ERC 20 Token Standard - A complete Guide

One of the most popular cryptocurrency and blockchain network " Ethereum" is making competition with " Bitcoin". There are many tokens build on the Ethereum on various standards.

Here let us have a look at the most popular ethereum token standard " ERC 20 ".

What is an ERC20 token?

Like HTTP protocol for the internet, there are different protocols for issuing a token on Ethereum network.

ERC 20 is a token standard that defines some set of rules and standards for creating tokens on the Ethereum blockchain network. 
ERC 20 - ERC refers to Ethereum Request for Comments; 20 refers for a unique ID number that differentiates this standard from other standards.

What makes ERC20 tokens so attractive and successful than other ERC standards?

As of there are many ERC token standards to develop tokens on the Ethereum. Here let us look at the major aspects which make ERC 20 token specification more attractive and successful. 

1. It is easy and simple to develop and deploy the tokens on the ERC 20 standards.

2. The ERC 20 protocol, as a blockchain-based marketplace can solve the significant problem. These ERC 20 wallets need a single standardized set of rules to communicate and manage the set of tokens. 
This communication involves the interaction between different tokens and purchase rules too.

3. ERC 20 is the first and foremost popular specification to offer the best Ethereum Token Protocol.

4. Not because it was the first standard, but for its popularity, this ERC 20 has become the industry specified token standards.

5. The most common things between other ethereum token standards and ERC 20 standard are it is also implemented on smart contracts and executed in a decentralized manner on Ethereum Virtual Machine (EVM).

Benefits of ERC20 Standard

There are many start-ups and Dapps that uses their own standards to create tokens on the ethereum network, before the arrival of ERC 20 token standards. However the entry of ERC 20 specification had made things change and streamlined. Besides, ERC 20 token standard has a lot of benefits.

Listed here are some of the benefits of ERC 20 token.

1. Less complexity to understand the token implementation.
2. High Liquidity.
3. Risk-free for the breaking of smart contracts.
4. Uniformity of Protocols.
5. Remains relatively nascent.

Functions defined by ERC 20 

A smart contract for a token that is hosted on the Ethereum Blockchain Network will send, receive, check for its total supply, check for the amount of available on each address allows for Ether and Bitcoin transfer and this standard of token creation on ethereum network is known as ERC 20 token standard.

The functionalities that ERC 20 token smart contracts have are listed below:

1. balanceOf

balanceof() is an ERC 20 smart contract's function that allows the storing and returning of the balance of the address that is provided. This function accepts an address as a parameter and it represents the balance of any address is completely public.

2. totalSupply

This totalSupply() function allows the contract to calculate and return the amount of total tokens that are in circulation, even though the supply can be easily fixed.

3. transfer

The transfer() function allows the contract owner to send a given amount of tokens to another address.

4. transferFrom

This transferFrom() allows automatic transfer of the given amount of tokens to address specified on behalf of the smart contract owner.

5. Approve 

When calling approve() function, the smart contract's owner authorizes or approves the given address for the withdrawal of tokens from owner’s address.

6. Allowance

This allowance() allows the owner of the smart contract for the transfer of some amount of tokens to another address.

7. Token Name 

This is an optional function and many popular tokens include this function in their smart contracts.

8. Token Symbol

This is also an optional field and it is a three or four-letter abbreviation of token used for the identification of tokens.

 

Conclusion

In conclusion, the ERC20 token development standard has fundamentally transformed the landscape of blockchain technology and paved the way for the widespread adoption and implementation of digital assets and cryptocurrencies. Bitdeal, a prominent Token Development Company offers leading Ethereum token development services that can be used in various cases for businesses that are looking to tokenize their business assets with the powerful Ethereum.