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What is ERC 20 Token?

ERC 20 (Ethereum Request for Comment) Tokens are used in Ethereum as a common cryptocurrency on its blockchain system. These tokens can be purchased, sold, or exchanged. Ethereum was first released in 2015, and since then, it has been one of the most common cryptocurrencies. Tokens reflect a wide variety of digital properties in the Ethereum ecosystem, including coupons, IOUs, and even real-world, physical objects. To be precise, The Ethereum tokens are fundamentally smart contracts that run on the Ethereum blockchain.

Understanding The ERC

The ERC-20 token is one of the most important Ethereum tokens. ERC-20 has a distinctive set of rules; which is used in all smart contracts on the Ethereum network for token execution and establishes a set of guidelines that must be followed by all Ethereum-based tokens.

ERC-20 tokens are based on blockchain technology and the tokens can be sent and collected, similar to bitcoin, Litecoin, and some other cryptocurrencies in certain ways. The only distinction is that ERC-20 tokens are distributed on the Ethereum network rather than on their own blockchain.

The Standard Code of ERC 20

As of now, Ethereum’s key network has more than 200,000 ERC-20 compatible tokens. The ERC-20 is essential; a standard set of rules must be established for all Ethereum tokens. Standard provisions of this set of rules are as follows: how to pass tokens, how to authorize transfers, how users will view tokens, and how to provide tokens with full details.

This special token allows developers of all sorts to predict precisely how new tokens will run in the wider Ethereum ecosystem. The challenge for developers is simple; they can continue their work, ensuring that a new project will not have to be restored every time a new token is launched so long as the token complies with the rules. Such enforcement is also requisite; it makes sure that the tokens released at Ethereum are compatible.

Interestingly, the multitude of token creators has complied with ERC-20 laws, which means the majority of tokens issued from Ethereum’s first coin agreements comply with ERC-20.

Many of the popular digital currencies, such as Maker, Basic Attention Token (BAT), Augur, REP, and OmiseGO, use the ERC-20 standard (OMG).

If you are planning to buy a  virtual currency that is distributed as an ERC-20 token then you will need a wallet to store it. Fortunately, because of the popularity of ERC-20 tokens, there are several wallet choices that include Metmask, TrueWallet, Exodus and many more.

A Small Gist Create An ERC 20 Token

It has been seen that at least 65% of Ethereum contracts are ERC 20 compliant. Making it a standard choice among all Ethereum tokens. To begin with, you must have an understanding of the programming language. The language Ethereum is based on is “Solidity”. It is similar to JavaScript, so if you have command over JavaScript then working on Solidity will be a cakewalk.

The most important part of creating an ERC token is writing the code on Solidity. To develop smart contracts you need to write some logic to the ERC token. After being done with this, proceed to set up the number of ICO tokens. 

The ERC -20 implementation looks like this, it can have more complex associated logic in Smart Contracts.

interface ERC20 {
    function totalSupply() public view returns (uint);
    function balanceOf(address tokenOwner) public view returns (uint balance);
    function transfer(address to, uint tokens) public returns (bool success);
    function approve(address spender, uint tokens) public returns (bool success);
    function allowance(address tokenOwner, address spender) public view returns (uint remaining);
    function transferFrom(address from, address to, uint tokens) public returns (bool success);

    event Transfer(address indexed from, address indexed to, uint tokens);
    event Approval(address indexed tokenOwner, address indexed spender, uint tokens);

Now that we’ve covered the foundations and explained how to build an ERC20 token, let’s move on to the next step.

Development of Ethereum Contract

It’s almost time to put our contract on the blockchain. Our contract will be passed to all nodes operating in the network after rollout. And all other contract updates will be spread to all participating nodes.

Truffle is a popular deployment platform used by Ethereum developers. For the purposes of this post, even Truffle is way over the top, however, a basic online tool called “Remix” can be used instead.

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Last modified on August 3rd, 2023 at 4:34 pm