Many people are curious what is ERC20, and what it means? It is short for “Internet based Decentralized Computing Currency”. These smart contracts can be used anywhere using a Web browser. Basically, if someone wants to buy a dog, they can use either ether or dollar to pay for their pet.
Now, let’s get down to business; what is ethereum, and what makes it different from other platforms? Basically, ethereum is a more refined version of bitcoin. While it follows much of the same transactional patterns (such as: buyer and seller), it also adds something else: smart contracts.
Basically, ethereum is a more refined version of bitcoins. While it follows much of the same transactional patterns (such as: buyer and seller), it also adds something else: smart contracts. A smart contract is a program that run on the ethereum network and is programmed to perform certain tasks, such as: either transfer the ownership of a specific asset between two parties, or create an asset on the ethereum Asset Exchange.
However, this programming language isn’t limited to the two mentioned uses; it can also be used for other purposes. One of these uses is to create a digital currency, which can be used to trade any asset on the ethereum network. Now, you may be wondering why anyone would want to trade an asset on the ethereum network. There are three main reasons: scalability, liquidity and flexibility.
Scalability is what makes ether currency great. It allows users to run any program on a network that handles multiple users and multiple programs. This is in contrast to the limitations that bitcoin places on its users. If you compare the size of the Bitcoin block to that of the ethereum’s 10 minute average transaction, you’ll see that the transactions required by a single user is orders of magnitude smaller than the blocks of the former. Liquidity refers to the ability of buyers and sellers to easily convert currencies. Since ethereum doesn’t yet have this feature, some traders have turned to other platforms such as Dash and Counterparty to trade.
Flexibility refers to how easy it is to interact with the ethereum platform. This is achieved through its own built in trading platform, called the Mist browser. However, since ethereum doesn’t yet have smart contracts, some traders have turned to online brokers to execute their trades. Since these brokers control their own digital currency, they can give their users complete freedom over their money. And, although these brokers don’t have access to the public ethereum network, they are still able to execute transactions on the same secured network.