Ethereum’s ERC20 standard allowed thousands of companies to create their own tokens that have lead to an explosion in the ways blockchain technology can be used. We explain how that’s lead to dozens of other currencies.
What ERC20 did for blockchain
Ethereum’s developers noticed that inside their eco-system dozens of people were creating their own tokens. But there was a problem: it was becoming increasingly complicated for those tokens to interact with each other.
Ethereum decided to create a standard, a set of rules every token on the network had to abide by and ERC20 was born.
Find out more about ERC20 in our article on Ether, Gas and ERC20.
That has lead to some tokens becoming so valuable they are now among the biggest 20 cryptocurrencies being traded currently.
Examples of different types of token on Ethereum
- 👽 Golem – Is aiming to be the Airbnb for computing. It wants to allow idle PCs to be rented in exchange for GNT, Golem’s own token. In its ICO it raised more than $300 million.
- 🛍️ OmiseGo – The Thai based company has created a decentralized payment platform for retailers, like Stripe, but built on Ethereum’s blockchain. They raised more than $25 million for their ICO.
- 📊 Augur – Augur wants to allow anyone to speculate on derivatives, but combines that with a mechanic that rewards the ‘wisdom of the crowd’.
How do I buy and store ERC20 Tokens?
You’ll need an Ethereum Wallet. MyEtherWallet allows you to see all the tokens inside Ethereum’s ERC20 universe, like all of the above.
Ethereum’s developers have noticed a few bugs in how ERC20 tokens operate. As a result, several members of the community have proposed an upgrade, called ERC223.
Some developers have proposed other upgrades, using different names. Whatever upgrades do come, Ethereum’s ability to let others create their own currencies inside the network is set to continue.