We’ve Heard about ERC-20 Tokens, but What Exactly are They?
CyClean is an ERC-20 token created on the Ethereum platform. We’ve all seen the word “ERC-20” thrown around in the cryptosphere, but what is it that so many tokens claim their identities as ERC-20 tokens? You may have heard of EOS, Vechain, and ICON, all coins that were ERC-20 tokens before migrating to their own blockchain. Though many of you may know what they are, I thought it’d be beneficial to learn what ERC-20 means. After all our very own CyClean is a part of this family, so it is good to know about the nature of CyClean.
Yes, I know. Today we are diving a little bit into the technical aspects of Ethereum. I’ll do my best to explain this in the easiest way possible. Before I introduce ERC-20 tokens, let me first talk about the platform on which ERC-20 exists. Yep, you guessed it. It’s Ethereum. Ethereum is a decentralized blockchain network that records transactions and produces smart contracts. One thing special about Ethereum is that decentralized applications, also known as DApps, are built on the Ethereum platform. DApps may elect to create ERC-20 tokens that serve as currencies or reward points.
With that said, let’s break down the word ERC-20. ERC stands for Ethereum Request for Comments, and the number 20 is the number give to this request. The idea was proposed by Fabian Vogelsteller in 2015, and the concept defined the rules that an Ethereum token must follow. Because ERC-20 tokens are relatively easy for developers and were selected as the standard for ICOs by many cryptocurrency projects. According to Wikipedia, there were over 100,000 ERC-20 tokens in existence as of July 2018.
How do you Create ERC-20 Tokens?
Enter smart contracts. Smart contracts are deployed to create ERC-20 tokens. A smart contract was used to create the CyClean token, and as you know, smart contracts play an important role in CyClean’s mining system. But enough about smart contracts for now. Once smart contracts create ERC-20 tokens, these tokens can be sent to other addresses and serve various functions.
Certain rules characterize ERC-20 tokens.
1. Total Supply
Total supply tells us how many total tokens there are.
2. Transfer
Transfers allow tokens to be transferred from the total supply to a person’s account.
3. Balance Of
This function returns tokens that an address has in its account.
4. Transfer From
The “transfer from” function lets users transfer tokens to other users.
5. Approve
The “approve” rule prevents people from making counterfeit tokens. It does so by making sure the transaction is checked with the total supply of a token.
6. Allowance
Say someone wants to cheat the system and send more tokens than he owns. Thanks to the “allowance” rule, users cannot send more than they have. If a transaction is made, it will be cancelled.
Optional Rules
Option rules exist for the convenience of everyone. They are the name of the token, symbol, and decimals. A name is pretty much self-explanatory, as a name helps people know what token they are dealing with. The name of our ERC-20 token is CyClean. Duh. The symbol is also important for identification. CyClean’s symbol is CCL, and you can see it listed in this way on Dobitrade and HitBTC. Finally, there are decimals. This tells us by how many decimals a token can be divided. The CyClean token can be divided into 18 decimals. If the decimal value is 0, then the token would not be divisible. It would only be sent and traded in whole numbers.
Problems with ERC-20 Tokens
ERC-20 does have its faults though. There is a bug that destroys ERC-20 tokens when they are used as a means of payment for a smart contract, which requires payment in Ether. Up to date, about $3 million has been lost because of this bug.
Conclusion
Though not perfect, ERC-20 has been an integral part of the growth of blockchain. Without it, we would not have the ERC-20 CyClean token that we have today! As you saw, the CyClean token satisfies all the rules of the ERC-20 standard. CyClean has a total supply, from which tokens can be sent to users. CyClean can be sent between users, and users cannot send more than they have. Thanks in part to ERC-20, CyClean is the amazing token that it is today. We look forward to improvements to Ethereum and its protocols to see a better system with fewer bugs.
Do you now understand what ERC-20 tokens are? By writing this article, I had the opportunity to relearn what I knew about them. The technology truly is fascinating. Do you have any comments about ERC-20 or this article? If you do, feel free to talk to us. Thanks!
[ For more information about CyClean, please visit our website at cyclean.io ]
