Is ERC-223 here to stay?

ERC is a very familiar topic in ICO and Ethereum community. The acronym ERC stands for Ethereum Request for Comments. In practical ICO domain, ERC is developed by the developers of the Ethereum community which took the shape of a memorandum. It details the different range of methods, research, innovations and behavior which are all applicable to the operations associated with the working of the Ethereum ecosystem. The said piece of technology is then forwarded for peer review or just sharing some novice concepts of information. Different events take place and once the core developers and the entire Ethereum community endorses the new concept with consensus, then proposals of such nature becomes standards.

Let us build up our discussion first by talking about the predecessor version of ERC-223, which is the ERC20 protocol. Both are good in their own space having the ultimate goal of making the blockchain to win. However, a deep analysis of both exposes the strengths and weaknesses and it is believed that it is too early to say here that ERC-223 is the present, will be the future and it is definitely here to stay.

Not to forget that the ERC20 took the entire blockchain community by storm when it was first introduced into that ecosystem in 2015 and eventually paved way for the ICY cryptocurrency which the entire blockchain community has already witnessed globally by mid-year, 2017. The protocol actually details a very specific set of rules which is bound for the token (Ethereum based) to deploy and making the entire process of programming of the tokens quite simplified over the Ethereum blockchain. As a matter of fact, such tokens are a very unique kind of the smart contracts which are ideally designed for employing the Ethereum based blockchain. The ERC20 tokens have multiple types where the most prominent ones are the Bancor, Bankex, Tronix, VeChain, EOS and BNB etc.

One great aspect of the ERC20 protocol could be well seen in case of the Ethereum tokens where, before the introduction of the said protocol, the developer was required to develop a unique kind of an implementation for creating a token and eventually deploying it over the Ethereum based network. However, the introduction of ERC20 protocol lead to a completely simplified process for the tokens generation, which is all thanks to the streamlined smart contract model. Furthermore, the protocol also removed the complexity linked with the smart contracts tokens implementation and that helped with considerable reduction in any chance of violating the contracts.

All was going well with the ERC20 protocol before it was hit by a critical bug. As we all know that ERC20 is actually the first standard introduced for the Ethereum model. As we have seen usually with such new codes that there are some hidden and obvious bugs to deal with. The said protocol has two distinct approaches for the sake of performing a token transaction. First, the transfer operation of the protocol allows the user to deploy tokens to a particular address. Combination of transfer and approve function is required if the need is to add the tokens into a particular smart contract. The need here is to fully authorize the smart contract for the sake of making any withdrawal. After that, the user is required to use the contract function for the purpose of handling the deposit and eventually withdrawing the tokens by employing the transfer function.

In the above scenario, what if the deposit of the tokens happens accidentally by the user using the said transfer function. Even if it is accidental, the operation will successfully complete but still, the recipient contract would not recognize the transaction. For example, just consider a situation where the user transfer tokens to some exchange (decentralized) then the intended exchange would accept the receipt of the tokens but those tokens would never get credited to the balance. On top of that, there is no implementation of any token extraction on emergency basis and that makes the token reversal impossible under any circumstances, thus resulting in permanent balance loss. This critical bug resulted in the loss of multi million dollars.

Then came the ERC-223 protocol which is also entrusted by our CyBitTM platform for its outstanding performance, enhanced security and multiple other reasons. The ERC-223 protocol is good with its consistency to manage the transactions of incoming tokens through the smart contracts and this empowers the coders to develop some highly productive protocols for an Ethereum based blockchain network. The new protocol comes with enhanced security and straightaway it resolved the issue of accidentally sending tokens which were not recoverable by any means The coders work on to manage the incoming transactions and secures users by not letting them transfer tokens to an incompatible contract. So, losing tokens to this issue is now the thing of the past.

If we look at the operating mechanism of the ERC20 protocol, then it employs a pull mechanism for reclaiming tokens, especially when associated with the smart contracts. This kind of a scenario in other words means that the user is required to pay twice the gas fees. The first fee is for approval of the transaction and the other one is for depositing the tokens. On the other hand, the ERC-223 protocol is smart enough to avoid this complicated puzzle and enables users to pay the transaction fees just once. This is making CyBitTM a highly secure, economical and a reliable platform among both the novice and experienced investors. Another great benefit is that the tokens associated with ERC-223 are backward compatible with the ERC20 protocol and the users could enjoy the best of the ERC-223 protocol without facing any compatibility issues.

Final Verdict:

ERC-223 is not a completely different version from the prior ERC20, but it is just better and addresses some critical concerns and bugs associated with the former version. From a coder’s perspective, the ERC-223 protocol is far easy to program as compared to the ERC20 protocol and on the flip side, the consumers too are enjoying using this latest protocol due to a number of benefits which the prior version was completely reluctant to offer. These benefits include first of all the ability to avoid any accidental flow of tokens in the network which are irreversible and leads to permanent loss of the funds. Then, we have the other benefit of lower or one time transaction fees as compared to twice the gas fees of the earlier protocol which was not feasible for many novice investors to afford. Finally, the backward compatibility gives great freedom to the investors who by no means have tokens associated with the ERC20 protocol. By all this discussion carried above, we can very safely conclude here that the ERC-223 protocol is a revolutionary enhancement to the prior version and this is definitely something to stay and serve Ethereum based blockchain investors for a long time in the future. For this very reason, the ERC-223 protocol became an integral part of the CyBitTM platform as well and is serving and attracting more and more clients to the network.

Naquib Hatami

Founder

Blockchain Fintech Product

CyBitTM Limited | Cybit.io

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