What is an ERC20 Token?

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If you are going to delve into cryptocurrency, you will regularly come across the term ERC20 token, but what does this mean? 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 adhered to in order to issue tokens on the network. It is the case that a large number of tokens run on the Ethereum network. Well-known examples of this are: Basic Attention Token OmiseGO Augur Holo 0x All these tokens use the Ethereum network and comply with the ERC20 standard and the conditions contained therein.

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, which websites must adhere to. For example, tokens must also comply with all the requirements set out in the ERC20 standard. These requirements are incorporated into so-called smart contracts. If you fail to comply with these requirements, you are not ERC20 compliant, and the token is not considered ERC20. Cryptocurrency with other blockchains is therefore not ERC20 compliant. Think of coins such as Bitcoin and Ripple.