Crypto Currency

What IS ERC20 Standard & How Does It Work?

Investors without technical expertise may find the crypto world intimidating, but the potential for profits is alluring. Understanding the ERC20 token standard is essential in making sound financial decisions. This standard outlines the rules and behaviors that Ethereum tokens and smart contracts must follow. Every new token generated on the Ethereum network must adhere to these fundamental standards. 

Similarly, the TRC20 token operates on the TRON network, with all transactions occurring on the TRON blockchain. Utilizing Solidity as the underlying programming language, both ERC-20 and TRC20 tokens can work together seamlessly.

Concept Of ERC20 Standard

ERC stands for “Ethereum Request for Comment,” a protocol developed by the Internet Engineering Task Force for communicating technical concerns and requisites to developers and users. The most commonly used platform for building new digital currencies, like non-fungible tokens (NFTs) and tokens for initial coin offerings (ICOs), is the ERC20 standard. 

This standard was created in 2015 by Ethereum developers on behalf of the larger Ethereum community and officially recognized in September 2017. It enumerates the functionalities that a compliant token must possess, including account balance, total token supply, and executing transfers. Developers have the option of adding extra features such as the token’s name, symbol, and decimal places.

Moreover, developers can also integrate additional features into their ERC20 token regulations, such as limiting the token transfer timeframe or early adopter reward systems. Ethereum tokens tradeable through cryptocurrency exchanges like Coinbase or via peer-to-peer transactions.

Bottom LineAs previously stated, the ERC20 standard is responsible for the birth of many of today’s cryptocurrencies. Furthermore, the Ethereum network and its Ether coin are now more valuable as a result of it. Because Ethereum is commonly considered as a platform for blockchain-based apps and services, and the majority of these firms rely on their own ERC20 tokens.

Christopher Stern

Christopher Stern is a Washington-based reporter. Chris spent many years covering tech policy as a business reporter for renowned publications. He has extensive experience covering Congress, the Federal Communications Commission, and the Federal Trade Commissions. He is a graduate of Middlebury College. Email:[email protected]

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