There's a lot of acronyms from the cryptocurrency space. This intimidates beginners. The fact that acronyms in this space are occasionally even combinations of numbers and letters confounds that level of intimidation. Long story short, an ERC-20 token is just a cryptocurrency that's built on the Ethereum platform. Do not worry, I will clarify what this means.
A lot of men and women understand Ethereum because it's a cryptocurrency which you are able to trade on Coinbase. Smart contract is merely marketing-speak for code that you can run on a blockchain. In essence, you are able to write code to the Ethereum blockchain. So rather than merely storing historical transactions of money, you can also store logic. And combinations of logic produce the programs and apps we all understand and love.
However, staying true to lingo, we can not just call these apps. In the end, they are not like normal programs -- these apps that are written to the Ethereum blockchain are decentralized by nature since Ethereum itself remains decentralized. So instead, we predict them decentralized apps, or Dapps for short (a few people say d-appsothers simply pronounce it phonetically as dapps).
With the vast majority of those Dapps, creators want to make their own coins (generically referred to as tokens), so users should use their particular coin when interacting with Dapps -- whether that is a good thing or bad thing is up for debate, but I'm not here to answer it in this introductory article.
ERC-20 Is a Standard Describing Ethereum Tokens
Folks quickly started recognizing that creating your coin required specific criteria. It's like making a charge card. Each card includes a black strip on the back to swipe, and most modern cards have a chip on the front. The expiry date, security code, and owner's name are found on the card in places which are so common that smartphone cameras can quickly recognize them by scanning them.
There is a list of rules which the tokens must adapt to but I won't get into the details in this explanation.
Without getting into the intricate details of why notjust understand that trades generate unique addresses for every coin. To put it differently, your Ethereum address and your ERC-20 token addresses are going to be different. If you try to send an ERC-20 token to your exchange's Ethereum speech, the exchange won't comprehend it and you will not be credited the ERC-20 tokens. In your own wallet, though, you are able to hold some Ethereum-based currencies that you want. You have noticed I used both the terms address and wallet. If you believe that they're the same, then you are mistaken.
Since Ethereum launched with intelligent contracts in 2015, many different blockchains have emerged with their own take on smart-contract functionality. By way of instance, NEO is a blockchain which uses conventional programming languages such as Java for scripting contracts, whilst Ethereum has its own terminology, Solidity. However, if what I just said doesn't make sense to you, don't worry -- only know that there are other blockchains that may host smart contracts other than Ethereum.
Ethereum has first-mover advantage, though, and has been the greatest market cap of almost any smart-contracts-enabled blockchain. Boil it down, and everything that essentially means is that there is more support in the industry for Ethereum than for other competitors. If you're trying to build a Dapp and company about it, you would probably want to opt for the safest option -- the one that may still be around in a few years.
Of course, this isn't to mention that the competitors won't be around. However, with thousands of Dapps constructed and tons more money already invested into Ethereum, it is still far ahead of competitors concerning adoption.
Whenever somebody says"Ethereum Token" or"ERC-20 Token" or something else along those lines, I expect you are not immediately intimidated and turning the loading screen on mind trying to decipher exactly what your just discovered. It's only a cryptocurrency that is constructed on the Ethereum blockchain.
If you want to know more about blockchain developement or ERC tokens, get in touch with our developement team.