ERC20 AND TRC20 difference and its explain

The world of digital assets is not as simple as it seems. People interested in the cryptocurrency market do not always have the necessary knowledge. Even investors with some experience in this area are not always well versed in crypto. Lack of basic technical knowledge can lead to loss of capital, so it is important to study important aspects of the crypto industry. The most significant topics that a beginner should become familiar with first are blockchain technology and the concept of a erc20 token standard. We invite you to familiarize yourself with this concept using the example of the stable coin Tether (USDT).

A simple explanation of the token standard

The token standard contains a set of rules according to which digital currencies are regulated. In other words, a token standard defines a mechanism for creating, issuing, and deploying new tokens on a specific blockchain.

What is Tether

Tether (USDT) is a stablecoin that aims to protect against the volatility of other cryptocurrencies. The creator of the stablecoin is Tether Limited. USDT was developed in 2014 and released in 2015. Its exchange rate is backed by US dollar reserves, pegged 1:1 to fiat. According to CoinMarketCap data, the token is in third place by market capitalization ($65.9 billion). Tether’s popularity and high trading volume make it more convenient to use than other stablecoins. USDT is available for purchase on most leading cryptocurrency exchanges.

The stablecoin was originally based on the Bitcoin blockchain, but was soon integrated into other networks, which helped it become widely available.

USDT supports the following token standards:

• The Ethereum blockchain is ERC-20.

• In the TRON network — TRC-20.

• BEP-2 is available on the Binance blockchain.

• BEP-20 is supported by the Binance smart chain.

• Briefly about blockchain

Blockchain is a public database that stores information in a digital format. These ledgers are especially popular in the cryptocurrency world because they are decentralized in nature, eliminating the need for a trusted third party.

The blockchain consists of blocks that store information about each transaction, such as the addresses of the participants in the transaction and its cost. At the same time, the personal data of wallet owners is private, which guarantees security.

Ethereum is a blockchain-based decentralized software platform. The Ethereum network has a native token called ETH. Blockchain uses ERC-20 tokens to create and issue smart contracts on the network. ERC stands for “Ethereum request for comment”. The ERC20 token development standard was introduced in 2015. Many well-known digital currencies are based on ERC-20, such as Maker (MKR), Basic Attention Token (BAT), Augur (REP), and OMG Network (OMG).

TRON is a blockchain-based decentralized digital platform that has a native TRX token. TRON is often compared to Ethereum because they are similar in design. TRC‌-20 is the technical standard that is used for smart contracts on the TRON blockchain.

What is the difference between ERC20 and TRC-20 USDT Sales of the ERC-20 stablecoin started in 2018. Integration into the Ethereum blockchain has made USDT compatible with decentralized applications on the network. In addition, it helped increase the speed of transactions. Tether stablecoins make up about 50% of the coin’s total supply.

Then, in 2019, USDT was integrated into the TRON network using the TRC-20 protocol.

What is the difference between USDT ERC-20 and TRC-20

In fact, the main difference between the Tether stablecoin of different standards is the amount of transaction fees. The Ethereum blockchain is characterized by low data processing speed and high transaction fees.

USDT is known as the most transactable cryptocurrency token, so the difference in fees across different blockchains is a deciding factor for investors. In terms of transaction fees, the TRON network is more profitable for users as it has lower fees than Ethereum. Thus, by choosing TRC-20 standard USDT, investors pay less for cryptocurrency transactions.

One of the advantages of using ERC-20 tokens is the ability to exchange USDT for other coins of this standard. The most popular digital currencies of the ERC-20 protocol are Decentraland (MANA), Chainlink (LINK) or Uniswap (UNI). In turn, exchange operations with Tether TRC-20 include several additional steps to obtain the same tokens. As a result, this will result in unnecessary waste of funds and lost time for the investor.

Thus, the key differences between USDT ERC-20 and TRC-20 are:

Transaction fees (in the TRON network they are lower and are charged in native tokens of the TRX blockchain. In the Ethereum blockchain,

• transaction fees are charged in ETH coins).

• Release protocol.

• Transaction time (transactions on the TRON blockchain are fast).

• Security (Ethereum network is reliable and very popular).

• Storage method (not all cryptocurrency wallets support TRC-20 standard tokens).

USDT TRC-20 tokens provide all the same features and benefits of create ERC20 token , with a few exceptions: Since the Ethereum blockchain is more congested, this results in higher transaction fees. Therefore, TRON-based coins are becoming increasingly popular among users, especially those who interact with stable coins. USDT TRC-20 tokens are characterized by fast confirmation of transactions and low commissions on the network.