What is ERC20 in Blockchain?

People who have been in the cryptocurrency community for a while should have heard of the ERC20 token. But it is not a token, it is a design standard.

In the world of digital currency, in addition to Bitcoin, Litecoin, Zcash, Bitshares, Ripple and other projects with their own blockchain, there is also a platform-type token, Most of them rely on a decentralized smart contract platform like Ethereum (the current ethereum to usd exchange rate ranking is 3^rd now, only lower than Bitcoin and Bitcoin Cach.)

At present, most digital currencies in the market belongs to the platform tokens, such as the EOS that will be launched on the mainnet, QTUM, OmiseGo, etc. that have been switched to the mainnet. This type of digital currency is issued through the Ethereum platform and is based on the platform's ERC 20 token.

 

1. Why we need ERC20?

ERC20 (Ethereum Request for Comments 20) is based on Ethereum, and the native token of Ethereum is ETH. Ethereum can issue not only its own native tokens but also other tokens. In fact, these tokens are created through the smart contract of Ethereum. Because each person's token rules will be different, so as long as you write a smart contract for your own scene, just send some ETH to this smart contract, the contract will automatically return to you a certain number of tokens according to the rules.

 

But as each contract is created differently, It's a tricky business for exchanges and wallet development. And there are thousands of tokens. If the rules of each token are different, it will be very unfavorable for the later market development. So the token issuer made a design standard for the smart contract. That is what we call ERC20.

 

2.What are the functions of the ERC20 token?

ERC20 mainly provides the following operations for the upper layer:

2.1Get the total supply of tokens

2.2Get account balance

2.3Transfer token

2.4Approve the cost of tokens

 

3.Benefits of the ERC20 protocol

Based on the ERC20 token, it is convenient to use only one Ethereum account. ERC20 allows users and exchanges to easily manage multiple tokens, transfers, storage, ICO, and so on. It is like a campus card at university, which can be used for canteen eating, dormitory registration, library registration, campus bus, gym registration.... all these things can be done with only one card, extremely convenient!