Everything You Should Know About Technical Standards for Fungible Tokens
The concept of fungible tokens is quite old when coin-like objects were traded for gaming. Then in the 19th century, merchants used fungible tokens for trading. Fast forwarding to recent times, casino slot machines are using fungible tokens that get interchanged with money.
What is a Token in the Crypto World?
In this crypto era, tokens are the representation of a tangible (physical) or intangible (non-physical or a service) within the native ecosystem. These tokens are created, managed, and distributed using blockchain technology. A token can have some utility, market value, or anything that makes it desirable for potential buyers.
What is a Fungible Token?
A fungible token is a cryptocurrency such as Bitcoin. These tokens are completely divisible and interchangeable. Fungible tokens can be easily used in cryptocurrency like Bitcoin: 1 Bitcoin has the value of 1 Bitcoin, no matter where it has been issued.
What are Token Standards?
Token standards are the rules and guidelines to decide the design, development, operations, and behavior of cryptocurrency tokens within the given blockchain protocol. These standards include the guidelines for the creation, issuance, transfer, deployment, destruction, and related attributes of tokens within the underlying blockchain.
Technical Standards for Fungible Tokens
While there are various standards for tokens, the ERC (Ethereum Request for Comments) standards are the most popular. Some of them include ERC-20, ERC-165, ERC-21, ERC-223, ERC-865, ERC-621, ERC-777, ERC-884, ERC-827, and ERC-1155.
ERC-20 is one of the most popular token standards used for fungible tokens. It enables blockchain developers to code smart contracts that are run with predetermined conditions. This is a standard interface for fungible tokens like staking, voting, or virtual currencies. For example, a new crypto token can be issued in an Ethereum-based blockchain network while complying with ERC-20 standards.
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