Would love your thoughts, please comment.x

What is ERC-20 Token?


16 July

What is ERC-20 Token

Bitcoin was the first globally renowned cryptocurrency, while Ethereum was the first blockchain-based cryptocurrency with a large variety of certain means in one single net. For these means to be available and work steadily, it includes the function of accepting other tokens in its net, which are called ERC-20 tokens.

Just like other cryptocurrencies, ERC-20 tokens can be subjected to various operations in one single profitable network. Except for it, ERC-20 are also used defined as Ethereum affiliates – apps, finance, exchange, etc.

ERC-20 is characterized by fixed supply in order to prevent the negative impact of inflation. Despite this, some ERC-20 tokens have an extended supply, which allows preventing the shortage. Certain ERC-20 tokens also have a price indicator that can be equal to that of another ERC-20, it represents its fungibility. Despite this, if ERC-20 is used illicitly, its value may drop significantly.

The popularity of ERC-20 Tokens

Ethereum network is designed to host and create internet projects. Despite the fact that the variety of projects finally caused failures concerning the interaction between projects created by various people, it was then tried to be regulated with the help of defined Apps. In order to make the decision of such problems more stable, Ethereum established some rules within its network, using smart contracts, verifying the accordance of tokens with these rules. Certainly, these tokens were called ERC-20.

ERC-20 facilitated the improvement of inter-project connections, which in its turn led to the overall improvement of blockchain. Other networks besides Ethereum have started integrating these same rules to have their own tokens. For instance, Binance blockchain uses BEP-20 tokens.

There are such ERC-20 tokens as EOS (EOS), Chainlink (LINK), OmiseGO (OMG), Zilliqa (ZIL), etc.

Investing reporter

Create and order your mining farm