Although it is still too early to make any definitive statements about what exactly an ERC20 token could be used for, one thing that is clear is that they are in fact an integral part of the future of trading and finance, even if they are only available to a very limited number of people right now. Here are some of the key features of ERC20 tokens that will have you running with enthusiasm when they become a reality in the near future.
o ERC20 tokens are created according to their market cap, so they can be divided and traded as quickly as the market allows. In most cases, the market cap is determined by a mathematical algorithm and it is not based on the underlying assets.
o An ERC20 token can be created in two different ways: either by creating the token yourself using a smart contract or by having the smart contract creates the token for you, according to your parameters. If a smart contract is created, then the process of creating a token is also automated, making this method much easier to implement.
o The first step of the creation process of a token using an ERC20 is to allow users to create accounts. Once these accounts are created, they are assigned a specific public key and private key, which are how ERC20 tokens are stored.
o Private keys are used to store the tokens, but public keys allow other people to access and transfer the tokens. Private keys are also used to sign transactions, and they are stored on a separate, independent server. Private keys are also used to control and verify the validity of the transactions that are being carried out.
o The second step of the creation process of an ERC20 token is to transfer the tokens between people. However, the transfer is actually not necessary – and in most cases, it is not even required. Any token that is transferred, whether it is a sale of an ERC20 token, a withdrawal of an ERC20 token, or a creation of a new one, is done through the use of a smart contract.
o Most of the functions of an ERC20 token, including transferring funds, receiving funds, and creating new ones, are executed in real time. This enables the user to easily see the progress of all transactions that are taking place, regardless of where they are taking place, and what type of account they are taking place on.
So there you have it – three important points that can help you better understand how ERC20 tokens can improve the way in which you trade and operate today. So stay tuned for more!