Erc-20 tokens are a new form of cryptocurrency that are run off of Ethereum’s blockchain
To break down what I just said let’s start with Erc-20 tokens. Erc-20 tokens are exactly like cryptocurrencies, they’re both online, use blockchain, and can represent forms of value.
Differences Between Crypto’s and Tokens
There are many key differences between crypto’s and Erc-20 tokens, here we’ll go in-depth about what those differences are and what advantages and disadvantages that brings to Erc-20 tokens.
Type of Blockchain
The way Erc-20 tokens interact with blockchain is very different from regular cryptos is that whereas regular cryptocurrencies create their own blockchain, Erc-20 tokens use Ethereum’s blockchain. This means that one of the hardest problems with crypto’s, adoption, can be solved.
Adoption is a massive problem with blockchain. This is because the blockchain is only as fast as the amount of “nodes” aka computers that are running the blockchain. This means that when very few people are online in the blockchain, the speed of transactions grinds to a halt, or could end up cancelling all transactions.
Java vs Solidity
When building a token, you use Solidity, a coding language that Ethereum created based on Java. Whereas you’d use Solidity to create a token you’d use Java to make a cryptocurrency. This is because, as talked about above when you use Solidity you interact with Ethereum’s blockchain whereas when you use Java you’d create your own blockchain.
This means that not only is it much more costly to go to with Java, however, it offers more customizability as you are making your own blockchain and therefore offers many more things to do with this. This is both good and bad because it means that Solidity offers slightly less customizability for more access and better developer support versus Java offering less support in exchange for more customizability
Ethereum vs Everybody
Tokens are Ethereums own attempt at recreating the crypto-boom that took over the world. Basically by making a much more easy to make and intuitive interface for making online currencies. The current way to make cryptocurrencies is inefficient is much harder compared to Ethereum’s but it also offers more customizability and room to expand and commercialize the currency.
Now that we know what the differences between cryptocurrencies and tokens are, let’s see what so great about them after all!