What is an ERC20 token?

Read our beginner’s guide to Ethereum’s ERC20 token standard.

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A token is a type of cryptocurrency which can be created by anyone, without the need for much technical know-how or skill. This is one of the reasons there are so many cryptocurrencies on the market - tokens have enabled almost any brand, company or idea to make their own in a matter of minutes. ERC20 is a technical standard for tokens issued on the Ethereum blockchain. For a simple explanation of exactly what that means, keep reading.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

What are ERC20 tokens?

Since its launch in 2015, Ethereum has become one of the driving forces behind the growth of cryptocurrency. Initial coin offerings (ICOs) have raised billions of dollars in funding for crypto projects from all around the world, and most of these ICOs are based on the Ethereum platform. Buyers contribute Ether (ETH) or bitcoin (BTC) to participate in a crowdfunding sale, and in return receive some of the ICO project’s native tokens.

ERC20 is a technical standard for tokens issued on the Ethereum blockchain, providing a list of rules that all Ethereum-based tokens must follow. These include how the tokens can be transferred, how transactions are approved, how users can access data about a token and the total supply of tokens. The protocol is necessary to ensure compatibility between the many different tokens issued on Ethereum.

Just like bitcoin, Litecoin and any other cryptocurrency, ERC20 tokens are blockchain-based assets that have value and can be sent and received. The difference is that instead of running on their own blockchain, these tokens are issued on the Ethereum network. This means they’re hosted by Ethereum addresses and are sent using Ethereum transactions.

Did you know?

Want to know why they’re called ERC20 tokens? The “ERC” stands for “Ethereum Request for Comments”, which is an official protocol used to propose improvements to the Ethereum network. The “20” is the unique ID number used to identify the proposal.

Popular ERC20 tokens list

Many crypto newcomers are surprised to discover just how ubiquitous ERC20 tokens are. Take a look at a list of the top 100 digital currencies by market cap and you’ll see plenty of well-known currencies that use the ERC20 standard. At the time of writing (December 2020), these include the following:

It’s worth noting that some coins are launched as an ERC20 token, before being migrated over to their own blockchain. This means that the token will have to be swapped for a coin on the new blockchain once the migration is complete.

Find out more about altcoins in our top 100+ list.

Which wallets support ERC20 tokens?

If you’re buying any digital currency that’s issued as an ERC20 token, you’ll need to find a wallet that’s compatible with these types of tokens. Happily, because ERC20 tokens are so popular, there are plenty of wallets to choose from, including the following:

Name Product Wallet type Supported Cryptocurrencies Price (USD) Disclaimer
Ledger Nano S Wallet
Hardware
BTC, XRP, ETH, BCH, EOS, XLM, LTC, TRX, ADA, MIOTA & 1,330+ more
$59
Securely store some of the world's leading cryptocurrencies on the Ledger Nano S hardware wallet.
TREZOR Model T Wallet
Hardware
BTC, ETH, XRP, USDT, BCH, LTC, EOS, XTZ, LINK, XLM & 1380+ more
$170
The next generation of hardware wallet from TREZOR, the Model T includes a host of new features including a touchscreen and improved processing.
TREZOR One Wallet
Hardware
BTC, ETH, XRP, BCH, LTC, LINK, XLM, HT, USDC, DASH & 1280+ more
$55
TREZOR hardware wallet is a secure way to keep your cryptocurrency safe from hackers and malware.
Sugi Wallet
Hardware
BTC, ETH, LTC, XRP, BCH, ERC20
$73
A NFC cryptocurrency wallet card with a mobile app that supports major cryptos and select ERC20 tokens.
BitBox Hardware Wallet
Hardware
BTC, ETH, ETC, ERC20, LTC
Free download
Designed to combine a minimalist design with maximum security, BitBox is a Swiss-engineered plug-and-play hardware wallet.
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Compare up to 4 providers

To find out ways to securely store your ERC20 tokens, you can begin by comparing the above wallets. You can also learn more about storing your cryptocurrency in our ultimate guide to wallets.

Disclosure: At the the time of writing, the author holds ADA, IOTA and XLM.


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