Crypto Glossary

Posted on September 13, 2021 in
Glossary

ERC-20

ERC-20 is one of the most important Ethereum tokens. In terms of token implementation, it has emerged as the de facto standard, and it is widely used for smart contracts on the Ethereum blockchain, especially when it comes to token implementation. The rule set for all tokens built on Ethereum, which is defined by ERC-20, also holds true.

What exactly is ERC-20?

When it comes to some aspects, ERC-20 is analogous to Bitcoin, Litecoin, and any other cryptocurrency; ERC-20 tokens are blockchain-based assets having a monetary value that can be exchanged and received by anybody. However, the primary difference is that ERC-20 tokens are created on the Ethereum network, as opposed to being produced on their own blockchain.

ERC-20 and Ethereum

ERC-20 may be familiar to Ethereum followers. You may sell, purchase and even exchange tokens in the Ethereum blockchain ecosystem – ERC-20 tokens are among the most popular. 

As a matter of fact, ERC-20 is one of the most significant Ethereum-based tokens available. As a token form, it also represents a set of criteria for digital tokens. Smart contracts are implemented with this token and cover a set of rules that all Ethereum-based platforms must obey.

ERC-20 Simplified

In essence, ERC-20 is comparable to other cryptocurrencies such as Bitcoin, Ether, and others. However, you must realize that Ether and ERC-20 are not synonymous. IIn reality, Ether is the primary currency of the Ethereum network, whereas ERC-20 is a specification for a particular sort of token. As a result, people can utilize this standard to generate new ERC-20 tokens, each with a unique token name. Moreover, only Ethereum-based platforms will allow the use of ERC-20 tokens.

ERC-20 Standard Rules

ERC-20 rules and standards are put in place in the case where any smart contract chooses to use the token. The rules are rigid and a smart contract will need to follow them in order to be able to be identified as an ERC-20 token. 

Standards 

  • allowance
  • approve
  • transferFrom
  • transfer
  • balanceOf
  • totalSupply

Non-mandatory Standards

  • Token Name
  • Decimal (Max: 18)
  • Symbol

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