Cryptocurrency enthusiasts are well aware that the world of digital assets thrives on diversity, boasting a plethora of blockchains and a wide range of unique networks. When someone (whether they are a cryptocurrency savvy or just beginning their journey) conducts a cryptocurrency transfer, they will inevitably enter the realm of networks, where diverse token operations unfold. Nowadays, crypto investors commonly favor networks like ERC20, BEP20, or TRC20. In this article we will talk about two of the leading token standards – BEP20 and ERC20. ERC stands for Ethereum Request for Comment, and the ERC20 token is a product of the Ethereum blockchain, serving as its development standard. On the other hand, BEP20, which stands for Binance Smart Chain Evolution Proposal, may not have achieved the same level of popularity as ERC20, but it is steadily expanding in tandem with the Binance Smart Chain, where it serves as the native standard blockchain. While those two token standards share similar functionalities, there are some notable distinctions between the two, which is important to understand if you want to make educated financial decisions.

But let’s start from the very beginning.

WHAT DO WORDS “CRYPTO TOKEN STANDARD” MEAN

Here is a simple explanation for those of our readers who are just starting to work with cryptocurrencies and need help understanding the meaning of some terms: To put it simply, token standard is a set of technical guidelines that oversee the creation, issuance, and deployment of new tokens on a blockchain. These guidelines are established to safeguard against fraudulent activities within the network, to ensure that developers create tokens that adhere to the blockchain's principles and are compatible with other tokens within the network. 

ERC20 TOKEN STANDARD: AN OVERVIEW

ERC20 standard was created in 2015, right in the middle of the cryptocurrency boom. It represents a set of technical rules governing the creation of tokens on the Ethereum blockchain. In the dynamic landscape of the Ethereum network, ERC-20 tokens have played a pivotal role, serving as catalysts in the rise of initial coin offerings (ICOs), the proliferation of decentralized applications (DApps), and the flourishing tapestry of blockchain-driven ventures. Their widespread embrace has firmly established them as not just a feature but a cornerstone, anchoring the Ethereum blockchain and contributing significantly to the broader cryptocurrency panorama.

Some of the main ERC20 tokens are Tether (USDT), Chainlink (LINK), Uniswap (UNI), Wrapped Bitcoin (WBTC), USD Coin (USDC), Binance USD (BUSD), UNUS SED LEO (LEO), OKB (OKB), Shiba Inu (SHIB) and Dai (DAI).
ERC-20 tokens offer a multitude of advantages. First and foremost, their simplicity in creation and management stems from their utilization of the Ethereum network's robust infrastructure. Consequently, businesses and organizations are spared the intricacies of establishing and overseeing their blockchain, allowing them to channel their efforts into application or platform development.

Another notable benefit of ERC-20 tokens lies in their remarkable flexibility. These tokens seamlessly integrate into diverse applications, including decentralized exchanges and various platforms. This adaptability simplifies user engagement with these tokens.

WHAT IS BEP20 TOKEN STANDARD AND HOW IS IT DIFFERENT FROM ERC20

BEP20 emerged as an extension of ERC20, naturally inheriting its fundamental characteristics. Nonetheless, distinct differentiations exist between these two token standards. This token standard is specifically created for the Binance Smart Chain (BSC) blockchain, and similar to ERC Its purpose is to empower developers to create and launch tokens on the Binance Chain, offering capabilities such as smart contracts, an advanced governance system, and impressive throughput. Some of the most notable BEP20 tokens are Tether USD (USDT), USD Coin (USDC), Binance USD (BUSD), Lido DAO (LDO), PancakeSwap (CAKE), Trust Wallet Token (TWT), PAX Gold (PAXG), Neutrino USD (USDN), Mask Network (MASK), Kyber Network (KNC)
Nevertheless, despite the resemblances, there are some key distinctions that set BEP20 apart from the ERC20 standard. 

GAS (TRANSACTION) FEE

The main distinction (and the one that is often most important for crypto users) is, of course, gas fee. BEP20 tokens boast lower gas fees in comparison to ERC20 tokens (and often even lower than those for TRC20 tokens on the TRON blockchain). The rationale behind this is that when conducting transactions with ERC20 tokens, ETH — the native coin of the Ethereum network, known for its high gas fees — is used to cover the transaction costs. In contrast, when dealing with BEP20 tokens, BNB is utilized to cover the gas fees.

TRANSACTION SPEED

Another remarkable advantage of BEP20 tokens is the transaction speed. Transactions made using the BEP20 token standard are typically processed in just 3 seconds, whereas ERC20 transactions require 15 seconds for confirmation. The efficiency of BEP20 tokens becomes even more apparent when considering their capacity to handle a significantly higher transaction volume, reaching up to 1,400 transactions per second. In contrast, ERC20 tokens exhibit a more limited throughput, capable of processing a maximum of 20 transactions per second. These disparities underscore the superior speed and scalability of BEP20 tokens, making them a compelling choice for projects seeking rapid and efficient blockchain transactions. 

TRANSACTION SECURITY

Here comes a fly in the ointment. As we learned from the previous paragraphs, BEP-20 tokens offer a tempting proposition with their enhanced transaction speed and cost-efficiency attributed to the Binance Smart Chain's PoSA block validation model. However, this very model has drawn considerable attention for its potential security shortcomings. In stark contrast to Ethereum, which boasts a network of over 70,000 validators ensuring block verification, the Binance Smart Chain relies on a modest selection of just 21 validators. The contrast in validator numbers between the two platforms has sparked concerns within the crypto community about trust and decentralization on the Binance Smart Chain. These discussions underscore the importance of evaluating trade-offs carefully when choosing between the advantages of speed and cost and the principles of security and decentralization in the world of blockchain and cryptocurrency.

CREATION OF NEW TOKENS

Transaction security is not the only advantage that ERC20 can offer. While both ERC20 and BEP20 standards facilitate the customization of tokens, ERC20 enjoys a more extensive toolkit and resource base for token creation, primarily owing to the formidable presence of Ethereum's well-established developer community. The Ethereum network, renowned for its robustness, has long been at the forefront of blockchain innovation. In contrast, BEP20, tailored for the Binance Smart Chain, initially faced a discrepancy in available resources. However, the landscape is rapidly evolving, with the Binance Smart Chain experiencing a surge in adoption and a remarkable upswing in its developer community. 

IS IT POSSIBLE TO SEND BEP20 TO TRC20 OR ERC20?

Transferring BEP20 to TRC20 and ERC20 tokens addresses is indeed a possibility, but it's important to note that the process can be intricate. The most commonly chosen method involves leveraging cryptocurrency exchanges, which provide a user-friendly platform for conducting smooth token swaps between ERC20, TRC20, and BEP20, variants. Alternatively, users can explore the Binance Smart Chain Bridge, a technological bridge that seamlessly connects these distinct blockchain ecosystems, simplifying the transfer of cryptocurrencies from one to the other. For those seeking to move assets between these two networks, the prudent approach is to enlist the assistance of a specialized bridge or gateway service, designed to streamline the exchange process between BEP20, ERC20, and TRC20 tokens.

SUMMARY

To recap, let's revisit the primary distinctions between ERC20 and BEP20 tokens:

Platform: The fundamental contrast between BEP20 and ERC20 tokens hinges on their underlying blockchain protocols. ERC20 finds its foundation on the Ethereum blockchain, benefiting from wider recognition and acceptance, a consequence of its more extensive tenure in the realm of cryptocurrencies.

Transaction fees (gas): BEP20 tokens hold a clear edge with their more affordable transaction fees compared to ERC20 tokens. This cost-efficiency stems from the utilization of BNB to handle gas fees in BEP20 transactions, in stark contrast to ERC20 transactions that necessitate the use of ETH, known for its substantial gas fees.

Transaction speed: BEP20 tokens excel in transaction speed, often finalizing transactions within a mere 3 seconds, while ERC20 transactions require a 15-second confirmation period. Furthermore, BEP20 tokens exhibit impressive scalability, capable of processing a considerably higher transaction volume, reaching up to 1,400 transactions per second. In contrast, ERC20 tokens are constrained, with a maximum throughput of just 20 transactions per second.

Transaction security: While BEP20 tokens provide swift transactions and cost-effectiveness, the Binance Smart Chain's PoSA block validation model, which relies on a mere 21 validators, has sparked security apprehensions. Ethereum, on the other hand, has a strong security infrastructure with over 70,000 validators, making it more secure and decentralized than BEP20.

Creation of new tokens: ERC20 benefits from a more extensive toolkit and resource base for token creation, thanks to Ethereum's well-established developer community. In contrast, BEP20 initially faced resource discrepancies but has been rapidly growing its developer community.

Token conversion: Token conversion is indeed possible, although it is a complex procedure that might involve bridge services and online cryptocurrency exchanges.

So, which should you opt for: ERC20 or BEP20? This choice is a decision driven by your unique needs and priorities. If your primary concern is ensuring compatibility with a diversity of crypto wallets and exchanges, while prioritizing security, then ERC20 stands out as the ideal choice. But if you are focused on cost-effectiveness and swift transaction processing, BEP20 would be the best option for you.