How ERC 20 token is more secure and easy to adopt?

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November 20, 2020

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ERC-20 protocol was proposed on November 19, 2015, by Fabian Vogelsteller and these tokens are designed and used solely on the Ethereum platform which is a machine with a decentralized network functioning over two basic features: A blockchain that can record transactions and a virtual machine that can create intelligent agreements. ERC20 features allow an external user, such as a crypto-wallet app, to discover the balance of a user and transfer funds with proper authorization from one user to another.

ERC stands for Ethereum Request for Comment, and 20 is the number assigned to this request. The universal language that all tokens on the Ethereum network use are ERC-20. It facilitates the trading of one token with another. To build ERC-20 tokens, smart contracts are used. It can be sold, invested, or given to someone else after a token has been produced.

Building a better blockchain ecosystem is an integral part of not only the interest of people in cryptocurrencies as properties but also of creating use cases for cryptocurrencies as peer-to-peer payments that traditional technologies may not solve real-world problems. We have seen a lot of improvements in the Ethereum blockchain’s capabilities since its inception. Throughout the large, rising ecosystem, both Ethereum and ERC20 token projects drive these developments. Most Ethereum contracts out there today are compliant with ERC20 and the ability to program smart contracts is included.

According to Wikipedia, ERC20 is a “list of rules that an Ethereum token has to implement, giving developers the ability to program how new tokens will function within the Ethereum ecosystem. The ERC-20 token standard became popular with crowdfunding companies working on initial coin offering (ICO) cases due to the simplicity of deployment, together with its potential for interoperability with other Ethereum token standards.”

Such tokens provide a viable solution that not only enhances scalability but also growth which implies that potential Dapps will be much more customizable and scalable while retaining the Ethereum blockchain's same level of protection.

ERC-20 Protocol Optional Functions are as below:
• Token Name
• Symbol
• Decimal (up to 18) which means that the token can be divisible up to 18 decimal places. If the developer does not want the tokens to be divisible, it is possible to set the decimal to 0.

There are some Mandatory functions performed too as below:
• Total Supply
• Balance Of
• Transfer
• Transfer From
• Approve
• Allowance

ERC-20 makes it all easy.

The development of new tokens is also extremely simple with ERC-20, and that is why Ethereum became the most successful ICO platform back in 2017. ERC20 tokens are quick and fast to deploy, and ERC20 tokens are deployed as smart contracts, much like other Ethereum tokens, and executed in a decentralized manner on the Ethereum Virtual Machine (EVM).

All of the main factors that affect user adoption of ERC20 tokens are stability, interoperability, and scalability. The protocol of the ERC-20 Token is simply a set of basic rules and procedures to be followed in order to be shared, traded for other tokens, or transferred to a crypto-wallet. For cryptocurrency exchanges and wallets, this makes it simple because they do not need to build the help of thousands of new tokens with various rules and programs, but just one ERC20 Token.

ERC-20 lays down universal standards that can be followed as new tokens are developed. These days, ERC-20 compliant tokens are conveniently listed as well as readily transferable on cryptocurrencyexchanges.

Although ERC-20 is not perfect, and in order to accelerate the potential acceptance of ETH and ERC20 tokens, the Ethereum blockchain requires substantial scalability improvements, yet the ERC20 laws include a proper model for developers to obey. Instead of starting from scratch, it is easy for them to come up with tokens.

A significant factor that is crucial for the overall valuation of the Ethereum network is the liquidity of these ERC20 tokens. If the projects on top of Ethereum are active and communicate with each other, so more projects and more users can invariably be brought into the network of Ethereum.