ERC20 wallet

Ethereum is a public blockchain network for building decentralized applications (dapps) using smart contracts, which are written in the programming language Solidity. Ethereum has a native cryptocurrency called Ether (ETH), which is used for transferring value on the network and paying gasfees, which are required to cover the costs of computation across the network and prevent spamming.

However, the existence of smart contracts on the network, which are ostensibly autonomous accounts and computer programs, enables a suite of new functionality in Ethereum not available in Bitcoin. Ethereum is a Turing-complete platform, meaning that virtually any logic can be programmed into applications on the network. Smart contracts are accounts that execute functions automatically on the network, and a group of smart contracts coalesced into a broader purpose form dapps (Decentralized applications).

To facilitate communication and the development of functional, interoperable dapps and smart contracts, a framework for standardized smart contracts for tokens was created. The most prominent of which is ERC-20.

ERC-20 is a standardized format for the creation, issuance, and management of fungible tokens on Ethereum. These tokens have different use cases and applications, such as utility tokens, and are created by developers using ERC-20 as a reference. The standard provides basic formats for transferring and interacting with ERC-20 tokens, which are subsequently used by various wallets to enable the storage, transfer, and management of the tokens.

Standardization leads to rapid innovation and underscores the Internet’s design.

ERC-20 tokens are designed to be fungible, which means that each token unit is equivalent to the next. For example, using the Maker DAO ERC20, 1 MKR is always equivalent in value to 1 MKR.

Most tokens on the network are ERC-20 compatible and can be seamlessly exchanged and transferred for one another on the network. Most of the Ethereum-related tokens you will find on coin aggregation sites are ERC-20 tokens, like Chainlink, Maker, Matic and many more.

Besides ERC-20 on Ethereum, several other standards emerged (i.e., ERC-721) that focus on different types of tokens, such as non-fungible. These non-fungible tokens are designed to represent unique digital assets, like a virtual cat, with the rise of CryptoKitties becoming the flagship example of what non-fungible tokens can accomplish.

The easiest and most reliable way to determine which standard a token is following is to look at its source code.
To do so, head over to Etherscan, and find the token by searching for its contract address (or name). Make sure to double-check with a trusted source that you got the right smart contract address, there are thousands of fake token contracts out there. Take it from one of your transactions for example.
In the Profile Summary on the right, click the contract address, and on the “contract” tab, hit ctrl+F (or cmd+F for Mac) and search for “ERC”. You’ll just have to see if it implements ERC20 standards or others.

Initially proposed by developer Fabian Vogelsteller, ERC20 has ballooned to encompass a series of narratives, from powering the ICO fundraising method and craze of 2017 to underscoring the potential of standardized protocols in public networks.