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The popularity of cryptocurrencies has grown immensely in recent years, and with Bitcoin reaching its all-time high, it’s not surprising many altcoins aspire to penetrate this competitive industry. Many of these coins are built on the Ethereum blockchain. Thus, making them compliant with the ERC-20 tokens and standard.
The ERC-20 refers to (Ethereum Request For Comments) while the number 20 represents the unique number ID to distinguish the standard from others. ERC-tokens are digital assets designed, issued, and used just like a Bitcoin, except it runs solely on the Ethereum blockchain. These tokens mainly rely on a specific smart contract that keeps track of that token’s transactions.
On the contrary, ERC-20 is a set of rules that help developers simplify and improve the process of creating a standard Ethereum-based token.
So, when you’re exchanging USDT or DAI, the chances of you being exposed to the concept of ERC or ERC-20 tokens are inevitable. But, what is ERC-20, and how does it work?