The ERC-20 is a set of common rules in a smart contract that all tokens must adhere to. This creates compatibility between all the tokens and eliminates issues such as using different terminology when creating tokens. It can be seen as a universal language for the different tokens to be able to communicate and the widespread use of ERC-20 standard on the Ethereum blockchain has so far been used to issue tokens affiliated with projects ranging from decentralized computing and prediction markets to representing physical objects or revenue sharing.
The ERC-20 standard
The name of the token.
The ticker of the token.
The division of the token (up to 18 decimals).
This function is used to identify the total amount of ERC-20 tokens created.
This function retrieves the amount of tokens in a user account.
This function allows for a specified number of tokens to be transferred from the total supply to a user.
This function allows for a user to transfer tokens to another user.
This function checks a transaction against the total supply of tokens to negate counterfeiting.
This function checks the balance of a user account and will enforce a cancellation if there are insufficient tokens.
While the ERC-20 standard is currently broadly regarded as the standard in the cryptosphere, development has already begun on the ERC-223 token, which will address many of the limitations that the ERC-20 token suffers from currently and which have emerged since it was created.
The creation of the ERC-721 token also shows the diversity and the possibilities of the ERC standards, depending on programming and the rules they must adhere to. The ERC-721 standard is best known for being used for the CryptoKitties game where it allows for customization of each tokens. Contrary to the ERC-20 standard, the ERC-721 standard states that tokens cannot be fungible (identical to one another, as with currency).