ERC-20 Definition
ERC-20 is a specific type of token standard utilized within the Ethereum blockchain. It spells out a list of rules that all Ethereum tokens must adhere to, ensuring interoperability between different tokens.
ERC-20 Key Points
- ERC-20 is a technical standard used for smart contracts on the Ethereum blockchain for implementing tokens.
- It provides a standard interface for tokens, permitting interaction across different tokens on the Ethereum blockchain.
- The adoption of this standard has significantly contributed to the ICO boom, due to its ease of implementation and interoperability.
What is ERC-20?
ERC stands for Ethereum Request for Comment, and 20 is the number assigned to this specific request. ERC-20 is a technical standard used for all smart contracts on the Ethereum blockchain for token implementation. It’s essentially a blueprint for what Ethereum-based tokens should look like and how they should behave.
Who uses ERC-20?
ERC-20 is primarily used by developers building applications or digital tokens on the Ethereum blockchain. It is a highly prevalent standard, with the vast majority of tokens issued on the Ethereum network complying with the ERC-20 rules, including many of the most popular and well-known tokens.
When is ERC-20 used?
ERC-20 is often used when a new token is being created on the Ethereum blockchain, especially during the “Initial Coin Offering” (ICO) phase of a new project. This standard provides the basic functionality to transfer tokens and allow tokens to be approved so they can be spent by another on-chain third party.
Where is ERC-20 used?
As a technical standard, ERC-20 is used within the Ethereum blockchain– a global, open-source platform for decentralized applications (DApps).
Why is ERC-20 important?
ERC-20 is critical because it has been adopted as the standard for issuing new tokens on the Ethereum network. This standardization reduces complexity and enhances interoperability between different tokens. By following the same set of rules, ERC-20 tokens can interact seamlessly with one another as well as with Ethereum’s native cryptocurrency, Ether (ETH).
How does ERC-20 work?
ERC-20 defines a common list of rules that an Ethereum token has to follow, including how the tokens are transferred between addresses and how data within each token is accessed. This includes a specific set of functions and events that the contract must implement to enable interoperability across various interfaces within the Ethereum ecosystem. This fosters improved communication between different tokens, making the overall system efficient and easier to navigate.
