Have you heard of ERC-20? If not, or you have just listened to the name and have questions about them, this article is for you. We have collected all the key concepts in one place that you need to know about them. Keep reading this article till the end and develop your understanding of tokens and all the essential information you need to know about them.
As the value of cryptocurrencies continues to grow, their popularity has immensely increased. More people take an interest in learning them and show their willingness to invest in digital assets. The leaders in the financial markets further enhance the magnitude of profitability by introducing new cryptocurrency products and cryptocurrency tokens over the existing ones.
There are multiple gateways for people to step into the cryptocurrency markets. NFTs and tokens are new in the market and offer huge profits comparable to that of cryptocurrency. If you are a trader willing to broaden your horizon of earning profits, this article has a whole new chapter for you to explore and make a decision to enhance your profit scale.
Let us look into the token, ERC-20 tokens, and other details related to them. This article contains brief information about receiving and sending ERC-20 tokens, working with Metawallet, and some details about NFTs.
What Is A Token?
To fully understand what a token is, we need to dig into a bit of detail about Ethereum. Many of us are aware of Ethereum as one of the leading cryptocurrencies. It is ranked second after Bitcoin. Most of us do not know about Ethereum is that it has evolved and grown as an investment ecosystem.
Blockchain technology forms the base of all the existing cryptocurrencies. Ethereum is one of them. Ethereum applications are also developed on blockchain technology, and as Ethereum has grown, it is home to many blockchain applications. These applications, just like blockchain technology, offer multiple benefits such as security, immutability, and autonomy. Ethereum based applications are independent, resistant to tampering, and create a distinct environment for ethereum apps developers. These app developers are not usual mobile app or web app developers; rather, they are specialized developers with a command of the technicalities of blockchain technology.
Ethereum applications have broad functionality. These apps issue smart contracts that people can use to create a smart property or tokenized assets. People invest in these tokenized assets. Token offers additional features for its investors. Apps that issue these tokens allow their purchasers different benefits for investing in their tokens. Firstly, purchasers can claim a part in the app’s revenue. Secondly, tokens facilitate trading in the marketplaces based on Ethereum. In the future, it is predicted that tokens may be used to represent trading instruments resembling stocks and bonds. Concisely, depending on the choice of the application developer, tokens offer several options where they can be used.
Like your cryptocurrencies, you cannot store tokens in accounts. Blockchain is a decentralized database where there is a record of each transaction, and information is widely spread across a network of computers. There are mainly blockchains, and each token is specific to the blockchain on which they are formed. Every token on the Ethereum blockchain belongs to an address. The most suitable Ethereum address guides the token’s location- the smart contract and guides the rules associated with this token. Tokens are also marked with developer sets containing name, divisibility, symbol, and other essential token identifiers.
Each token is owned by its investor and has a specific address. The sale and purchase of tokens require current owners to request to change the Ethereum wallet address. The request for an address change is sent to the contract directing with a message to allocate whole or part of the balance to a new Ethereum wallet. Transferring ownership on Ethereum blockchain is not free and requires owners to pay a transaction fee, also known as gas price.
What Is An ERC-20 Token?
In Ethereum, tokens may represent almost anything:
In a digital platform, reputational points are awarded, a gaming character’s financial assets, such as a company’s stock, a fiat currency such as the US dollar, a gram of gold, and much more.
Isn’t it true that such a strong feature of Ethereum has to be managed by a reliable standard? That is precisely where the ERC-20 comes into the picture! Developers can use this specification to create token apps that work with other items & services.
As we discussed above, tokens are specific to the blockchain technology on which they are denominated. ERC-20 token is specific to the Ethereum blockchain. In every aspect of life, be it financial or non-financial, regulations are mandatory for uniform operations. Cryptocurrencies have defined a set of rules, and it is compulsory that tokens also follow some rules that will govern their programming and make them compatible.
ERC-20 is a technical standard token of Ethereum blockchain, and The term ERC-20 stands for “Ethereum Request for Comments.” It was implemented in 2015. This token forms the base for issuing all smart contracts on the Ethereum blockchain and provides a list of regulations that all tokens based on the Ethereum blockchain must follow. Using these regulations, anyone can create digital assets and interact without hindrance. Furthermore, these regulations also simplify receiving, storing, exchanging, and sending ERC-20 tokens by enabling their infrastructure.
There are many ERC-20 tokens. The most popular ones include Chainlink (LINK), Shiba Inu (SHIB), Ox (ZRX), Wrapped Bitcoin (WBTC), Tether (USDT), and OmiseGO (OMG).
Now that you have an idea about tokens and specifically ERC-20 tokens, let us learn further details about it.
How To Keep Track Of ERC-20 Tokens?
When you invest in any digital asset, it is essential for you to consider all the aspects of sending, receiving, and storing them. It is crucial to keep them secure and accessible too.
ERC-20 is standardized, so there is a defined infrastructure to use them. It includes the right selection of wallets and other ER-20 related services that make it easier for investors to use.
What Is The Procedure To Send ERC-20 Tokens?
Do you remember we mentioned a blockchain and wallet address map while discussing tokens? Its importance will be more evident in this part of the article.
All ERC-20 have an Ethereum wallet address. It defines where and to whom the token belongs. While selecting your wallet service provider, you must inquire if they support ERC-20 tokens and give an option to access your ERC-20 token balance. Do not worry. ERC-20 tokens are no exception, but some wallet service providers may restrict permission to view your ERC-20 tokens even when allowing their storage.
One main thing to consider while sending and receiving ERC-20 tokens is that they require a fee for transactions. Miners charge these fees for users for providing them with the service of including their transactions in the blockchain. These gas fees can significantly increase if the number of users performing transactions on the Ethereum blockchain is higher. Experts recommend checking gas prices on sites such as Eth Gas Station prior to completing a transaction. The transaction fee is not much affected whether you are using a centralized exchange or a hot wallet.
The procedure (like the transaction fee) is similar whether you are using a wallet from a centralized exchange or a software wallet. The sender enters the recipients’ Ethereum wallet address and selects the token option. Tokens are transferred within a minute. So it is entirely your choice that where you want to store your ERC-20 tokens.
What Is The Procedure To Receive an ERC-20 Token?
The fact that you are here and still reading this article, it is most likely that you have to receive an ERC-20 token. Let us resolve your queries and disclose the procedure to obtain an ERC-20 token.
Users receive ERC-20 tokens in a wallet, so you must have a wallet that supports the ERC-20 token you intend to receive. You must counter-check the enlisted ERC-20 and ensure that your preferred digital assets are on the list. When specified tokens are on the list, it is unlikely that it does not support the wallet address.
As per the data, more than 200,000 ERC-20 compatible tokens exist on Ethereum’s main network and there is a long list of wallets that accept ERC-20 tokens. The leading ones are MetaMask and MyEtherWallet while others include Parity, Mist, Trust, and imToken. It is recommended to use any of these enlisted wallets as accessing ERC-20 is more manageable with them.
Ethereum wallets are highly secure. When you open an account on these wallets, you are granted a seed phrase to use to access your account. A seed phrase refers to a 12-word long list of random words that you use to enter in your ERC-20 wallet when you forget your password or lose access to your wallet.
One more thing that must be of concern is how much time it takes to deposit and receive ERC-20 tokens. Interesting isn’t it? Transferring ERC-20 tokens takes as much time as it takes for an email to come into your mailing account. The only time that is needed to receive an ERC token is the time for confirming the transaction. The average time for receiving an ERC-20 token and confirming is 10 minutes.
Getting ETH And A Wallet With MetaMask
Cryptocurrencies are digital currencies that are not governed by a central authority such as a government or a bank. Since Cryptocurrency is heralding a decentralized, community-driven, and neighborhood future of the internet, it all begins with setting up your wallet with this developing technology, which will connect you to a groundbreaking worldwide community.
Visit https://metamask.io/ to find a browser plugin that works with your browser.
Install the necessary plugin by clicking on it.
After you’ve successfully installed the plugin, click on the button to establish and verify your user passcode.
Agree to the terms of service and authorise the extension to expose your seeding expression. It’s a good idea to keep multiple copies of these personal phrases in safe places. The account registration process is completed once you have supported your seeding word.
Go to the Submit Ether Directly page to see your ERC-20 or ETH address. Then, to verify and save your address, go to the View Account. You may now put the Ethereum address into an airdrop site that asks for an ERC-20 address in order to receive free of charge tokens.
Receiving, Sending, and Viewing NFTs at MetaMask
You have gotten ERC-20 tokens as part of an airdrop. If you are feeling any discomfort, follow the steps below, you will find this pretty simple. If you can’t locate the token when you are at the Assets menu, you may have to update it personally. To widen the search, go to the Add Token menu and choose Customized Token.
The token address must be entered in the corresponding field. The Token Sign and Decimal fields are frequently auto-filled. If not, you’ll have to look for the token program’s instructions to learn more. On the explorers based on Ethereum blockchains such as Etherscan or Ethplorer, you may look up the token agreement address. Even greater, you may ask the seller for the token address directly. Airdrops that do not provide token contract locations should be avoided. When you’ve finished filling out all of the fields, take the next step and click Next and pick.
In MetaMask Mobile, sending and receiving NFTs is simple; however, the capability is not yet available in MetaMask Extensions.
How to View NFTs in MetaMask
Though you may add NFTs as custom tokens in the extensions, you would not be able to view them in the User Interface directly.
NFTs have been listed under Collectible in MetaMask mobile App. Keep in mind that some NFTs may not appear in the Collectibles section of the mobile app or may appear incorrectly.
Because not all NFTs are similar, a collectible ID serves as a distinctive identifier. Please try looking for the ID on the application where you bought it.
Receiving An NFT
When you obtain an NFT, it’s usually instantly transmitted to you via a marketplace. If that’s not the situation, take the following procedures and double-check them to achieve a successful transfer:
Give the sender your current mailing address. You may find instructions for doing so here. Make certain you have just enough ETH to cover your gas expenses. Request that the NFT be sent to your public address from the sender. Tokens must be added to your MetaMask wallet. Because NFTs are not yet viewable on the web browser, we advise doing so via the MetaMask mobile app. The NFTs should display under ‘Collectibles’ in MetaMask Mobile if you are viewing at the right account and wallet in MetaMask.
Sending An NFT
In MetaMask, transferring an NFT (an ERC-721 token) is remarkably identical to transferring a bitcoin token (which is an ERC-20 token). This feature should only be used on MetaMask Mobile at the moment.
Check to see whether you have sufficient gas to complete the transaction. Then select the ‘NFTs’ tab. Now select the NFT you want to transmit by tapping on its icon. At the bottom of the display, tap the ‘send’ button. Finally, enter the recipient’s address, click ‘Next,’ and complete the regular transaction steps.
Wallet for Ether (MEW)
MEW is termed “Ethereum’s Original Wallet” because it is an absolutely free, user-friendly, open-source platform for interacting with the Ethereum network. Clients may receive and send cash on the Ethereum blockchain, handle non-fungible tokens (NFTs), manage on some other Ethereum compatible networks (Binance Smart Chain, Ethereum Classic, Polygon, etc.), and engage with clever contracts using the platform. Users may also look into decentralised apps (DApps) and set up a web domain for their Ethereum wallet.
Ethereum Transaction ID
All confirmed and stored transactions on the blockchain are assigned a transaction ID (TXID) or transaction hashes, which is a specific sequence of characters. To put it another way, a TXID is a unique integer that identifies each activity on the blockchain.
A transaction is assigned a transaction ID as a unique identification number when it is made and uploaded to the blockchain. You may then look for that in a block explorer by looking for the transaction ID, dependent on the blockchain. This might be helpful for validating fundamental transaction details, including the amount transmitted, the transmission date, the sending/receiving address, and the number of confirmations obtained.
The ERC-20 establishes a standard for Fungible Tokens, which means that each Token has a trait that makes it identical to another Token in terms of both type and worth. An ERC-20 Token, for example, functions similarly to ETH, meaning that one Token is and always will be equivalent to other Tokens.
As you may have observed, creating an ERC-20 address and receiving tokens is pretty simple. One thing worth noting is that ERC token transfers require ETH gas costs. As a result, before processing the transaction, make sure you have enough ETH to cover the cost.