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What are ERC20 and ERC223 Tokens?

What are ERC20 and ERC223 Tokens?

February 21, 2019 8:26 am,

Tokens are developed by platforms such as Ethereum, which makes it mandatory to have tokens to function there. Also, tokens are generated by organizations participating in ICO where they give the investors tokens in return for their contribution. In short, almost anyone can create their own customized tokens for specific purposes. This may lead to some confusions and non-uniformity. In order to avoid this, there are certain standard concepts to be followed by every token within the Ethereum platform. Two such tokens are ERC20 and ERC223. The significance of these standards can be understood by looking at the increasing number of ICO investments in the recent years.

ERC20

ERC stands for Ethereum Request for Comments and is important within the Ethereum platform. There are a large number of tokens that are issued in the Ethereum blockchain as the main function of the platform is to facilitate smart contracts. Since there are a large number of tokens being issued at a time, there is a need to follow certain protocols to ensure proper management of tokens. The main advantages of following ERC20 protocol are to predict the interactions between various tokens. This makes it easy to keep track of the number of tokens generated. It also enables the platform to know the total supply of tokens. The users can also know their account balances with the help of ERC20.

ERC223

ERC223 is also a token of Ethereum and can be understood as a smart contract. As it is really easy to make smart contract through Ethereum, issuing of tokens are also very easy. These tokens have to follow a certain guidelines to qualify as ERC20 or ERC223 tokens. ERC223 can be understood as an improved or better version of the earlier ERC20. There are a couple of advantages to this compared to the older version. A transaction within the platform is made faster with the help of ERC223. The energy savings is also high. A better performance is assured with the latest model.

Tokens VS Cryptocurrency

The main difference between normal cryptocurrencies and ERC20 and ERC223 is that these tokens do not have their own block chain technology. They use the ethereum blockchain in order to carry out the functions. Also, for a token to be standardized, it must have a name, symbol and decimals. All the guidelines have to be fulfilled in order for the tokens to be standardized according to ERC20 or ERC223. Because of the boom in ICO investments since the past few years, tokens have become an integral part of the cryptocurrency and digital currency realm. Better, safe and quick transactions and creation of smart contracts is possible with the help of new improvements in the area.

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