in use, but at the moment, according to CoinGecko, there are 5955 that have value.
The Ethereum Network
View this page to read a full explanation of Ethereum. In short, Ethereum is an open-source blockchain protocol. It is a decentralized platform used by many developers.
It is relatively cheap and easy to build on the Ethereum Network. The network has so many tokens that it has become the standard within the cryptocurrency space. This also has advantages for users, because ERC-20 tokens can be stored in many different wallets. In addition, it is easier and cheaper for projects to list ERC-20 tokens on an exchange compared to other types of tokens.
Smart contracts and ERC-20
The Ethereum Network uses smart contracts. ERC-20 tokens are therefore also created and sent by means of smart contracts. Also, the balance of each wallet that has kept the ERC-20 token is kept by means of smart contracts. This can be viewed at etherscan.io.
There are many examples of ERC-20 tokens. We have already written about several projects that make use of this.
Many others can be found on this page.