A token is an accounting unit intended to reflect the digital balance of a certain commodity, that is, to be used as a digital “securities replacement.” Tokens are blockchain assets with a certain value. They can be sent and received like any cryptocurrency.
ERC-20 is the token standard of the Ethereum network. On the Ethereum blockchain, ERC20 tokens are generated and hosted on. Tokens ERC20 are processed and distributed via Ethereum addresses and transactions and gas is used to cover payments for the transaction.
ERC-20 is the Ethereum platform token standard. ERC stands for- Ethereum Request for Comments – request for comments in Ethereum. This is a special protocol that helps you to make recommendations for the blockchain enhancement on the network. The number 20 serves as a proposal identifier. The Protocol ERC-20 sets a series of rules to be followed to allow the token to communicate with other tokens within the network. This token norm specifies a series of rules that apply to all ERC20 tokens that allow them to communicate seamlessly with each other.
erc20 token

Reasons for creating ERC20

The ERC20 standard protocol was created in 2015 by the founder of the Ethereum platform, Vitaly Buterin. The key aims of the development of this protocol:
  • the substitution of securities in virtual worlds.
  • ensuring the universality of virtual currency.
  • conduct an ICO – fundraising for the development of the company.
Before the protocol was created, each token has a particular form of the smart contract. And for a crypto exchange or wallet to operate with a new coin, the developers had to write a new document. The ERC-20 specification has made it easier to overcome compatibility issues and support multiple tokens.
The specification provides a series of rules under which all tokens built based on this protocol. With ERC-20, you no longer have to build a new token program code. Following the implementation of the ERC-20 protocol, the ICO market started to grow exponentially. Developers require no more protocols of compatibility for exchange utility tokens, blockchain networks, storage, DApps.