Understanding ERC-20 tokens: Unlocking the potential of cryptocurrency
The cryptocurrency world has exploded in recent years and new technologies and platforms appear every day. One of the most widely used blockchain -based systems is Ethereum (ETH), which also houses a wide -decentralized application (DAPP) ecosystem, which is above its platform. One marker stands out between these DAPPs – ERC -20 markers. In this article, we will go into the ERC-20 tokens, their use and how they can be used in the cryptocurrency world.
What is the ERC-20 marker?
ERC-20 (Ethereum request for comments 20) is the standard specification for markers Ethereum blockchain. It is designed for developers to create new digital assets that may interact with other smart contracts and decentralized applications. First-generation ERC-20 markers, also known as ERC-20 tokens or simply “tokens”, created Vitalik Buterin in 2015.
The ERC-20 tokens are formed above the Ethereum Blockchain Public Network (eg Ethereum Mainnet) and can be used to depict various assets, such as:
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Active : Markers can be used as an exchange tool that reflects ownership or control over the digital asset.
- Instruments : ERC-20 markers can also be used as collateral for derivative contracts or as rates in other smart contracts.
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Defi (decentralized financial) assets : Labeled lending protocols and decentralized exchange are just a few examples of how ERC-20 tokens can be used in defi applications.
ERC-20 Cases of Labels
ERC-20 tokens have many cases of use in different sectors, including:
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Cryptocurrency : Many ERC-20 tokens have been created to compete with existing cryptocurrencies such as Bitcoin (BTC) and Ethereum.
- Digital collections : ERC-20 markers have become a popular way to make unique digital assets, such as art, collectible objects or NFT (unnecessarily tokens).
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Games : Many game platforms have integrated ERC-20 on markers, allowing players to earn reward and participate in various activities.
- Insurance
: Some insurance companies have started using ERC-20 tokens to represent the assets of borrowers or even as collateral for processing requirements.
- Social media : ERC-20 markers use social media platforms such as Twitter to make a profit from their users.
Folk uses
Some significant examples of how ERC-20 tokens can be used is:
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Uniswap (V2) : This decentralized exchange protocol is created using ERC-20 markers, allowing users to market different assets.
- DYDX : This decentralized stock exchange is powered by ERC-20 marker, allowing traders to make large-scale transactions.
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Gemini : This decentralized exchange and stabooin platform for local currency uses ERC-20 markers.
Security and Rules
The ERC-20 tokens act on a public blockchain, which in essence means they are sensitive to security risks such as:
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Hacker attacks
: Attackers can use vulnerabilities in smart contracts or wallet software.
- Token Loss : Users can lose all their contributions due to hacking or other malicious activities.
To reduce these risks, ERC-20 marker holders should:
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Use reputable wallets : Invest in hardware wallets such as Ledger or Trezor for safe storage.
- Save private keys in safety : Use multiple sigma purses and hold private keys in safety.
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Check transactions : Always check the transactions before transferring the funds.
Conclusion
ERC-20 tokens offer a wide range of options for decentralized applications, cryptocurrencies and other blockchain-based projects. As the cryptocurrency space continues to develop, understanding the ERC-20 markers will become increasingly important for both developers, investors and users.