Full explanation of what ERC20 is and how it works

 A complete explanation of what the standard ERC20 symbol is and how it works. If you are wondering about ERC20 codes and how they work, then read the article until the last line. If what you read does not convince you, give us a comment that questions you, and we will explain more to you.

Have you read articles about blockchain and Ethereum and come across terms like the standard symbol ERC20! And you find it difficult to understand the world of cryptocurrencies and blockchains, so let's explain to you our followers everything about what the standard symbol ERC20 is and how it works.

Full explanation of what ERC20 is and how it works

ERC20 standard tokens are tokens that are designed and used only on the Ethereum platform. They follow a list of standards so that it can be shared, exchanged for other tokens, or transferred to a different cryptocurrency wallet. The Ethereum community created these standards with three optional rules, and six mandatory.

Optional rules

• Token name
• code
• Decimal number (up to 18)

Mandatory rules

• The number of tokens to be released in the project's blockchain - totalSupply
• Balance tokens
• the transfer
• transfer from
• Agree
• making sure

A little complicated isn't it, let's explain more! Let's go back

What was Ethereum in the original?

Ethereum is a decentralized network of many computers with two primary functions.

• The first is the blockchain, where it can record transactions.
• The second function is a virtual virtual machine that can produce smart contracts.

Because of these two functions, Ethereum is able to support decentralized applications (DApps) . These DApps are built on the existing Ethereum blockchain, which is the core technology. In return, Ethereum gives developers a fee to exploit the computing power in their network, and financial transactions are only worth the value of the ETH coin, which is the only common currency among the platforms.

Depending on the purpose, DAPP decentralized applications can be built by creating ERC20 tokens to act as a currency or a share in the company or for points in the loyalty program or even proof of ownership, for example, a sum of gold in exchange for a share of the company's ERC20 tokens ...

Where do smart contracts fit into all of this?

Smart contracts are used to generate ERC20 tokens. It is also used to facilitate token transactions, and to record token balances in accounts. Writing smart contracts is done in "Solidity" programming language based on IFTTT logic, If-This-Then-That if this is true then do so.

Think of this as a candy bar and compare it to smart contract and ERC20 tokens:

Offer the money machine, enter a candy code or its number, and you get what you want.

Smart contracts are programmed with obligatory and optional values ​​and encrypted into the Ethereum blockchain and get an ERC20 token.

What happens after a smart contract creates an ERC20 token?

After the ERC20 token is created, it can be traded, spent, or given to someone else.

And ERC20 is the universal language used by all tokens developed on the Ethereum network. It allows trading one token for another.

Concept of IF, Tokens, Ethereum, and ERC20!

So, I will move you to explaining the mandatory rules for creating ERC20, which is the number of tokens that will be issued in the blockchain for the project - totalSupply, token balance, transfer, transfer from, approval, authorization. And I will explain all of them with a simple explanation.

• The number of tokens that will be issued in the blockchain for the project - totalSupply: or in a more correct sense determines the total number of ERC20 tokens that have been created, which is a number that cannot be leveraged after the token is issued, and it is a number that the dab (central application) needs to be the basis for payments in exchange for benefiting from the services of that The application.
• Token balance: What was transferred from the total number of tokens, i.e.  totalSupply, or the total supply to the application user account, or to a wallet supporting ERC20 tokens.
• Transfer: Allows a certain number of tokens to be transferred from the total supply to the user account.
• Approval: Responsible for verifying the transaction against the total supply of tokens. In order not to create a fake token, tamper with the credibility of the token and protect the token's value. 
• Verification: The verification function checks the balance of the user's account and will cancel the transaction if there are insufficient tokens, so as not to tamper with the number of unified tokens in all accounts. 

What are the benefits presented by the Ethereum-based ERC20 measurement?

Basically, it was a lot easier for developers and portfolio owners. So accept ERC20 codes,

Developers may use other terms in the code - for example, one token uses [totalAmount] while another uses [totalNumber]. Stock exchanges and wallets were required to build their platforms to accommodate the codes of all the tokens, which is a hard matter for developers and programmers. With a comprehensive standard, new tokens can be placed on the exchange or transferred to the wallet automatically once they are created. ERC20 also makes creating new tokens very easy, which is why Ethereum became the most popular platform for ICO in 2017.

Problems with ERC20

ERC20 codes are not perfect and have their problems, because the field is developing, and there is a lot ahead of it until it becomes what the world aspires to, there are some problems that the ERC20 standard symbol standards do not address. There are instances in which tokens may be inadvertently destroyed when they are used as a means of paying for a smart contract instead of using Ethereum. An estimated $ 3 million was lost due to this. To fix this bug, the Ethereum community is currently working on a new standard called ERC223. These standards are not compatible with ERC20, however, developers are encouraged to continue using ERC20 until compliance is achieved. In April 2018, several exchanges temporarily suspended Ethereum-based token deposits and withdrawals due to a BverOverflow bug. Which is described as a "classic integer overflow problem" and may allow the attacker to "possess an enormous amount of tokens." It has been observed that there is no conventional security approach to fix these vulnerabilities at this time.

Live examples of ERC20 codes

Every token on the Ethereum platform is an ERC20 token.

As of the time of publication of this article, the number stands at 88,724 ERC20 tokens , of which (EOS) , which is currently the fifth largest digital currency with nearly $ 12 billion in market value, has created a network that can take advantage of communications between different blockchain networks.

TRON (TRX) is ranked 10th among all digital currencies so far, and is described as "an open source protocol for the digital entertainment industry". It aims to launch a content platform with an end-to-end platform that connects all people creating different types of content.

Enterprise Blockchain Platform Vechin (VEN) , the 15th digital currency by market value, is also planning to implement Internet of Things (IoT) technology to provide private keys to each product, making it traceable.