What is ERC20 standard ICO | Business Biceps

In this article I want to talk about ERC20 standard basis for the vast majority of tokens to ICO world. It should be noted that the subject – technical, and if you are going to be something it is not clear at the end of the article I gave terms and their definitions. In turn, I will try to explain as simply about this standard.

ERC20 Standard

So, ERC 20 – is the standard for creating tokens * based Ethereum. It is important to understand that ERC20 tokens located on bloсkchain * Ethereum, and thus completely dependent on him and do not constitute an independent coin. Created this standard to simplify multiple actions including exchanges, wallets and smart instruments. Thanks to this standard, the new tokens will be technically very easy to enter the stock market. ERC20 standard is principles of activity of coins, ERC20 code is publicly available. Standard 6 involves the mandatory items in the smart-contract *, as follows:

1. It is necessary to specify the maximum number of tokens produced, when this limit is reached, the smart contract will automatically stop the production of new tokens.

2. Specify the option Decimals, it determines the number of digits after the decimal point for the generated token.

3. Function BalanceOF, which records the balance of the token holder.

4. Transfer and TransferFROM – Transfer tokens takes the total amount and transfers them to the user. TransferFROM used to transfer tokens between two users.

5. Approve. This feature ensures that a smart deal can give a certain number of tokens to the user.

6. Allowance. The function checks that the user has enough tokens to send them to another user.

Requires very little programming knowledge, to any user, including you and me, I managed to create tokens ERC20 standard.

ERC20 success

Working on the basis of smart contracts, which were first implemented in Ethereum network is the main secret of success ERC20 standard. It looks like this: you send tokens partner to another address, as a result you will see that you have fewer tokens and your partner more. But in fact, you did not send them to anyone, you just sent instructions to the smart contract for change of address of the owner of the number of tokens. Thus, the smart contract acts as an intermediary between you and your friend. This is a key simplifying all the operations and has led to a rapid increase altcoins, most of which corresponds ERC20 standard.

But it is worth noting that this model has a negative side. Due to the ease of creating a new token, there are various scams, which allegedly create a “promising” start-ups, but in fact simply collect cash and hidden. It is therefore very important, looking ICO, carefully study the team behind it. And, of course, the idea and the prospect of ICO.

Terms

Token – unit of account that is used to represent a digital balance in certain assets. Accounting token is conducted in a database based on blockchain technology, and access to them through a special application with a digital signature schemes.

Blockchain – built according to certain rules, continuous sequential chain of blocks containing information. More often than not, a copy of blockchains are stored on a variety of different computers independently.

Smart contract– a computer algorithm designed to enter into and maintain commercial contracts blockchain technology.

That’s all! Now you have become a bit advanced and know what standard ERC20!

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