The main agenda for Ethereum has always been to set up an ecosystem of decentralized applications where everything seamlessly functions together to form the ‘world computer’. Basically, Ethereum is looking to achieve “different things for different people”. For this to happen, Ethereum has established a reputation as the standard open source Blockchain platform for DAPs across the board.
Cue ERC-20 token standards. These were developed as a set of rules that establishes a basis for DAP developers to create their own tokens. To put it simply, ERC-20 standards enable developers and programmers of DAPs avoid re-inventing of the wheel. As a result, a variety (if not all) of the tokens on Ethereum’s eco-system are ERC-20 compliant.
What’s inside the ERC-20 token standards?
The main purpose of ERC-20 is to define the functions of tokens in the Ethereum eco-system. Since Ethereum runs on smart contracts, each token built on top of Ethereum’s Blockchain basically operates like a smart contract.
This means that ERC-20 token standards are designed to give instruction to how tokens can be transferred from one party to the other and how data concerning the token can be accessed by either party. The ERC-20 standards also describe the signals that particular smart contracts can fire and the reception of those signals by the consecutive smart contracts.
Therefore, by describing the functions and events of each token, ERC-20 token standards, therefore, provide a basis for which every token on the ecosystem can comply and function. These results in ERC-20 tokens getting support from most wallets that also support Ether (ETH). Plus, ERC-20 token standards makes the tokens on Ethereum’s ecosystem important to the success of Ethereum as a world computer as they allow each of the tokens to achieve interoperability at different levels.
In fact, Fabian Vogelsteller ( a developer of Ethereum’s Mist wallet) believes that “we are just at the beginning of tokenizing everything” and that “in the future, you will be able to buy a share of the chair you are sitting on, the paint inside your house or a fraction of the equity in a huge building complex”
Coinbase, ETC and the ERC-20 token uprising
As much as the statements form Vogelsteller might sound a little bit grandiose, it might actually soon come true and here is why. An Ethereum based decentralized application browser by the name of Toshi is now supporting Ethereum’s custom ERC-20 tokens and testnets. Toshi is operated by Coinbase which is one of the largest crypto exchange wallet and brokerage firm worldwide.
Furthermore, after Coinbase’s integration of Ethereum Classic to its platform, the company has announced plans to eventually integrate all ERC-20 tokens and ICO tokens to its platform. a statement issued by the company on June 12 said that they had “previously announced” their “ intentions to support the ERC-20 technical standards and Bitcoin forks.” They further said that they “will announce the intention to add specific assets within those categories prior to final engineering integration” so as to remain consistent with their “public process of adding new assets.”
Mass adoption of ERC-20 tokens
Already, Ethereum is on the clear with the SEC declaring that it’s not a security. In a way, this move by the SEC has enabled Coinbase the confidence to go ahead and support ERC-20 tokens. Apart from operating and adding new features to Toshi, Coinbase has also acquired Paradex which is a decentralized crypto exchange that supports ERC-20 tokens.
Given that Coinbase is a well-funded conglomerate the support it provides to ERC-20 tokens will result in a possible mass adoption of ERC-20 tokens ahead of every other cryptocurrency in the market (as was the case with Ethereum Classic and Ripple XRP). Already the Toshi team enables users to store their ERC-2- tokens or even add custom ERC-20 tokens that are unavailable to the Toshi database. Going forward, this could massively increase the usage of ERC-2- tokens in the long run.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.
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