What is an ERC20 Token?
If you are researching crypto you will regularly come across the term ERC20 token, but what is an ERC20 token? It all has to do with the Ethereum blockchain and its network. ERC20 is a protocol standard used for the Ethereum network. The protocol contains certain rules and standards that must be followed in order to publish tokens on the network. A large number of tokens run on the Ethereum network. Here are some well-known examples:
- Basic Attention Token
All these tokens use the Ethereum network and comply with the ERC20 standard and its conditions.
What is the ERC20 standard?
ERC stands for Ethereum Request For Comments and the 20 stands for the unique ID number to distinguish this standard from others. It can be compared to the HTTPS protocol for the internet, to which websites must adhere. In the same way, tokens must also comply with all the requirements set in the ERC20 standard. These requirements are incorporated into so-called smart contracts. If you do not comply with these requirements you are not ERC20 compliant, and the token is not considered to be ERC20.
Cryptocurrency with other blockchains is therefore not ERC20 compliant. For example Bitcoin and Ripple.
Several new ERC token standards
After the continued development of ERC-20 Tokens, many new token standards have been proposed, and of course, in order not to affect compatibility in the introduction of the new standard, these proposals are considered. thoroughly by Ethereum developers and community. Here are some new ERC token standards:
ERC-20 Defines a Common List of Rules
- The ERC-20 commands vital importance; it defines a common list of rules that all Ethereum tokens must adhere to. Some of these rules include how the tokens can be transferred, how transactions are approved, how users can access data about a token, and the total supply of tokens.
- Consequently, this particular token empowers developers of all types to accurately predict how new tokens will function within the larger Ethereum system. This simplifies the task set forth for developers; they can proceed with their work knowing that each and every new project won’t need to be redone every time a new token is released, as long as the token follows the rules. This compliance is also necessary; it ensures compatibility between the many different tokens issued on Ethereum.
- Fortunately, the vast majority of token developers have fallen in line with ERC-20 rules, meaning that most of the tokens released through Ethereum’s initial coin offerings are ERC-20 compliant.
- Plenty of well-known digital currencies use the ERC-20 standard, including Maker (MKR), Basic Attention Token (BAT), Augur (REP), and OmiseGO (OMG). If you are planning on purchasing any digital currency that’s issued as an ERC-20 token, you must also have a wallet that is compatible with these tokens. Luckily, because ERC-20 tokens are so popular, there are many different options for wallets.
Which wallet is the safest to store ERC20 tokens?
Not only ERC20 Token but all of the tokens mentioned above are developed on the Ethereum platform, so they can be stored at Ethereum wallets. However, you should note that some wallets support creating and storing ETH but not ERC tokens, you cannot store ERC tokens, for example, Blockchain or Coinbase. In addition, when these tokens are listed on exchanges, you can also store them on the exchange’s wallet, below I will list some wallets that support the most popular and safest ERC tokens you can use. : (Click on the name of the top wallet to see instructions.)
- My Ether Wallet: This is the ETH and ERC token storage wallet, maybe it is the most popular today, however, it is a bit banal that there are no security features at all, this is also the reason that many users have been hacked. , because this is not very safe if you do not know how to secure and keep your computer free from viruses.
- ImToken Wallet: This is a mobile wallet, the most secure ETH and ERC token storage service that I am using, I recommend you to use this ImToken wallet.
- Metamask Wallet: This is also a pretty safe wallet for you, it is an Extension wallet on a chrome web browser, I am writing instructions to create and use this wallet, will update on ToiyeuBitcoin.com for you to see. Please.
- Ledger and Trezor wallets: These are two types of hard wallets or cold wallets that are quite popular and safe to store ETH and ERC tokens, but it’s a bit complicated to use, I will have the following instructions.
- Mist wallets, Parity (desktop wallets) and Trust, Cipher (mobile wallet): Some other wallets, but it is not lost in popularity and few people use it, you can refer.
- Exchange wallets: In addition, if you regularly trade in ERC tokens, you can transfer them to the exchange’s wallet for convenience, but of course, the exchange wallet will be riskier than keeping it in your own wallet.
Where to buy ERC-20 tokens?
There will be 2 ways for you to own ERC-20 tokens or another as follows:
Buying from ICO projects: This is the most common way that investors can buy ERC tokens, most ICO projects use the ERC20 Token standard and when you buy Tokens at the ICO stage, the token price is the cheapest.
Buying from exchanges: After the ICO ends, the project development team will try to list tokens on exchanges, if you can’t buy when you open the ICO sale, you can buy on the exchange, the token price on the exchange could be higher or lower than the ICO price.
Above is the whole knowledge about ERC, ERC-20 Token, and other ERC tokens. Hopefully, it will bring a lot of useful information for readers.