New technologies for cryptocurrencies. what are ERC-20 tokens

The history of cryptocurrencies goes back more than 10 years. The first Project was Bitcoin before other companies joined in seeing the simplicity and convenience of such technologies. One of the best alternatives was Ethereum , created by Russian-Canadian programmer Vitaly Buterin. This cryptocurrency became a real sensation because it used very interesting and convenient technologies. In this article, you will learn what the ERC-20 standard is and additional useful information.

One of Vitalik Buterin’s innovations was the ERC20 token development company. Its peculiarity is the definition of the requirements for the operation and the operation mechanism of the cryptographic tokens located in this system.

The abbreviation stands for “Ethereum Request for Comments”. The number 20 is a value that identifies a specific offer. In 2015, the technological features within the ETH blockchain were announced . These ERC-20 compliant tokens are smart contracts that operate on the Ethereum blockchain.

This is possible due to the fact that the protocol defines a set of rules for accepting tokens into the system. Formed according to the standard, the coins easily interact with the rest, located there as well. They are blockchain assets that have a certain value in the cryptocurrency exchange, they can be sent to other users, received and also perform other actions like any other electronic currency.

Features of work of ERC-20 standard tokens

For cryptocurrencies, just like for software, a “standard” is a specific set of features and developer requirements. When a new product is created, the currency will be compatible with the system, since it must follow the rules. The ERC-20 establishes the requirements for the operation of the tokens mined on the Ethereum cryptocurrency chain. Consequently, all tokens created on the blockchain follow this standard.

The important thing is that the program is open source. Therefore, the answer to “can you mine ERC-20?” is if”. Each developer has the opportunity to open the original data on the project’s GitHub site. This helps to create new coins that comply with the specified standard, which are fully compatible with it. The main goal of the introduction was the need to simplify transactions between Ethereum wallets, exchanges, and smart contracts.

These smart contracts are always used to generate new tokens. Thanks to this, transactions are carried out between the parties to the transaction, also taking into account the amount of funds of each of them.

On the Ethereum blockchain, tokens are commodities involved in trading. It can be coins, loyalty points and others. Ethereum allows its users to create cryptocurrencies that are compatible with software clients that fit seamlessly into digital wallets that work according to established standards. Smart contracts are used at this point for data transfer. They start automatically, run on the system and handle information, code, work with other contracts, etc. The Solidity language is used to create contracts. Ethereum funds are stored in the MetaMask digital environment

Features of cryptocurrency and what ERC-20 tokens can do

Now you know how ERC-20 tokens are created. The next thing you need is to understand how they are traded. ERC-20 tokens also belong to the ETH network but have a different designation. The blockchain can transact with them and process data. Smart contracts operate on the blockchain principle. The tokens created in this way are not independent, although they differ from the original ones. They operate on the Ethereum blockchain, so the computing power of this chain has a certain impact.

A transaction involving these coins is executed as follows:

The buyer transfers funds to the smart contract;

The funds are automatically redirected to the contract owner (which is also done using a robot);

The robot transfers the tokens that the creator of the ICO had, to the person who made the payment.

Other ERC standards

This technology turned out to be very convenient and productive, which led to further development. Today there are ERC-20, ERC-155, ERC-223, ERC-721 coins. The differences can be found below:

ERC-223. There is a drawback in the ERC-20 system: people can make a transaction on a smart contract, believing that they are sending it to a normal wallet, for which some users’ money has already been lost. In ERC-223, this bug has been fixed: here you have the ability to transfer tokens to smart contracts and wallets. Also, with ERC-223, unlike ERC-20, a transfer requires one operation, not two, which means half the amount of ETH to pay for it. This standard is considered to be the most promising in the future.

ERC-721. it was unveiled at the end of 2017. The main difference is that the program allows you to create non-convertible tokens (NFTs). That is, within the same platform or ecosystem, there may be tokens with different values.

ERC-155. Another way to improve the details of the ERC-20. Thanks to ERC-155, it is harder to lose tokens as multiple transaction processing mechanisms are now available. It uses a registry that provides validation of supported functions. There is also also the concept of “approved carrier”, which means that users can trust smart contracts and transfer money on their behalf.

The best ERC-20 tokens

Many investors and users believe that this technology has very good projections, especially after the flaws have been improved. Therefore, the question of how to buy ERC-20 tokens is being asked much more frequently. In addition, there is now a list of ERC-20 tokens of popular cryptocurrencies at the moment.

EOS. The capitalization of this cryptocurrency is approximately $6 billion. This is the largest indicator among cryptocurrencies based on the ERC-20 token generator . EOS has its own blockchain and uses Ethereum tokens. It also provides support for solutions that use open source for Dapps applications.

Tron. This protocol was created for the entertainment industry. Tron has its own blockchain. Standard publishing systems go through phases of censorship and rigorous scrutiny. The same applies to the promotion of multimedia content. Authors were often left without the opportunity to develop their full potential and could not receive remuneration. Tron allows them to have content published in a decentralized way. The cryptocurrency provides a direct relationship between the consumer and the content creator, excluding the intermediate stages of control. The first major user of this cryptocurrency was the Chinese app Peiwo.

OmiseGo. The main goal of introducing a cryptocurrency based on ERC-20 technology is the gradual transition of almost all financial services to a decentralized basis. A full migration would give users full access to these services without being tied to a bank account.

Icon. This cryptocurrency was designed by the Korean company Dayli. The main goal of creating a cryptocurrency was to increase the efficiency of the data exchange process between institutions that differ in their type of work, industry and other characteristics. The concept was used to implement this process. This is a high performance chain. The connection of blockchain elements is present without the involvement of intermediaries. It does not require interaction with the information storage service, nor a centralized hosting.

BinanceCoin. This Ethereum-based cryptocurrency was created to facilitate the implementation of electronic currency procedures on the Binance exchange. BNB has its own Blockchain.erc20 token development The main goal was to pass the exchange commission on to themselves. Plans included its development on a platform, which would allow further sharing of smart contracts.

The unification of functions and simpler token development provided an opportunity for the penetration of the blockchain principle in completely different areas of human life.