ERC20
What are ERC-20 tokens?
Recently, one of the most common methods of raising funds for the launch and development of projects in the cryptocurrency industry has become the so-called initial coin offerings (ICO). Most ICOs use the Ethereum network as a platform, or, more precisely, the smart contracts of this network. When conducting fundraising campaigns, ICO organizers usually accept ETH or BTC as payment, charging tokens to investors in return. Most often these are tokens of the ERC20 standard.
What does the abbreviation ERC-20 mean?
ERC (Ethereum Request for Comments) is the official protocol for making proposals to improve the Ethereum network; 20 is the unique identification number of the proposal. Technical specifications for tokens issued on the Ethereum blockchain were published in 2015. Tokens that meet these specifications are known as ERC-20 standard tokens and are actually smart contracts on the Ethereum blockchain. Despite the fact that ERC-20 tokens function within the framework established by the Ethereum team, this framework is quite wide, providing developers with greater flexibility when creating them.
The ERC-20 standard defines a set of rules that must be followed in order for a token to be accepted and be able to interact with other tokens on the network. The tokens themselves are blockchain assets that can have value, and can also be sent and received like any other cryptocurrency.
What caused the need to create the ERC-20 standard?