The Ethereum Standards
A lot of people have heard about Ethereum and how it plans on effectively transforming the internet as we know it today, but a lot of people don’t understand this whole idea about “tokens”. If you do, you are probably aware of one named the ERC-20 token. The ERC-20 token is however not alone. In fact, there are many more new tokens being constructed as we speak.
To start, what does ERC stand for? ERC stands for Ethereum Request for Comment. The following digits correspond to the issue number that is related to Github. The most common tokens issued are ERC-20, however; there are several issues associated with them which drives the construction of different tokens. There are many different iterations of the ERC-20 token, but the ones we will talk about here are the ERC-20, ERC-223 and the ERC-777.
ERC-20
There are several functions of the ERC-20 token. First is the Total Supply function which gathers the total supply. Next is a retrieval function associated with the owner address to determine the token balance. Then you need a function that allows you to send tokens to a particular address and vice versa. This function then is extended to enable a specific account to withdraw tokens from one’s account continuously with parameters of an upper limit of number of tokens that can be withdrawn. Lastly, the returning of tokens predefined by the upper limit is allowed to be spent by the spender to withdraw from the account owner. These are simple, yet critical functions that allow the ERC-20 tokens to function in real life scenarios.
One major issue with the ERC-20 standard is how cut-throat it is to make sure that you are getting all of your transfer information correct. If you do not, then you can potentially lose all your tokens without any chance to retrieve them.
Basically, as we go through the next tokens, you will see that they are simply trying to fix the bugs associated with the ERC-20 standard.
ERC-223
The ERC-223 token is trying to solve the issue of losing tokens in miss-constructed smart contracts. They accomplish this by considering each transaction as an event. The obvious benefits to this standard are that you will no longer have to worry about losing funds.
ERC-777
The ERC-777 token’s main objective is to increase adoption by creating a variety of transaction handling options. The major upgrade with this standard is the implementation of a central registry that will be able to reveal which address supports what function type. A bonus with ERC-777 is that its functions can be implemented alongside ERC-20, so network effects will be in full force for greater adoption. For better or for worse, ERC-777 also allows a secondary party to manage your tokens on your behalf — there are obvious pros and cons to this.
There are many other tokens that are being created and tested, but the ERC-20, ERC-223 and ERC-777 are the most commonly debated and used. The ERC-20 token is easy to use and allows new ICOs to raise capital in an easy way. The bugs associated with it are just too big for it to last in the long run. The ERC-223 token solves the lost token issue, but does it go far enough to add any other value? The ERC-777 seems to solve most of the issues and includes additional functionality.
So where are we today?
Right now, the talk of the town is the ERC-777 standard. There are a couple of issues with the overall adoption which is mainly due to the Ethereum network. Ethereum needs to solve its scalability issue. Ethereum needs to increase its scalability in order to allow large token operations to be completed simultaneously. This has been one of the biggest issues not just with Ethereum, but with most cryptocurrencies out there. Until this is solved, progress on the Ethereum network will be stagnant. Ethereum developers have several upgrades approaching addition to the platform down the pipeline (CASPER, sharding, etc) , but the need to fix this problem is immediate. If Ethereum cannot fix their scalability problem, another coin will.
