What is an ERC-20?
ERC-20 is a technical standard for creating tokens on the Ethereum blockchain. It was introduced in 2015 and has since become the most widely used token standard for decentralized applications (dApps) and Initial Coin Offerings (ICOs) built on the Ethereum platform.
ERC-20 tokens are digital assets that are built on top of the Ethereum blockchain and can be traded, bought, and sold just like any other cryptocurrency. They are created and managed by smart contracts, which are self-executing computer programs that run on the Ethereum network.
One of the key features of ERC-20 tokens is that they are standardized, meaning they all follow a specific set of rules and guidelines. This standardization makes it easier for developers to create and manage ERC-20 tokens, and for users to understand and interact with them.
The ERC-20 standard defines six basic functions that every ERC-20 token must have: totalSupply, balanceOf, transfer, approve, transferFrom, and allowance. These functions enable the transfer of tokens between users, the tracking of token balances, and the management of token approvals.
In conclusion, ERC-20 is a widely used token standard for creating digital assets on the Ethereum blockchain. It provides a set of guidelines and rules that make it easier for developers to create and manage tokens, and for users to understand and interact with them. By standardizing the creation of tokens, ERC-20 has helped to create a more uniform and user-friendly environment for decentralized applications and ICOs.
Simplified Example
ERC-20 is like a recipe for making cookies. Imagine you want to make cookies, but you don't know how. So, you go to a cookbook and find a recipe for making cookies. The recipe is like the ERC-20 standard - it tells you exactly what ingredients you need, how much of each ingredient to use, and what steps to follow to make the cookies.
Now, if you follow the recipe exactly, you will end up with a batch of delicious cookies that everyone will love. The same is true for ERC-20 tokens - if you follow the ERC-20 standard exactly, you will end up with a digital token that works perfectly and is widely accepted by people and platforms.
So, ERC-20 is like a recipe for making digital tokens. If you follow the recipe, you will end up with a token that works great and is widely used. And, just like cookies, you can make many different types of ERC-20 tokens, each with its own unique flavor.
Who Invented ERC-20?
Fabian Vogelsteller is credited with coining the term "ERC-20." On November 19, 2015, he introduced the concept as an Ethereum Improvement Proposal (EIP) with the purpose of establishing a standardized format for fungible tokens on the Ethereum blockchain. Vogelsteller's proposal laid the groundwork for the ERC-20 standard, which has since become a cornerstone for the creation and implementation of fungible tokens within the Ethereum ecosystem.
Examples
Binance Coin (BNB): Binance Coin is a popular cryptocurrency that was created as an ERC-20 token on the Ethereum blockchain. It is used to pay for trading fees on the Binance exchange, and has also been used for other purposes, such as participating in token sales and staking.
Chainlink (LINK): Chainlink is a decentralized oracle network that was created as an ERC-20 token on the Ethereum blockchain. It provides a secure and decentralized way for smart contracts to access off-chain data, such as market data and API data.
Uniswap (UNI): Uniswap is a decentralized exchange (DEX) that was created as an ERC-20 token on the Ethereum blockchain. It allows users to trade cryptocurrencies and other digital assets without the need for a centralized exchange.