You have heard of “ERC-20” but, have you ever wonder how it came about in the cryptosphere? The history of this profound blockchain system is not as dull as one might think it be. Here is what you need to know about ERC-20 or Ethereum Request for Comment 20.
ERC-20 is the technical standard used for all smart contracts on the Ethereum blockchain for token implementation. For example, EVR token operates on the Ethereum platform which means that it is compliant with the standards of ERC-20. Think of Ethereum as Tesco or Wallmart and ERC-20 is the standards that merchants need to meet such as product safety and etc. Merchants are then allowed to display their products on the platform where consumers can purchase. Same goes to tokens that are backed by Ethereum.
Currently, ERC-20 mainly serves as the basis of tokens that have been released through ICO, Initial Coin Offerings. The ERC-20 standard establishes a common set of rules for tokens issued via Ethereum smart contracts which means that all tokens on Ethereum should adhere to the functions and events of ERC-20 standards as below:
- function totalSupply() public constant returns (uint);
function balanceOf(address tokenOwner) public constant returns (uint balance);
function allowance(address tokenOwner, address spender) public constant returns (uint remaining);
function transfer(address to, uint tokens) public returns (bool success);
function approve(address spender, uint tokens) public returns (bool success);
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);
Ethereum strives to create an ecosystem where everything works together seamlessly as part of its vision for a ‘world computer‘ including the tokens required to power it. The rationale behind ERC-20 allows developers of wallets, exchanges and other smart contracts to know in advance how any new token based on the standard will behave and simultaneously, design their apps to work with these tokens – without having to reinvent the wheel each time a new token system comes along.
Fabian Vogelsteller and Vitalik Buterin worked together to propose the ERC-20 token standard to ensure that all Ethereum-based tokens perform in a predictable way throughout the ecosystem and follow a fixed standard of security.
“Given bull markets tend to at least double the number of participants in crypto, there are more “new people” involved at the end of a bull market than there were “old people” at the beginning — to put it bluntly, the noobs outnumber the OGs.”
Since 2015 – the start of Ethereum, people are getting more involved in cryptocurrency which shows a promising future for the blockchain industry.