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The Difference Between Coin and Token
It’s important to keep in mind that there are 2 types of cryptocurrencies: one is a coin, and the other is a token. The main difference between them is that coins have their own blockchains, while tokens use the blockchain or some other backbone that has already been built.
What Is an ERC20 Token?
ERC20 is a token (digital asset) that can represent anything —⁀for example, securities and loyalty points. ERC20, the Ethereum token standard, is a technical standard used for smart contracts on the Ethereum blockchain. When you create a token, it can be easily exchanged on the internet and backed up with a digital asset.
ERC20 Ethereum tokens are built on ERC (Ethereum Request for Comments). This is a process used in the Ethereum community to define and specify different standards. Once something is defined as a standard and qualifies as an ERC, it becomes a standard across the platform.
ERC20 tokens exist on the Ethereum platform. Ethereum itself consists of blockchains that are capable of storing transactions and a virtual machine (EVM) designed for running smart contracts.
Tokens live on the Ethereum blockchain. They benefit from its technology. Tokens are not independent and rely on Ethereum’s blockchain and platform. The native currency on Ethereum platform is Ether. Besides Ether, it can also support other tokens, which can work like currencies.
They can also represent:
- shares of a company
- loyalty points
- gold certificates
Structure of the ERC20 Token
A token can be created by a smart contract. This contract is not only responsible for creating tokens, but also for managing transactions involving the token and keeping track of each tokens-holder’s balance.
ERC stands for Ethereum Request for Comments. ERC20 defines 6 obligatory functions your smart contract should implement, plus 3 optional ones.
Optional functions include:
Mandatory ones are trickier:
- Total supply – the amount of tokens that exist at the moment
- Balance of – shows the balance for the address
- Transfer – sends a certain amount of tokens to the address
- Transfer from – used for exchanging tokens among users who have these tokens
- Approve – verifies that your the wallet address is eligible to send tokens to another user
- Allowance – shows whether or not a user has a balance sufficient to send tokens to someone else
These 6 functions are recognized and identified by other smart contracts. In a nutshell, the ERC20 token plays well with other smart contracts, and that’s why it is so popular.
This is what a basic ERC20 token looks like:
When somebody issues an ERC20 token, it is possible that it will be included and added to different cryptocurrency wallets. As a matter of fact, ERC20 tokens are widely accepted across many cryptocurrency wallets. This is why, when someone is planning to launch an ICO, they typically go for the ERC20 token as opposed to creating a different type of token.
Overview of Solidity Remix IDE
Remix provides an integrated development environment (IDE) for smart-contract development. It focuses on the development and deployment of Solidity, written smart contracts.
Remix is a good solution if you intend to:
- develop smart contracts (Remix integrates a Solidity editor.)
- debug smart-contract execution
- access the state and properties of a previously-deployed smart contract
- debug a previously-executed transaction
- analyze solidity code to reduce coding mistakes and enforce best practices
- together with Mist (or any tool that injects web3), Remix can be used to test and debug a Dapp.
The Token-Building Process
Before getting into the process of creation, we need to define several pieces of information:
- Token name
- Token symbol
- Supply of tokens (how many of them are going to be created)
- Number of decimal places
1.To build a token, we need a code (the basis of your token). You can get and copy a pre-programmed code built on the ERC20 standard here. This will make things easier and faster.
2. Go to the solidity IDE (which has its own debugger and testing environment), and paste in your code.
3.In the Settings section, define the type of compiler you are going to use. Select the newest version. The system will identify that this is an ERC20 token.
Introducing Faster Ways of Creating your ERC20 Token
The ERC20 token has become even more available nowadays. It’s possible to build one without any peculiarities of source code or Solidity programming language. These applications might come in handy if you’re unfamiliar with ERC20 basics, or are running low on time.
Build Your Own ERC20 Token in 5 Minutes
To build your own ERC20 token quickly and easily, all you need to do is go to HEXEL. Hexel lets you create your own cryptocurrency for the community. With this tool, you can create tokens for fun, and start using them right away without technical difficulties or any other crowdsale requirements. Once you’ve logged in, click Create a Token.
- Enter a name for your token. Let’s call it RoboToken.
- Enter the symbol RT.
- Now we can go through the process.
The first step is to sign a transaction to submit your token to a network. Whenever you complete a transaction on Ethereum, you have to pay a little bit of gas. This can be described as a fee that you pay to the computers on the network to process your transaction. For this step, use the MetaMask extension. You’ll need to have some Ether in your account to actually deploy and start using it. Another important thing to keep in mind: the more gas you pay, the faster the network will process your transaction.
The second step is to wait for confirmation. The more gas you pay, the faster the deployment of the transaction will happen.
Once the transaction has been deployed, click Go to my page.
Once you are at your homepage, you can start minting tokens. Click Mint Tokens.
In the window, fill in all the fields. Choose the number of tokens you want to send and which addresses should receive these tokens. Then click Submit, and you’ll approve the transaction. Notice that the gas fee is much lower now. This is because we were deploying a whole new token to the network, but now we are just minting and sending tokens.
Refresh the page, and you’ll notice that the token supply has changed. In addition, you can see who the token holders are, and the addresses that hold your token. This feature is convenient, because everyone can keep track of ownership.
Create Tokens via Trust Wallet Application
This application has a user-friendly interface and is very convenient for creating a token. If you’re not familiar with the Solidity language and the source code or simply don’t have enough time to work with it, you can use this app.
The first thing you need to do is go to the Trust Wallet website and download the app from the App store or get it on Google Play.
Once you have installed it, go to your Wallet App, and you’ll see a dApps browser tab. This browser interacts with different applications. One of them will be Token Factory. Click on it.
Then click on Create Token Contract and specify the information for what you want to create. For example, we want to create a thousand tokens, the name is going to be ViK coin, the number of decimals will be 0, and the symbol will be ViK.
Also, in the Settings section, make sure you’ve selected the network you want to use. In our case, we’re going to use Ropsten ETH.
After clicking Create Token, you will see that you need to spend some money (gas) to deploy this contract to the network. Once you approve this transaction, it goes to the blockchain in order to create a smart contract. Notice that you will have to wait some time before the token will be deployed (it depends on the amount of gas you paid.)
Done! You can copy the address of your ERC20 token, and then, if you go to the Tokens section and click Add Custom Token, you can specify the information by clicking Done.
After that, your tokens will be added to the wallet! Use them as you wish.