ERC20 Tokens Overview

The Ethereum network's launch in 2015 sparked a wave of enthusiasm among developers, resulting in a surge of tokens on the platform. Initially, there were no predefined templates or guidelines for creating tokens, leading to a diverse array of crypto coins. This diversity caused multiple compatibility problems. To tackle this diversity, the community introduced the ERC standard with the goal of bringing consistency and uniformity to all tokens. ERC20 is considered to be one of the most significant ERCs. In its name, ERC is an abbreviation for Ethereum Request for Comment, and 20 stands for the standard’s distinctive identifier. ERC20 standard contains a comprehensive set of guidelines that all tokens built on the Ethereum platform are required to follow.

Nowadays, ERC20 tokens play a crucial role in the Ethereum blockchain world as decentralized digital currencies. What makes them stand out is their ability to seamlessly work with Ethereum's powerful transaction capabilities and fit smoothly into the platform's accounts and wallets. Despite being somewhat similar in terms of blockchain standards, all of these tokens have their unique characteristics, such as ticker symbols, the way they're created, their exchange rates, and their own values.
 

Why Create My Own Token

ERC20 tokens are commonly used in Initial Coin Offerings (ICOs) to attract investment, a process often known as a Token Generation Event (TGE). During a TGE, projects release a specific quantity of tokens to the public in exchange for cryptocurrencies like bitcoins, which is similar to selling startup shares and represents ownership of an asset. 

ERC20 tokens have found diverse and compelling applications within organizations:

• Simplifying the conversion of physical assets, for example art pieces, into digital tokens, which enhances accessibility to a broader spectrum of investors.
• Streamlining various business processes, including supply chain management and voting systems.
• Establishing loyalty and reward programs, effectively incentivizing customer engagement and fostering repeat business.
• Fundraising initiatives, whether it's through Initial Coin Offerings (ICOs) or Security Token Offerings (STOs).
• Streamlining financial transactions, leading to reduced administrative overhead and faster fund transfers.
• Developing decentralized applications (dApps) for various purposes, including decentralized exchanges and voting systems.

Let’s consider a straightforward, everyday scenario that illustrates the practical application of ERC20 tokens, something relatable to everyone. Envision yourself engaging in a loyalty program for a new application launched. It's highly likely that you'll be prompted to share your Ethereum address, and the rewards you accumulate will be seamlessly deposited into your ERC20 wallet. As time progresses, these tokens may eventually find their path to a cryptocurrency exchange, where their value could experience substantial growth, at times soaring by several hundred or even thousands of percentage points.

How To Create My Own ERC20 Token

Now that we understand the reasoning behind creating ERC20 tokens, and why they are so valuable, let's move forward and delve into the creation of our custom token.
When it comes to crafting your token, there are several avenues available, but the most straightforward and widely embraced approaches include the following:

1. Using a token creation platform such as Cryptonotestarter, Kaleido, Waves, or any of their analogues. You will be able to find comprehensive manuals based on the platform that you choose to use, but in a nutshell each platform involves very similar steps, such as choosing a unique name for your coin, giving it a ticker symbol, establishing the total supply pool, deciding the minimum transaction fee for using your coin, etc. 
2.  With your understanding of the ERC20 token standard and smart contracts, you can utilize the source code of an existing ERC20 token, make all of the necessary adjustments, and then deploy the customized contract onto the Ethereum network. After your ERC20 token is created, you can deploy it using an Ethereum client like Metamask or a similar tool.

What If I Don’t Want to Use Third Party Resources?

Of course aside from the ways of creating ERC20 tokens that we listed above, there is another, more difficult way to create your own tokens, which involves writing smart contracts from scratch.  
To do so you’ll need a code editor and any development environment of your choice, any Ethereum wallet, some ETH coins (you will need them to cover the transaction cost, also known as gas) and, the most importantly, the knowledge of Solidity – the programming language used for Ethereum smart contracts.

And since we mentioned smart contracts, let’s briefly talk about what it entails. Essentially, smart contracts function as organized data repositories that connect Ethereum addresses with specific token quantities. Now, these contracts are more than just data storage. They come equipped with a set of meticulously designed functions. These functions serve a crucial role in verifying ownership of precise token amounts within the Ethereum network. Think of them as operators of token transfers that handle the withdrawal of tokens from one user's account, and depositing tokens to another user's balance within this data structure. Beyond these fundamental actions, these functions are capable of executing various other logical processes.

So, of course, the first thing you’ll want to do when creating your very own token that follows ERC20 protocol is writing smart contracts that will run the coin. Kick things off by creating a brand new Solidity file. In this file you'll get to craft the smart contract code, and here's the fun part: just like if you used one of the token creation platforms, you can customize essential token details such as its name, symbol, decimals, and total supply to match your preferences. Yes, as we mentioned before, it requires Solidity knowledge and basic coding knowledge! 
Once you are done with the token’s code, it's time for you to deploy your token on the Ethereum network. Fortunately, you've got a range of user-friendly deployment tools that can be found online to help you with this part of the process.

Now that your token is up and running, it's time to get hands-on. You can easily interact with it using Ethereum wallet interfaces like Metamask. This means you can send tokens, check your balances, and make use of various other ERC20 functions to manage your token. When you are done with this step, test your token on a testnet. This step ensures that your token behaves exactly as you intend and helps to catch and resolve any potential hiccups. Everything is good? Congratulations, it’s time to deploy it on the Ethereum mainnet. This is when your ETH supply will come handy. (This move will come with gas fees). After all these steps are done, you can start looking for potential investors and users of your ETC20 coin.

Where To Store My ETC20 Tokens?

You've got several great choices for storing Ethereum-based tokens in wallets that work seamlessly with the Ethereum network. Here are some popular and user-friendly options:

1. MetaMask: If you want a browser extension wallet that makes managing ERC20 tokens a breeze, MetaMask is a top pick. It's loved for its user-friendly interface and widespread adoption.
2. MyEtherWallet (MEW): MyEtherWallet is a well-known open-source wallet where you have full control over your private keys. It's an excellent choice, especially if you prefer an offline solution.
3. Trust Wallet: Trust Wallet is designed for mobile users and works on both Android and iOS devices. It's versatile and supports a wide range of ERC20 tokens.
4. Ledger Nano S or Ledger Nano X: For those who prioritize security, Ledger Nano S and Nano X are highly regarded hardware wallets that work seamlessly with ERC20 tokens.
5. Trezor: Trezor is another trusted hardware wallet option that's built to keep your ERC20 tokens safe and sound.
6. Exodus: If you're looking for a desktop wallet that can handle various cryptocurrencies, including ERC20 tokens, Exodus is a great choice. Its user-friendly interface makes it accessible to many.
7. Coinbase Wallet: Coinbase offers a dedicated wallet app for storing and managing ERC20 tokens, which is especially convenient if you already use Coinbase.