What is ERC-20 Token?

What is an ERC-20 token?

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ERC-20 is digital token1 standard that can represent assets that run on the Ethereum blockchain.

ERC stands for “Ethereum Request for Comments”. 20 represents the unique proposal ID number.

The Ethereum blockchain records transactions which are comprised of smart contracts that create tokens, such as ERC-20.

Ethereum tokens must run on the Ethereum network. There are other types of tokens that can run on the Ethereum network, such as ERC-7212, and ERC-20 tokens use the same common set of rules that all Ethereum tokens must follow.

ERC-20 tokens are commonly used in money applications whereas ERC-721 tokens can be used for assets or things that need to be unique.

Ethereum is one of the cryptocurrencies accepted by Coinbase, a leading U.S. cryptocurrency trading platform, and Coinbase recently adopted standards to accept ERC-20 tokens.

ERC-20 Standards:

There are 6 mandatory and 3 optional standards that ERC-20 tokens must follow:

Optional

  • Token Name
  • Symbol
  • Decimal (up to 18)

Mandatory

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

ERC-20 tokens are the most popular tokens used on the Ethereum network and ERC-20 tokens are often the structure of choice for initial coin offerings (ICOs).

Indeed, the fifth most valuable cryptocurrency, EOS, is essentially an ERC-20 token.

With a market cap of over $6 billion, perhaps EOS’ valuation should be added to Ethereum’s $44 billion market cap…?!

There are many other ERC-20 based tokens in existence… Including:

0x, Aragon, Augur, Adtoken, Aeron, Aeternity, Aion, Airswap, Amber, AppCoins, Binance Coin, BAT, Bancor, Bread, ChainLink, Cindicator, Civic, Decentraland, Dent, Dentacoin, DigixDAO, Dragon, District0x, EOS, Edgeless, Ethos, FirstBlood, FunFair, Gnosis, Golem, Genesis Vision, ICON, Iconomi, Kin, KodakCoin, KuCoin, Kyber, Loopring, Lunyr, Maker, MediShares, Melonport, Metal, Monaco, Matchpool, Numeraire, OmiseGo, Pillar, Po.et, Polymath, Populous, Power Ledger, Qash, Quantstamp, Raiden, RChain, Request, Revain, Ripio, Rivetz, SALT, Santiment, SingularDTV, Status, Storj, Storm, Substratum, TAAS, TenX, Time New Bank, Tron, VeChain, Veritaseum, Viberate, Walton, Wax, WeTrust, Wings and iExec RLC.3

Footnotes

  1. What is the difference between a coin and a token?
  2. The ERC-721 token is the non-fungible Ethereum based token the “CryptoKitties” phenomenon uses.
  3. HT to Exodus Wallet.