Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
What is an ERC20 token?
Read our beginner’s guide to Ethereum’s ERC20 token standard.
A token is a type of cryptocurrency which can be created by anyone, without the need for much technical know-how or skill. This is one of the reasons there are so many cryptocurrencies on the market – tokens have enabled almost any brand, company or idea to make their own in a matter of minutes. ERC20 is a technical standard for tokens issued on the Ethereum blockchain. ERC20 tokens aren’t too complicated – let us explain them to you.
What are ERC20 tokens?
Since its launch in 2015, Ethereum has become one of the driving forces behind the growth of cryptocurrency. Initial coin offerings (ICOs) have raised billions of dollars in funding for crypto projects from all around the world, and most of these ICOs are based on the Ethereum platform. Buyers contribute Ether (ETH) or bitcoin (BTC) to participate in a crowdfunding sale, and in return receive some of the ICO project’s native tokens.
ERC20 is a technical standard for tokens issued on the Ethereum blockchain, providing a list of rules that all Ethereum-based tokens must follow. These include how the tokens can be transferred, how transactions are approved, how users can access data about a token and the total supply of tokens. The protocol is necessary to ensure compatibility between the many different tokens issued on Ethereum.
Just like Bitcoin, Litecoin and any other cryptocurrency, ERC20 tokens are blockchain-based assets that have value and can be sent and received. The difference is that instead of running on their own blockchain, these tokens are issued on the Ethereum network. This means they’re hosted by Ethereum addresses and are sent using Ethereum transactions.
Did you know?
Want to know why they’re called ERC20 tokens? The “ERC” stands for “Ethereum Request for Comments”, which is an official protocol used to propose improvements to the Ethereum network. The “20” is the unique ID number used to identify the proposal.
Popular ERC20 tokens list
Many crypto newcomers are surprised to discover just how prevalent ERC20 tokens are. Take a look at a list of the top 100 digital currencies by market cap, and you’ll see plenty of well-known currencies that use the ERC20 standard.
Which wallets support ERC20 tokens?
If you’re buying any digital currency that’s issued as an ERC20 token, you’ll need to find a wallet that’s compatible with these types of tokens. Happily, because ERC20 tokens are so popular, there are plenty of wallets to choose from, including the following:
To find out ways to securely store your ERC20 tokens, you can begin by comparing the above wallets. You can also learn more about storing your cryptocurrency in our ultimate guide to wallets.
Disclosure: At the the time of writing, the author holds ADA, IOTA and XLM.
More guides on Finder
Your complete guide to cryptocurrency statistics
The one, two, threes that anyone looking into cryptocurrency needs to know before you start buying.
How to make NFTs
Find out all you need to create your own NFTs – the new application of blockchain technology that enables digital ownership of assets.
Review: Celsius Network cryptocurrency lending and borrowing platform
An in-depth review of one of the most popular lending and interest earning platforms in cryptocurrency.
AscendEX (BitMax) Cryptocurrency Exchange Review
A complete review of the AscendEX exchange, covering trading and DeFi features, associated fees, regulation and security. Is AscendEX right for you?
Axie Infinity guide: How to play and earn
Axie Infinity is an RPG game that is currently dominating the NFT sector. Discover what Axies are, what makes them unique and how you can earn money simply by playing.
What is Compound Finance?
We explore how to use Compound Finance for lending and borrowing.
How to invest in cryptocurrency
Learn how to get started investing in cryptocurrency, the methods available to you, and what to keep in mind before making your first purchase.
Finder cryptocurrency predictions report: October 2020
We asked 30 panellists for their cryptocurrency price predictions, the outlook for DeFi and how long they think high returns on yield farming might last.
Metamask wallet review and guide
All you need to know about Metamask – the browser extension digital wallet and a user-friendly bridge to the world of Ethereum decentralised applications.
Guarda Wallet – 2022 review
Learn more about the Guarda cryptocurrency wallet and find out how it works.
Ask an Expert