What is ERC-20? Seven commandments which you don`t know
Do you know that MLC tokens are tokens of ERC-20 standard? No? Well, now you know. If for you this abbreviation is completely new and means nothing, then start reading the text below! Go!
What is ERC-20, and why haven't you heard anything about it?
Most of ICOs use the Ethereum network as a platform or, more precisely, the smart- contracts of this network. During fundraising campaigns, organizers of ICO usually accept ETH or BTC as payment, charging investors with tokens instead. More often these are tokens of ERC-20 standard, as in the case with FLOGmall.
What does these three letters imply?
ERC (Ethereum Request for Comments) is an official protocol using which you can make suggestions for improving of Ethereum. Number "20" means the identification number. That is, the tokens of the ERC-20 standard are actually smart-contracts on the Ethereum blockchain.
The ERC-20 standard has a set of rules that you should follow in order for a token to be accepted and to be able to interact with other tokens on the network. The tokens themselves are blockchain-assets, which can have value, and can be sent and received like any other cryptocurrency.
Why did you need to create ERC-20?
Before this standard, there were some problems of incompatibility between different forms of Ethereum tokens. Because each of them hides its own unique smart-contract. Ultimately, for a stock exchange or a wallet to support a token without problems (by the way supporting of a growing number of tokens did not become problematic) it was necessary to create a new unified protocol.
What is the difference between the ERC-20 tokens and the traditional cryptocurrency?
Here everything is quite simple. The difference is that they are tied with the Ethereum network, they use the format of addresses accepted within this network and are sent using Ethereum-transactions. Accordingly, transactions involving ERC-20 tokens can be tracked in the block browser.
It is important to understand that the ERC-20 tokens are not completely independent as it was mentioned above, they are based on the Ethereum blockchain, on the distributed computing capabilities of which they rely in their work.
Why were ERC-20 tokens created, and who would need them?
They can be not only a cryptocurrency in the standard sense, but they also act as project shares, certificates that confirm the right to assets or points in the loyalty program. Well, of course to fulfill all these functions at once. Among the most famous tokens based on the ERC-20 standard are 0x, Aragon, Dentacoin, EOS, Civic, BAT, Kucoin, TenX, TTron and Mallcoin for sure.
Well, did you figure it out? Now you can say that you are an expert in ERC standards. Stay with us, we will continue to sort out all your questions!
