What is an ERC20 Token?
If you are researching a crypto you will regularly come across the term ERC20 token, but what is an ERC20 token? It all has to do with the Ethereum blockchain and its network. ERC20 is a protocol standard used for the Ethereum network. The protocol contains certain rules and standards that must be followed in order to publish tokens on the network. A large number of tokens run on the Ethereum network. Here are some well-known examples:
- Basic Attention Token
All these tokens use the Ethereum network and comply with the ERC20 standard and its conditions.
What is the ERC20 standard?
ERC stands for Ethereum Request For Comments and the 20 stands for the unique ID number to distinguish this standard from others. It can be compared to the HTTPS protocol for the internet, to which websites must adhere. In the same way, tokens must also comply with all the requirements set in the ERC20 standard. These requirements are incorporated in the so-called smart contracts. If you do not comply with these requirements you are not ERC20 compliant, and the token is not considered to be ERC20.
Cryptocurrency with other blockchains are therefore not ERC20 compliant. For example Bitcoin and Ripple.