What is the Implementation of the ERC20 Token Standard?
Ethereum tokens are identified as digital assets based on the Ethereum blockchain. There is a vivid simplicity to Ethereum tokens in the already-developed Ethereum blockchain, so there is no need to elaborate a new one. The developer has an existing infrastructure at his or her disposal.
The great demand for Ethers makes the Ethereum ecosystem stronger and more sustainable than others. The Ethereum platform enables developers to create smart contracts for Ethereum tokens for different projects. Ethereum tokens are valuable blockchain resources that the user can send as well as receive in his or her wallet like any cryptocurrency. The usability of Ethereum tokens is really vast and unlimited right now. An investor can use tokens for any purpose: to pay for advertising, to buy video games, or to make a contribution toward scientific development or world peace. The variety of such projects is immense, so you are able to choose the alternative that will make your life easier.
The ERC20 token standard is implemented in smart contracts alongside all its functions and events. The most widespread way to release tokens is through initial coin offerings (ICOs) or crowdfunding events initiated on the principles of this standard. ERC stands for Ethereum Request for Comments, which means a formal code created as a protocol for development in the Ethereum environment.
The ERC20 standard makes the process of Ethereum token compatibility with newly-created services straightforward. Furthermore, constant development and upgrading of this standard allow the token system to become increasingly stable and protected.
Let’s review the list of the ERC20 token standard functions and the events that should be implemented in a smart contract.
The ERC20 specifies a set of standard rules for creating Ethereum-based tokens, and for their functioning throughout the Ethereum blockchain: for instance, to create transactions, to transfer tokens, and to set the total supply, not excluding the fees.
In this case, if you want to anticipate more about smart contracts and transactions, read Applicature’s informative article that will help you to understand how smart contracts blockchain works.
To be short, if you make a transaction sending Ethers or any other cryptocurrency, you pay fees (gas) in Ethers. If the amount of gas is too low, the transaction will fail, and you will see an error on your screen.
Each Ethereum wallet address can be used for Ethereum Token storage. When making a transaction or participating in an ICO, by all means, make sure that your wallet is an ERC20-compatible token wallet. After getting your tokens, you can check them on Etherscan in the field “View Tokens”.
Why Do You Need to Create an Ethereum Wallet Address to Store Tokens?
One of the best means of contributing in cryptocurrency is to invest your money in ICOs (Initial Coin Offerings) and buy some Ethereum tokens. Most ICO tokens are based on the Ethereum blockchain. So, if a holder wants to become a participant of an ICO, he has to create an Ethereum ERC20-suitable wallet in which only he is in charge of his own private keys. If you consider investing your fiat money in an ICO project, investigate the different ways with Applicature how different ICOs accept fiat money.
An Ethereum wallet has secret keys or other alternative methods of unique identification. In case of lost passwords, they cannot be recovered.
When creating your new wallet, you receive your unique public key or public address. To point out your security, you need your private keys or keystore files to buy tokens and transfer them in the future. Key files guarantee the security of your funds and prevent the hacking of your crypto-investments. As Ethereum is an upcoming platform, penetrating every level of society step-by-step, it is constantly developing and improving. In addition, its transferring system is virtually superior. That’s why no one needs worry about the security of their wallet.
Hot and Cold Forms of Wallets for ERC20 Tokens
Currently, there are two forms of the wallets: hot and cold. What is the real difference between them? It’s quite simple. Nowadays, investors own enormous sums of cryptocurrencies or different kinds of tokens in their wallets. In order to protect them, users store only some of the tokens that they will need for purchasing processes. Others are kept “offline,” or in cold wallets.
The difference is the following, as you might have guessed:
In contrast to hot wallets, it is impossible for hackers to steal your digital assets from your cold wallet without an internet connection. It is necessary to distribute your tokens wisely between two storages, concentrating the larger amount in a cold wallet.
If a holder wants to keep his money in safety while buying any cryptocurrencies or tokens from the market, he must always transfer stocks into a cold wallet!
Why do users choose cold wallets?
- First, there are fewer vulnerabilities to hack attacks
- Second, while confirming the transaction, you have to click on the button in your hardware wallet.
The Variety of ERC-20 Compatible Token Wallets
The Ethereum blockchain is the basis for token creation of the ERC20 standard. When you come across any token, you can investigate with the help of a smart contract:
- every transaction with that token
- the current rate of the token
- token holders (how many people actually hold it)
The diversity of these tokens and Litecoin/Bitcoin is that ERC20 tokens are presented by Ethereum addresses and transmitted by Ethereum transactions.
It is essential to know, when transferring Ethereum or ERC20 assets to a smart contract, that it is better to increase fees for this transaction. This enhances the interest of miners and executes the ‘contract’ plan accurately.
According to Github, the normal GWEI price is 20 GWEI. However, if you want to make sure the transaction will not fail, you may increase the fee price. Using MyEtherWallet, you can see the GWEI price in the top-right corner, and read the information given in the drop-down menu. Move the slide from left to right, and choose the appropriate price that suits you.
Let’s investigate the most widespread kinds of ERC20-compatible wallets, and show their pros and cons for the average crypto-investor.
This is the most widespread wallet currently available that supports ERC20 tokens, including token contracts. Furthermore, tokens can be transferred to/from Mist to MyEtherWallet, or any other wallets, easily and safely.
One has to be very careful when sending tokens. Every single time, each holder has to check the data for transactions multiple times (he can transfer tokens to the wrong account/address) in order to prevent their loss.
MIST uses a multi-signature, full-node platform, and a user should not provide any personal information. In order to set up a Mist Wallet, follow these 4 simple steps:
- Go to the link https://github.com/ethereum/mist/releases and download the Ethereum Mist Wallet.
- Install it, and run the app.
- Create or open an account.
- Select the test or main network and get it started.
The image above demonstrates all wallets available for the user. The user may easily access his wallet with his private key or keystore file and password. There are constantly-updated versions of MIST available for Linux, Mac OS X, and Windows.
MyEtherWallet is a web version of the Ethereum wallet, so no download is needed. You are able to create a new wallet or open an existing one; but before this, choose the network from the dropdown list: test nets(Rinkeby, Kovan or Ropsten) or the main network.
To demonstrate, the benefits of using the web version:
- free and accessible to everybody
- direct interaction with the blockchain
- total control of keys & stake
- self-responsibility for your own safety
- offline storage
- no personal information required
- Chrome extension
(Firefox and Chrome)
MetaMask is an extension for Chrome that enables a user to access his Ether wallet address. When downloading, the user chooses between the following options: an available installation of MetaMask is located in Chrome, Firefox, Opera, and the brand-new Brave browser.
You may open or create a new wallet, and before sending a transaction, the user may check all data before approving or refusing the transaction.
- operates Ethereum Dapps right in the browser
- features a customer interface
- confirms blockchain transactions
MetaMask + MyEtherWallet include 3 basic advantages
- MetaMask is resistant to hacks because a key stays in MetaMask and the fraudulent website will not swipe it.
- It’s the fastest and the most accessible method to undo your wallet on MyEtherWallet.com, without charge.
- MetaMask will notify you with a warning button in case you visit one of the blacklisted sites.
Transmitting stocks: you possess unique account, equity, and transaction history.
If you want to forward a high number of tokens or ETH, send a small amount first to test it. Alternatively, you may take a hardware wallet or MyEtherWallet offline. This will ensure that everything is secure.
Parity is an Ethereum environment for interacting with smart contracts and Dapps. Developers can build protocol extensions, and develop smart contracts using Parity.
The creators of Parity split its functions into 3 groups:
- management of the account, agenda book, and multi-currency
- formation, import/export of key
- Web3 dApp browser
- support of hardware and computerized cold wallet
- support of nickname registry
- dApp browser and enrollment
- ERC-20 token equity and enrollment
- density development climate
- clear, modular codebase
- rapid processing of transactions
- full privacy and control
- different solutions of distributions
- components boost
- high performance
- future proof
- accessible to use
imToken is accessible for both IOS and Android, and the user can find all of the necessary functionality to manipulate their Ethereum assets. This is one of the newly-released mobile wallets that enables users to interact with ERC-20 tokens.
- safe and simple to use
- approves multi-tokens, Dapps, HDwallet, agenda book, etc.
- securely stores private keys
- backup to avoid misfortune
- adds digital resources in one click
- real-time tracking of transactions
imToken automatically records and shows all of your tokens and their numbers. The majority of people still take tokens manually and then transmit them, but in the new version, a new token-searching function was added: when you click in the field with plus, you will be able to find token entering its name, logo, or contact location.
Using imToken is secure, as you can store your private files. The secret key is not encrypted. Testing it to back up your wallet can be very risky, so it’s better to use KeyStore and mnemonical expressions for double backup.
Eidoo is a multicurrency wallet for iPhone/Android. You should store the private keys on your device, and back up your wallet. Use the unique QR code that you will need for completing transactions.
- private keys
- high security level
- stores all ERC20 tokens
Transferring Tokens from Eidoo
In your wallet, find the list of the available tokens, and
choose the credit you want to transmit. Then click on the Transfer button. Enter the recipient’s address and the number of tokens you need to transfer.
Protect Yourself from Loss
Make a full backup, and do NOT simply supply tokens on your computer. Print it out on a piece of paper, or put it on a USB drive. Try not to lose your secret key or password, as your account may go forever without recovery.
Incompatible Wallets with ERC-20 Tokens
To be on the safe side, it is very important to make sure that your wallet is ERC-20-compatible before getting your tokens. It is better not to use the following types of wallets for token trade:
- any Bitcoin exchange
- any Ethereum exchange
- Jaxx (You can receive any ERC-20 tokens in your Jaxx’s Ethereum address, but ONLY if they are supported by Jaxx. If not, use MyEtherWallet, instead.)
Cold/Hardware Wallets: Trezor and Ledger
If a holder doesn’t feel secure keeping his tokens in just one online wallet, the solution is a hardware wallet, which can come in very handy. This is an electronic device that collects the secret keys of all tokens in an efficient manner. Hardware wallets are much better because they provide a higher level of safety as well as freedom. They are not connected to the internet nonstop and can be preserved wherever you like. In other words, they are USB devices, connected to the computer in order to make transactions using Ethers or Ethereum tokens.
To emphasize, the advantages of a hardware wallet are:
- operates the keys offline, and protects against various types of malware
- comfortable interface; accessible to newcomers in the cryptocurrency area
- protected with passwords
- the option to supply at any point
The disadvantages of hardware wallets:
- high-priced (compared to software wallets)
- not easy to find, as the majority have sold out
In case of damage or loss, you could simply recover it with a table of seed words, which you establish on the gadget and note on the attached sheets. It is better to store seed words in safe place, away from the wallet, and in two sections unless you can lose it. With the help of hardware wallets, you can save your ERC-20 tokens and simply export your secret key from/to any Ethereum-compatible wallets.
The Trezor Hardware Wallet and Its Functionality
Let’s investigate the TREZOR wallet. It’s a hardware wallet that became ERC-20 compatible together with MyEtherWallet, and can be easily accessed on any PC with a USB port.
- easily accessible
- collects secret keys offline
- requires a password during setup
- passphrase to a 24-word seed (provides more security, and you can memorize it to retrieve the wallet, if necessary)
As shown above, TREZOR provides an acceptable level of privacy, and no nicknames or passwords are required. Secrecy can be established by Electrum, MultiBit HD, and GreenAddress on a desktop; Greenbits and Mycelium on Android; and myTREZOR.com on the web.
The user has to install on his PC the Trezor Bridge, a special software that is compatible with Trezor Wallet. One has the option to choose the appropriate form of a wallet, and the Chrome extension is not an exception. However, Linux users will require additional configuration. To use Trezor with Android, make sure your phone supports the USB host; you also need to possess an OTG cable. All instructions and directions are available on the Trezor website.
Ledger Nano S Wallet For Token Storage
Obviously, it’s easy to execute a transaction with Ledger wallet, as it signs a transaction and transmits the data to your computer. You can easily confirm transactions immediately by pressing the button. It features an OLED screen, so you can easily check the data for every transaction. Such functionality is especially relevant when talking about the investor’s security.
- multi-currency approval (Bitcoin, Litecoin, Ethereum, and Altcoins)
- validates agreement on the display
- protection (data is secured with a PIN password)
- backup & recovery (records can be easily backed up and restored on any Ledger device or suitable wallet.)
- low cost
Coinbase Wallet for Storing Ethereum Assets
In fact, Coinbase is an extremely prominent Bitcoin and Ethereum exchange. This platform offers security and guarantees safety, so shareholders can easily follow the crypto boom. Coinbase supports major digital resources, including Bitcoin, Litecoin, Ethereum, and so forth.
The first Coinbase came into use in San Francisco in 2012, and currently operates in 32 states. More than 12 million users trust it, and over $40 billion in digital currencies have been exchanged. Moreover, with Coinbase, users sell their cryptocurrency at a fixed rate, which allows them to invest in cryptocurrencies faster than other exchanges. In addition, Coinbase is one of the few cryptocurrency stock markets that welcomes bank cards, making it much faster and the easiest way to trade.
Nevertheless, before participating in an ICO and getting your tokens to a Coinbase wallet, make sure they are compatible with the wallet. The following cryptocurrencies are compatible with a Coinbase wallet:
Start Your Own Coinbase
- Set up an account (enter nickname and email, and create a secret code.)
- Choose the category of account (approve the email address.)
- Validate the telephone number
- Set up the payment mechanism (2 methods are provided: bank transmission or credit card.) If you choose bank transmission, Coinbase will put up one or two small transactions to and from the main account to authenticate it. If you choose a credit card, a screenshot of the credit card is essential.
Purchase Cryptocurrency. Before transaction approval, Coinbase gives the details of the payment and the total sum of purchased cryptocurrency. After approval, the sum of purchased cryptocurrency will be assigned to the Coinbase wallet.
Nowadays, Coinbase is recognized as one of the most protected platforms. First, it was established in the United States of America and must obey U.S. state and federal law. Second, it actively negotiates with regulators in order to guarantee accessible original economic policy and the attached regulations.
Furthermore, Coinbase has obtained numerous investments from top-level allies, including the Bank of Tokyo and BBVA, making its legitimacy more powerful.
Having analyzed all of the information mentioned above, it’s clear to see that cryptocurrency enthusiasts are looking forward to participating in upcoming cryptocurrency ICOs—and consequently, their number is growing. All in all, Ethereum is expanding, and up-and-coming ventures continue to develop. But one thing’s for sure: ERC-20 tokens are turning into prominent components of the cryptocurrency operation.