The world of cryptocurrency is built on standards that ensure interoperability, security, and usability across platforms. One of the most influential standards in this space is ERC20, a technical specification that has become the foundation for thousands of tokens on the Ethereum blockchain. Whether you're new to digital assets or exploring decentralized applications (dApps), understanding ERC20 is essential.
This guide breaks down what ERC20 is, how it works, its real-world applications, and what you need to know about managing ERC20 tokens—especially if you're using a digital wallet like Bitcoin.com Wallet.
Understanding the ERC20 Token Standard
ERC20 stands for Ethereum Request for Comment 20, a protocol proposal that defines a set of rules for creating fungible tokens on the Ethereum blockchain. Introduced in 2015 by Fabian Vogelsteller, ERC20 quickly became the de facto standard for token development due to its simplicity and compatibility.
By following the ERC20 standard, developers ensure their tokens can interact seamlessly with other Ethereum-based services—including wallets, decentralized exchanges (DEXs), smart contracts, and dApps.
Core Functions of ERC20 Tokens
Every ERC20-compliant token must implement six key functions:
totalSupply()– Returns the total number of tokens in circulation.balanceOf(address)– Checks the token balance of a specific wallet address.transfer(address, amount)– Allows users to send tokens to another address.transferFrom(address, address, amount)– Enables third-party transfers (e.g., via smart contracts).approve(address, amount)– Grants permission for another address to spend tokens on your behalf.allowance(owner, spender)– Checks how many tokens a spender is allowed to transfer from an owner’s balance.
These functions ensure consistency and predictability across all ERC20 tokens, making integration easier for developers and safer for users.
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Why ERC20 Matters in the Crypto Ecosystem
The introduction of the ERC20 standard revolutionized token creation and distribution. Before ERC20, every new token required custom integration with wallets and exchanges. Now, any compliant token automatically works across the Ethereum ecosystem.
This standardization fueled the rise of:
- Initial Coin Offerings (ICOs): Many projects raised capital by issuing ERC20 tokens during the 2017–2018 boom.
- Decentralized Finance (DeFi): Most DeFi protocols use ERC20 tokens for lending, borrowing, staking, and yield farming.
- Stablecoins: Prominent examples like USDT (Tether) and USDC (USD Coin) are issued as ERC20 tokens.
- Governance Tokens: Platforms like Uniswap (UNI) and Aave (AAVE) distribute governance rights through ERC20 tokens.
Because of these use cases, thousands of ERC20 tokens now exist on Ethereum, each serving unique purposes—from utility and rewards to equity representation.
How to Use ERC20 Tokens: Gas Fees Explained
To send or interact with any ERC20 token, you need Ethereum (ETH) in your wallet—not for purchasing the token itself, but to pay network transaction fees known as gas fees.
Gas fees compensate Ethereum validators (under Proof-of-Stake) for processing and securing transactions on the blockchain. These fees fluctuate based on network congestion. During high-demand periods—such as major NFT drops or DeFi launches—gas prices can spike.
Important Notes:
- Gas fees are paid in ETH only, never in the ERC20 token you're transferring.
- Services like Bitcoin.com Wallet do not receive or profit from these fees—they go entirely to the Ethereum network.
- Always keep a small amount of ETH in your wallet when managing ERC20 tokens.
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Which ERC20 Tokens Does Bitcoin.com Wallet Support?
Bitcoin.com Wallet supports all ERC20 tokens, giving users full control over their digital assets without requiring Know Your Customer (KYC) verification. This means you can receive, store, and send any compliant token built on Ethereum.
However, while the wallet technically supports every ERC20 token, only a limited number appear by default in the app interface. This is done to maintain performance and user experience.
How to View All Your ERC20 Tokens
- Open the Bitcoin.com Wallet app.
- Tap the "Receive" button at the top of the toolbar.
- Scroll down to see supported tokens.
To add a custom token not listed:
- Manually input the token contract address.
- Confirm symbol and decimal precision.
- Save and start using it immediately.
This flexibility empowers users to manage emerging projects and niche tokens beyond mainstream listings.
Frequently Asked Questions (FAQ)
What does ERC20 mean?
ERC20 stands for Ethereum Request for Comment 20. It's a technical standard used for creating and implementing tokens on the Ethereum blockchain. The "20" refers to the proposal number assigned by the Ethereum community.
Can I store non-ERC20 tokens in Bitcoin.com Wallet?
Bitcoin.com Wallet primarily supports Bitcoin (BTC), Ethereum (ETH), and all ERC20 tokens. For tokens on other blockchains (like BEP-20 or SPL), you’ll need a multi-chain wallet or a dedicated solution.
Do I need ETH to receive ERC20 tokens?
You don’t need ETH to receive ERC20 tokens—anyone can send them directly to your wallet address. However, you’ll need ETH to send or interact with those tokens later, since gas fees must be paid in ETH.
Are all tokens on Ethereum ERC20?
No. While most fungible tokens follow the ERC20 standard, others use different specifications:
- ERC721: For non-fungible tokens (NFTs).
- ERC1155: For semi-fungible and multi-token standards.
So always verify a token’s type before transacting.
Is sending an ERC20 token risky?
As long as you:
- Double-check recipient addresses,
- Use trusted wallets,
- Confirm gas fees before submitting,
…then transactions are secure. Mistakes—like sending tokens to incompatible chains—are irreversible, so caution is crucial.
Can I lose my ERC20 tokens?
Yes—if you lose access to your private keys or seed phrase, your tokens are unrecoverable. Never share your recovery phrase, and consider using hardware wallets for large holdings.
Final Thoughts: The Lasting Impact of ERC20
ERC20 isn’t just a technical blueprint—it’s a cornerstone of modern blockchain innovation. By standardizing how tokens behave, it lowered barriers for developers, accelerated product launches, and enabled global participation in decentralized economies.
Today, even with newer standards emerging, ERC20 remains dominant in terms of adoption, liquidity, and infrastructure support. Whether you're investing, trading, or building on Ethereum, familiarity with ERC20 gives you a critical advantage.
As blockchain technology evolves, standards like ERC20 will continue shaping how value moves across digital ecosystems—securely, efficiently, and openly.