All you need to know about ERC-20 Tokens and the upcoming ETH Hard Forks
At HARA, we use ERC-20 as the underlying basis for our token, HART. However, lately we’ve been hearing some grumbling from the community based on an increasing perception that the technology behind ERC-20 is bad, and that it is mostly used for less savory token offerings. With the Ethereum Constantinople Hard Fork and ETCV (Ethereum Classic Vision) coin split close on the horizon, we want to make sure to clear the air and explain what it all means for HARA.
Let’s first start off by making sure we all know exactly what ERC-20 actually is. The ERC-20 token standard is a technical standard which is used to describe the basic functions that an Ethereum token contract has to include. Apart from guiding the creation of a token, the ERC-20 smart contracts also facilitate the transaction of tokens and record the balance of tokens in an account.
“HARA uses ERC-20 because it is widely supported in wallets, exchanges, and such. It’s stable, the most well-documented solution, and has a big community behind it. It’s features nearly accommodate all of our requirements.” — Arkan Gilang, Sr Blockchain Developer at HARA
By defining a simple, short list of rules that Ethereum tokens need to follow, ERC-20 allows blockchain developers to easily predict how tokens will interact with each other. The six mandatory functions that ERC-20 covers include how a token is transferred and how token data is accessed. Three optional functions allow for the customization of the token name, symbol, and to which decimal it can be divided.
The simplicity of ERC-20 has made the token standard very popular in the blockchain world. There are currently over 160.000 different ERC-20 compatible tokens found on the Ethereum main net, making up the vast majority of tokens issued on the Ethereum blockchain. This includes some big names. Some of the largest ERC-20 tokens in terms of market cap include BNB (BNB), Maker (MKR), and Zilliqa (ZIL).
Ethereum will be subject to two hard forks this month. The first will take place on January 11, with the Ethereum Classic Vision (ETCV) coin split. ETCV will become a new currency created after the Ethereum (ETH) hard fork, with all ETH holders automatically receiving 3 ETCV for every single ETH in their private wallets. What does this fork mean for HARA?
“The ETCV coin split is basically the creation of a new network, but with the same data as the current one. Since we are only using the Ethereum main-net for means of connecting to exchanges, and all HARA Data Exchange smart contracts reside within our own HARA chain, [the hard fork] will have no effect on HARA.” — Arkan Gilang, Sr Blockchain Developer at HARA
The second is hard fork is the Ethereum Constantinople Hard Fork, which is substantially more significant and will take place between the 14th and 18th of the same month. The exact time and date are not known yet because it is subject to when Ethereum reaches a block height of 7.080.000.
“The Ethereum hard fork […] is a long-waited upgrade that the Ethereum developers have been planning for quite some time. It is an effort to tackle the scalability issues which the current Ethereum has due to the slow transaction time and high fees. […] In summary, this is an upgrade that is beneficial to those who use ERC-20 protocol.” — Imron Zuhri, HARA Co-founder and CTO
The Constantinople hard fork is the second stage of the Metropolis project. The project was created by the Ethereum developers to increase Ethereum’s efficiency and performance. The update will also include Ethereum’s first step to transit from a Proof of Work protocol to a Proof of Stake protocol.
“The idea is that through improvement in the protocol, there will be more real developers with real projects that use the ERC-20 protocol. This will help to once again expand the community and those who incorporate blockchain into their business.” — Imron Zuhri, HARA Co-founder and CTO
One of the most important reasons for the hard fork in the Ethereum network is to stave off the Ethereum Difficulty Bomb that would prevent any more blocks to be mined. If the hard fork is not put in place, the mining difficulty on the network would increase to the point that block verification times come to a grinding standstill.
EIP 1234, one of the 5 Ethereum Improvement Proposals (EIP) implemented in the Constantinople update, is designed to tackle this issue by delaying the difficulty bomb by an extra 12 months. The other EIP are EIP 145, EIP 1014, EIP 1052, and EP 1283.
“We will be observing carefully how widespread the upgrades in Constantinople go. We’re particularly looking at EIP 1014 as it has rather interesting applications with our HARA Token Bridge, as EIP 1014 changes how contract addresses are assigned. With this, it’s possible to deploy a HART ERC-20 contract that has the same address across multiple networks.” — Arkan Gilang, Sr Blockchain Developer at HARA
Because we use our own HARA Chain, the Ethereum hard fork will have little impact to HART in the long run. Aside from EIP 1014, the upgrades really happen behind the scenes in that it makes Ethereum better without a noticeable difference in the development cycle.
“It seems like Ethereum is tackling the scalability problem, which would benefit the HARA Data Exchange greatly. But right now, the upgrades are only happening in the Ethereum main net. If all goes well, we’ll also adopt it into the HARA Chain.” — Arkan Gilang, Sr Blockchain Developer at HARA
Ethereum Token has seen huge price spikes over the last 2 years. Now we are on the long road of recovery and trying to settle on the optimum fair value of the token price. The Constantinople hard fork will help in working towards finding that balance.
“I hope that through the bear market, those who don’t have real projects will get eliminated, and the community becomes aware of the real technology behind it and less concerned about the money game.” — Imron Zuhri, HARA Co-founder and CTO
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Legal Disclaimer. Contributions/Investment/trading in digital assets have a relatively high risk and may not match all types of investors. The value of digital asset is very highly volatile. This could mean potential huge profits, this also could mean potential huge losses. HARA Tokens are digital assets, so if you are interested in becoming a HARA contributor, you must convince yourself of all aspects of HARA: technology, business models, and other related factors. You should be aware of the risks of failure will still exist. HARA cannot guarantee or be held responsible for any gains or losses from the performance of HARA Token which will fully be determined by market forces