Ethereum functions as an ecosystem that houses various blockchain applications. Think of it as an operating system that enables a customizable environment for application developers.
The sole distinction is that Ethereum fosters a high degree of autonomy, security, and immutability and makes use of blockchain technology.Blockchain applications use smart contracts to automate functionality and provide autonomy.
Having said that, these apps frequently provide tokens that are intended to grant users access to more features or benefits. These tokens sometimes let users get a cut of the app’s profits.Some are used to facilitate trading on Ethereum-based markets. Depending on the developer’s design decisions, tokens offer multiple use cases.
Another thing you need to know about tokens is that they are not held by accounts. There are tokens in contracts, which function as decentralized databases that map tokens to the appropriate Ethereum development address. Furthermore, it is the token contract that governs and specifies the rules that apply to a given token. With this, developers define the name, symbol, divisibility, and other important token identifiers.
Thus, the transfer of ownership of the tokens only occurs when the current owner sends a request to the contract directing it to allocate part of the balance to another Ethereum address. To record this transfer on the blockchain, the owner must pay a gas fee in ETH.
Now that you understand what a token is, what are ERC-20 tokens?
WHAT IS AN ERC-20 TOKEN?
Ethereum’s core developers concluded that it was not viable to promote a Wild West ecosystem where developers can create different variants of tokens. Instead, they introduced token standards that govern programming on Ethereum and offer high compatibility.
Considered the most popular token specification on the Ethereum blockchain, ERC-20 or Ethereum Request for Comments-20 was released in 2015 and has since enabled standards for creating digital assets that can seamlessly interact. To enable their infrastructure to receive, store, exchange, and send ERC20 token development, wallets and other services that are compatible with the standard use this protocol.
HOW TO RECEIVE AN ERC-20 TOKEN
Most likely, you have found an interesting Ethereum project and want to receive its native ERC-20 token. Should this sum up your current circumstances, you’re in the proper location.
The first thing you need to know is that all Ethereum addresses support ERC-20 tokens. While this is a given, it is the wallet provider’s prerogative to provide permission to access the ERC-20 token balance. In other words, some wallet providers support ETH addresses but may prevent you from seeing the ERC-20 tokens associated with the address.
This is why it is advisable to research the compatibility of wallets in advance. Make sure your wallet not only supports ERC-20 tokens, but also lists the specific token you intend to receive, especially if you plan to receive airdrops. In most cases, airdropped tokens are obscure digital assets that have not yet been listed on exchanges. If this is the case, it is unlikely that exchange wallet addresses will support these tokens.
MyEtherWallet (MEW) and MetaMask are the suggested wallets for ERC-20 tokens.Whatever the ERC-20 token, you can be sure that they can be accessed through these two wallets.
Before opening an account with either of these two ETH wallets, it is important to note that they are self-care wallets. Consequently, they will store your private keys on their devices and expect you to write down and store your seed phrase. A seed phrase is a list of 12 random words that you must enter whenever you lose access to your wallet or forget your password.
It’s simple and straightforward to create an account on MetaMask and MEW. However, for this guide, we will stick to the MetaMask option.
METAMASK: HOW TO CREATE AN ETH ADDRESS
- Visit https://metamask.io/ and find the extension compatible with your browser.
- Click and install the appropriate extension.
- Once downloaded and installed, click the extension icon and follow the instructions to create and confirm your password.
- Then accept the terms of use and greenlight the extension to reveal your seed phrase. It is best to keep several copies of these code words in safe places. You have successfully registered your account once you have backed up your seed phrase.
- To view your ETH or ERC-20 address, navigate to and select the Deposit Ether Directly tab . Then click View Account to see and copy your address. You can now paste the address into airdrop portals that request an ERC-20 address to receive free tokens.
HOW TO VIEW ERC-20 TOKENS ON METAMASK
So now that you’ve received airdropped ERC-20 tokens, how do you view them? This is also quite simple if you follow the instructions below.
- If you can’t find the token when you click the Assets tab , you may need to add the token manually.
- To broaden the search, click the Add Token tab and choose Custom Token.
- You must enter the token address in the appropriate field. Most of the time, the token symbol and decimal fields are auto-populated. Otherwise, you may need to locate the token project documentation to access the details. On Ethereum blockchain explorers such as Etherscan or Ethplorer, you can look up the token contract address. Better yet, you can ask the sender directly for the token address. Airdrops that conceal the addresses of token contracts should be avoided.
- After filling in all the fields, click Next and select Add token to confirm.
METAMASK: HOW TO VIEW AND RECEIVE NFT TOKENS
Due to the explosion of airdrops for ERC-721 standard tokens or what are commonly called non-fungible tokens (NFTs), we decided to detail some of the processes involved in receiving and viewing them in your wallet.
First, you need to access your ETH address as shown above. Collectibles are not currently visible on the web version of MetaMask, so once the transaction is confirmed, it is advised to view the NFT on the mobile app.
If the NFT is not visible in the collectibles section, click Add Collectibles and enter the collectible ID and address in the appropriate field. Once this is done, the NFT should appear in the Collectible tab .
CONCLUSION
As you may have noticed, it is very easy to set up to create ERC20 token address and receive tokens. However, one thing you should keep in mind is that transactions involving all ERC tokens require gas fees in ETH. Therefore, make sure you have enough ETH to pay the fee before executing transactions.
