What is a ERC20 token and how it works?

What is ERC20? 

ERC (Ethereum Request for Comments) is an official protocol for making suggestions for improving the Ethereum network; 20 - is the unique identification number of the offer. Technical specifications for tokens produced on the Ethereum block system were published in 2015. Despite the fact that the ERC-20 tokens are functioning within the framework installed by the Ethereum command, this framework can also provide developers with greater flexibility in the process of the creation of them.

The ERC20 standard defines a set of rules that must be met in order for a token to be accepted and able to interact with other tokens on the network. The tokens themselves are block-assets, which can have value and can be sent and received like any other cryptocurrency.

What was the reason for creating the ERC20 standard?

Before the appearance of the ERC20 standard, there were many compatibility problems between different forms of Ethereum-token, when each of them had a completely unique smart contract. In order to support a token for a stock exchange or wallet, developers each time were needed to write completely new code. That's why supporting a growing number of tokens became increasingly problematic, taking too much time. A standard protocol for all tokens was created to solve this problem.

How do ERC20 tokens differ from traditional cryptocurrency?

The difference of ERC20 tokens from other known crypto-currencies like Bitcoin or Litecoin, is that they are bound to the Ethereum network, use the format of addresses received within this network and are sent using Ethereum-transactions. Accordingly, transactions involving ERC20 tokens can be traced in the block explorer.

What are the Network fees for ERC20 ETH tokens?

When you perform any kind of transaction on Ethereum blockchain, you need to pay for the computation. That price is calculated with GAS and GAS itself is paid with ETH only. In other words, this is a network fee paid to miners to processed your transaction on the Ethereum blockchain. This fee is paid regardless if the transaction was successful or not. Either way, the transaction uses computation power – to be executed or to be completed. GAS, GAS limit and GAS price.

Gas is internal pricing to run a transaction or contract within Ethereum blockchain.

This is the price for computing powers used in order to include your transaction in the block. This is not the matter of information size, so it doesn't matter how much tokens you are sending: 1, 10, 100 or 1000. It's all about the nodes connected to the network.

GAS limit - it’s the maximum amount of units of gas you are willing to spend on a transaction. 21000 is the standard gas limit for regular transactions.

GAS price - is the amount you pay per unit of gas. The price you pay for each unit increases or decreases how quickly your transaction will be mined.

Why are the Network fees paid in ETH?

Since Ethereum-based assets run on Ethereum’s blockchain and not on their own, transaction fees are paid in gas and not in the assets themselves e.g. Aragon (ANT), Golem (GNT), etc

Why all ERC20 ETH tokens and ETH have the same address?

For the same reason as for all ETH tokens, the network fee is paid in ETH. All ERC20 ETH tokens are operating on ETH blockchain and don’t have their own unique addresses.

What ERC20 tokens does Atomic Wallet support?

Atomic Wallet supports all the ERC20 ETH tokens. Some of them are listed by default. Others are only visible in the coin list if you have them on your address. This is the list of the tokens supported by default:

AWC, GUSD, TUSD, PAX, USDC, USDS, NPXS, BAT, DNT, ZIL*, ZRX, SALT, DGD, TRST, EDG, WINGS, RLC, GNO,GUP, LUN, REP, ANT, BNT, CVC, PAY, OMG, MCO, ADX, SWT, PTOY, STORJ, FUN, HMQ, NMR, GNT, MLN, VIB, RCN, POWR, PPT, STX, WAX, BRD, DCN, SNM, BNB*, AE, ARN, POLY, NEXO, ENJ, SKIN, KNC, DENT, BKX, DAI, LINK, MKR, R, MANA, KIN*, HOT, DGTX, SENT, ELF.


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