Why can Ethereum wallet store so many types of tokens?

If you store Bitcoin in your own wallet, you need to use the Bitcoin wallet address; if you store Ethereum, you need the Ethereum wallet address. The Bitcoin wallet address and the Ethereum wallet address are completely different.

Perhaps you have discovered that Ethereum wallets can not only store Ether, but also many other types of tokens.

Today, let’s take a look at what types of tokens can be stored in Ethereum wallets.

01
ERC-20 Token

In the article "Ethereum, known as "Blockchain 2.0"," we introduced that Ethereum is a distributed computing platform that can not only record accounts, but also run programs on it. Its killer feature is the smart contract function.

By using Ethereum's killer smart contract function and the ERC-20 protocol, you can issue tokens on Ethereum and conduct crowdfunding through tokens, i.e. ICO. This type of token based on the Ethereum platform and complying with the ERC-20 protocol is collectively referred to as ERC-20 Token .

So what is the ERC-20 protocol?

Just as the TCP/IP protocol is used to regulate the communication transmission of the Internet, the ERC-20 protocol is one of the standards used to regulate the data communication of the Ethereum platform. Therefore, if you want to issue a token on Ethereum, you need to comply with the Ethereum ERC-20 protocol, which mainly includes: determining the name, abbreviation, total amount, number of decimal places, etc. of the token.

Ethereum wallets are compatible with ERC-20 Tokens. In other words, all kinds of ERC-20 Tokens you have can be stored in Ethereum wallet addresses.

02
Number of ERC-20 Tokens

Ethereum's smart contracts and ERC-20 protocol make it very simple to issue ERC-20 Tokens based on Ethereum.

Through the issuance of ERC-20 Tokens for crowdfunding (i.e. 1C0), many startup projects have raised a large amount of funds for development, such as EOS, which has raised a total of about 4 billion US dollars (after cashing out). However, some unscrupulous project parties have also made a large amount of ill-gotten gains by issuing ERC-20 Tokens.

According to Etherscan statistics, the number of ERC-20 Tokens issued based on Ethereum has exceeded 170,000 . The one with the highest market value is BNB, the platform coin issued by the trading platform Binance.

There is no doubt that in the current market environment where there are mixed fish and dragons and lack of supervision, most of the more than 170,000 ERC-20 Tokens are virtual coins, and we need to learn to identify the authenticity of a blockchain project.

03
Conclusion

Issuing ERC-20 Token is a measure taken by many startup projects to raise funds.