If you've studied Ethereum and how it works, learned about what an ICO is, or delved into cryptocurrency descriptions on Coinmarketcap, you've probably read the description of some tokens, called ERC-XX tokens. But what is ERC? And what do the following numbers mean? Are there different types of tokens on Ethereum?
What Does ERC Stand For?
First of all, What is a Token?
In the Ethereum ecosystem, it is neither more nor less than a smart contract that meets specifications. In general, the work done on Ethereum is doomed to be shared, reused and developed in a spirit of collaboration with the whole community. In order for there to be collaboration, it is better to agree from the start what a particular tool will look like, especially in programming. But it is not only a reusable tool for everyone to appropriate the content and use it in their projects.
The ERC which precedes the identifier of the token in question means "Request for Comments". These are numbered documents that describe the operating methods of internet protocols or computer hardware. These are not necessarily standards used all over the world, but all are documented and published by the Internet Engineering Task Force.
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The Main Types of Ethereum Tokens:
Clearly the most used token in the Ethereum ecosystem, especially in ICOs.
The ERC-20 token makes it possible to create a cryptocurrency, to integrate it on exchanges and to offer an ICO against Ether in a very simple way.
Once these functions are in place, an ERC-20 type token can interact with most Ethereum smart-contracts.
Do you remember Crypto Kitties? The cats that the crypto communities were snapping up against ethers were actually ERC-721 tokens!
This can be confusing, as each Kitties was unique, far from the idea of many identical tokens. This is precisely the particularity of ERC-721 type tokens, it is to allow the creation of non-fungible tokens. This type of token allows the creation of games, such as Crypto Kitties or Zombie Battleground, CryptoCup but also the tokenization of works of art or fields, buildings.
You can find more information on the ERC-721 token on the latter's website. (http://erc721.org)
Other Types of Ethereum tokens
This token is an evolution of the ERC-20 token. Indeed, despite the popularity of the latter, it has many flaws, both security and clumsiness, for example the loss of tokens if they are sent on a contract that was not intended to receive them. Also, it is optimized to use less gas during transactions.
Despite all its advantages, it is not yet a standard and remains at the stage of proposal. Indeed no large-scale project uses it, and modifications should be made so that exchanges can accommodate it.
The ERC-827 token is defined as an extension of the ERC-20 token. First, it is in its programming a "child" of the ERC-20 token, ie it will recover the characteristics of the latter before adding its own functions.
It brings new features to three functions, approve, transfer, transfer From, in order to transfer not only token exchanges but also data of all types, for example photos or videos, documents.
This token is based on the concept of subscription, one can subscribe to Netflix or your favorite streamer, one can subscribe to decentralized services using this type of tokens. But there are still unanswered questions for the moment, especially on the volatility of tokens, but also the price of gas transactions, over long subscription periods, the user could end up with a completely different bill.
We have toured the different types of the most common Ethereum tokens, but there are many more, in the form of concepts or prototypes, in the future other types of tokens will become standards, you can find the proposals on this ethereum site.
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