If you go ahead and check the smart contract’s source code, you will find all the functions that an ERC-20 token should have. In the yellow box, you can also see the smart contract address of OMG starting with ‘0xd26…’. 4 OMG tokens where transacted between two Ethereum addresses. But on closer examination, you will find 162. If you look closely you will find that Ether transfer is ‘0’ and it will look like zero value was transacted (see the red box ). To make it is simpler to understand consider this example of an ERC20 token i.e. This is the reason why, when you send ERC20 tokens, you are required to have some Ethereum as GAS. Like I stated earlier, ERC 20 tokens don’t have their dedicated blockchain and thrive on Ethereum’s blockchain instead. Instead, they thrive on Ethereum’s blockchain and bring several benefits for the users which I will discuss further in this article.ĭifference Between Standalone Cryptocurrencies & ERC20 Tokens These are crypto-assets or crypto-tokens which can be traded like Bitcoin or Ethereum or Litecoin but unlike these cryptocurrencies, they don’t have their dedicated blockchain. includes the necessary functions in their token implementation which are deemed as ERC20 tokens. So, those tokens on Ethereum’s network checks all the necessary boxes i.e. If you don’t include the mandatory functions, you are not ERC20. To put it in layman terms, if you include certain functions in the token’s smart contract, you are ERC20 compliant. Similar to the fact that we have an HTTP protocol for internet, we have a standard protocol for tokens to be issued on Ethereum i.e. In ‘ERC20’, ERC stands for Ethereum Request For Comments and 20 stands for a unique ID number to distinguish this standard from others. What is an ERC20 Token?ĮRC20 is a protocol standard that defines certain rules and standards for issuing tokens on Ethereum’s network. Hence, I am here to tell you about what these ERC tokens and to tell you if they really are worth in exchange for your ETH and BTC. However, did anyone pause and reflect on the value of these tokens they were collecting or what exactly these token were? Or where they come from? Is that the only thing one needs to raise millions of funds? I guess only a handful of us actually paid attention to these.
Some ICOs like Tezos and Filecoin went on to raise humongous amounts – $232 million and $252 million respectively! (Clueless about ICOs? Check our extensive guide on it here.) I know many of us also participated in such ICOs that were offering these tokens in exchange for ETH or BTC.
If you are reading this, chances are you may have heard of the term ‘ERC20’ in last year’s ICO boom.Įvery new start-up ICO last year was coming up with their whitepapers and ‘ERC20 tokens’ to collect millions from crowdfunding.
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