WHAT IS A TOKEN ERC-20? List of AirDrops to get free tokens

the list is at the end of the article

With the arrival of numerous fundraisers conducted through ICOs in 2017, the ERC-20 tokens have been much talked about.

According to statistics provided by CoinSchedule, these ICOs would have raised more than $ 3.6 billion this year. Some projects such as Filecoin and Tezos have been able to finance more than 200 million dollars.

But what is an ERC-20 token? Before answering this question, it is necessary to present the blockchain technology on which these digital assets rely.

The ERC-20 tokens: a pure product of blockchain technology

Blockchains are secure, distributed registers that help ensure that transactions can not be falsified.

Bitcoin was the first digital currency to use this technology to record transactions made on its network. Its (or its) developers have fashioned an innovative protocol, which allows to transfer value without having to trust a third authority.

For the first time, it was thus possible to rely on data provided by the network (account balances, past transactions, etc.) without having to trust a centralized organization.

See also: Simple explanation of how blockchain technology works
But the blockchain of Bitcoin is relatively limited: it was imagined almost 10 years ago - an eternity in such an ecosystem. What's more, it was designed solely for the purpose of allowing payments - while blockchain technology can assume many other use cases.

Hence the arrival of Ethereum.

Ethereum is a blockchain network that allows you to deploy programs called "smart contracts".

Launched in 2014 by a small band of engineers, Ethereum was designed to create "a global computer", which can allow each developer to design smart contracts and deploy them on its blockchain.

A smart contract can be presented as a digital asset that includes functions for exchanging value and checking the balances of the holders. These "self-executing" contracts will be able to be used in many economic sectors.

Developers will also be able to develop decentralized applications (dApps) from these smart contracts.

And to work, these applications will rely on tokens, which are themselves smart contracts.

A token is managed by a computer code representing a function that will be associated with a database. This code will define the way the token will behave, and the database will make it possible to know how much each wallet holds tokens. If a user, or another Ethereum smart contract, sends a message to the contract of this token in the form of a "transaction", the code will update the corresponding database.

To facilitate the creation of these tokens, the Ethereum developers have decided, in the process, to implement a specific standard: ERC-20.

But what does ERC-20 Token mean?

ERC-20 (Ethereum Request for Comments 20) is a standard that Ethereum tokens can follow. It defines how new tokens will behave within the Ethereum ecosystem.

The ERC-20 standard is linked to a range of 6 functions that will be recognized by the other smart contracts deployed on the Ethereum blockchain. These include, for example, how a token will be transferred, or how the network will be able to access information about this token (its symbol, its name, the offer in circulation, ...). It will also help to define a standard that will provide the opportunity for other smart contracts to easily communicate with it.

The use of these tokens provides many advantages: more uniformity, less risk, less complexity, ... While developers had to reinvent the wheel before by implementing their own versions of some basic functions, they can now rely on a clear and simple standard to use.

The ERC-20 tokens, financial assets that trade on the markets

Here are some examples of ERC-20 tokens:

Augur (REP)
Gnosis (GNO)
Veritaseum (VERI)
These tokens are assets that can be sent and received, as one would do with any cryptocurrency. They can take various forms: loyalty points, physical objects, skins in video games, etc.

Startups will also be offered the opportunity to raise funds by offering these tokens through ICOs. It should be noted that most of these tokens do not represent a part of these companies, but "utility tokens" that can be used on the platform they are about to propose.

ERC-20 seems to have created a virtuous circle: this standard gives investors confidence that they can easily trade their tokens. This leads them to participate in other ICOs, which encourages developers to launch new projects (although only a handful of these are really interesting). This standard allows the network to host many innovative technologies that enhance the Ethereum blockchain.

These ERC-20 tokens, however, have no intrinsic value: it is the confrontation between supply and demand that will determine their value, relying in particular on the potential of the application on which they can to be used. It will be able to be exchanged on specialized platforms (Bittrex, Binance, Etherdelta, ...).

Here is for example the evolution of the course of Augur (REP) on the year 2017: