ERC-20 Token explained
Simply put, ERC-20 is the standard protocol on the Ethereum network that is used for smart contracts and for entering tokens on the network. The abbreviation “ERC-20” stands for “Ethereum Request Comment” which actually refers to the request for response to the network. The number “20” is the number assigned to this request. According to reports that Etherscan.io published in July, it appeared that there are more than 100,000 ERC-20 tokens on the Ethereum network.
On the Ethereum network, ERC-20 easily defines a list of rules and regulations that Ethereum tokens must follow on the main network. This allows external developers to accurately predict interactions between tokens in the network.
The rules mentioned above contain;
- How these tokens can be exchanged
- How users access the tokens
How is it made
The Ethereum network is revolutionary in the cryptocurrency industry. The development and launch of this great network in 2014 changed the way things were done. This allowed external developers to create contracts that are capable of creating decentralized applications. On the Ethereum network, decentralized applications can create ERC-20 tokens that can function as a currency or as a share in the company.
Smart contracts are used to create decentralized applications, as well as the ERC-20 token. The smart contracts of Ethereum are written in programming language. Once the token is created by smart contracts on the network, it can be traded, transferred or even given to someone else. It is the common language used by all tokens on the Ethereum network, allowing it to be transferred or traded.
How it makes developers possible
As mentioned above, ERC-20 tokens allow third-party developers to predict how new tokens will work on the larger Ethereum network. In addition, developers with ERC-20 tokens do not have to run projects again every time a new token is released on the network. As long as the tokens have been developed to comply with the rules, they are automatically compatible with all projects.
Reportedly, most tokens released through the Ethereum network are all compatible with ERC-20.
Popular ERC-20 Tokens
EOS; this platform is currently one of the best and most valuable cryptocurrency network and the platform is trying to use inter-blockchain communication.
TRON; ranked in the top 10, TRON is trying to offer a network for the entertainment industry.
Although ERC-20 tokens are useful for developers, there are still several problems. If the tokens are used to pay for Smart Contracts, rather than Ether Tokens, they are usually accidentally destroyed. About $ 3 million worth of tokens have been destroyed. The members of the Ethereum community are working on solving this problem. A new standard will soon be introduced on the network. While this new standard is still being worked on, developers are advised to continue using the ERC-20 token. This new standard will be called “ERC-223”