Top 20 Ethereum blockchain ERC20 tokens
While many people are aware of ERC-20 tokens, not many truly understand what they are.
The letters ERC, which stand for Ethereum Request for Comment, and 20 are chosen at random for each proposal.
ERC-20 Basics
The native currency of the Ethereum blockchain is Ether (ETH), but ERC-20 tokens also serve as coins on the Ethereum network. Their transactions are handled by the blockchain, and smart contracts are executed on the Ethereum virtual machine.
Ethereum.org describes the ICO mechanism as follows:
The smart contract is paid by the buyer (the money goes to the robot).
The robot redirects them to the contract owner.
The robot transfers tokens belonging to the ICO creator to the buyer.
Remember that these tokens are not independent. They run on the Ethereum blockchain and depend on the computing power of its network.
Risks of smart contracts
Smart contracts carry some risks even though they are incredibly efficient. For instance, once developers start an initial coin offering (ICO), a smart contract cannot be altered. Should the contract have errors or weaknesses, you might forfeit your funds or tokens (or both).
Such troubles often happen in the cryptocurrency world. The most notable was the $55 million DAO hack. The Ethereum network underwent a hardfork (which is how Ethereum Classis emerged) as a response from the developers.
Why do we need the ERC-20 standard?
Before the advent of the ERC20 token generator standard, there were many interoperability issues between various Ethereum-based tokens. Each token had its own type of smart contracts.
Put another way, specific code had to be written in order to use the new token on exchanges and wallets. Maintaining an ever-increasing number of tokens was becoming too time-consuming and problematic.
As a result, the ERC-20 protocol—which unites all tokens—was created.
The ERC-20 token standard has six required parameters for each smart contract and three additional (but recommended!) ones. For example, additional ones include the allowed number of decimal places. In contrast, eight decimal places, a name, and a symbol (typically a three- to four-digit code) are supported by Bitcoin.
Six mandatory parameters determine the number and transfer of tokens. The first two are used to set the initial distribution:
The totalSupply function determines the total number of tokens. After reaching the maximum, the smart contract stops issuing them.
The balance0f function assigns a primary number of tokens to any address (usually the address of ICO owners).
To distribute between users and transfer from one user to another, two transfer methods are needed. They are extremely important for the secondary market:
The transfer function :transfers tokens from the primary address to individual users who purchased them during the ICO.
The transferFrom: function is used for transfer tokens from one user to another user.
Two more functions are needed to check the previous two:
The approve function checks whether the smart contract still has tokens.
The allowance function ensures that a certain address has enough tokens to send them to another address.
Wallet developers and exchanges can now create a single code base that works with any ERC-20 contract by following these six easy steps.
Using ERC-20 tokens
ERC-20 tokens have applications in many areas. For example,They can serve as pure cryptocurrency, asset ownership certificates, project shares, or loyalty points, for instance. In addition, they can perform multiple roles simultaneously.
Creation of ERC-20 tokens
All tokens are created by smart contracts. These contracts conduct transactions and account for each owner's balance. CoinCreator allows anyone to create their own ERC-20 tokens!
Each ICO participant sends cryptocurrency and data (mostly an email address) to the smart contract in order to receive tokens at a predetermined rate.
Problems with ERC-20 tokens
To Creating a ERC20 token protocol is not always sufficient for token purposes. This is only a basis for creating Ethereum tokens, which does not guarantee their usefulness, value or performance.
The token can be complemented while maintaining compatibility with the ERC-20 standard. One of the downsides of ERC-20 is that it makes token deployment trivial on a technical level. As a result, many teams that were unable to conduct an ICO on their own did so.
The huge number (47454+) results in an abundance of very similar tokens, making the selection process more difficult for potential investors.
Another issue is that some projects apply the standard's fundamental ideas in very peculiar ways, which makes it harder to understand how their tokens operate in detail. For example, sometimes tokens are sent to smart contracts in other ICOs. If the contract functionality does not provide for this, the tokens are lost. By the end of 2017, more than $3 million had been lost this way.
TOP 20 cryptocurrencies issued on the ERC-20 standard
Different user groups that favor particular cryptocurrencies or ecosystems make up the cryptocurrency community.
There are those among them who are adamant that Ethereum will soon surpass the market leaders in terms of both total capitalization and exchange rate value.
Confidence is partly supported by the fact that Ethereum has ready-made solutions for future scaling, as well as a partial move away from PoW algorithms, which makes the ecosystem more more eco-friendly than Bitcoin in terms of mining energy expenses.
The key point is Ethereum’s support for creating separate applications and new networks on its own, which makes it more promising than current alternatives. Given that Ethereum has been around for a little over 4 years, applications developed within its ecosystem become successful more often than others. The analysis showed that out of the 100 best cryptocurrencies in their entire history, 46 were implemented on Ethereum.
EOS (EOS)
Tron (TRX)
VeChain Thor (VET and THOR)
OmiseGo (OMG)
ICON (ICX)
Popular (PPT)
Binance Coin (BNB)
RChain (RHOC)
Status (SNT)
Maker (MKR)
DigixDAO (DGD and DGX)
Aeternity (AE)
Waltonchain (WTC)
August (REP)
Veritaseum (VERI)
0x (ZRX)
Revain (R)
Kucoin Shares (KCS)
Zilliqa (ZIL)
Basic Attention Token (BAT)
Let's sum it up
The emergence of the ERC20 token development standard has accelerated growth in the ICO space by unifying features that make token development easier. The protocol also increased the synergy between ICO startups, exchanges and wallet services. Most likely, in the future the ERC-20 protocol will be expanded and supplemented with functions to combat the main problems and vulnerabilities of tokens.