ERC-20 is a set of technical standards used for smart contracts on the Ethereum blockchain for implementing tokens. Specifically, ERC-20 defines a set of rules that all Ethereum tokens must abide by. The goal of the ERC-20 standard is to enable interoperability across different tokens within the Ethereum network.
In other words, it allows developers to create an Ethereum token that is compatible with other tokens, so developers don’t have to code all the specific functions for each individual token in the Ethereum ecosystem. ERC-20 tokens are implemented on the Ethereum Virtual Machine (EVM), and each token has its own separate contract address.
This makes it possible for developers to easily mint new tokens and to transfer them to a user’s wallet address. The ERC-20 standard also defines how users and developers can interact with the token contract, making the transfer of the token seamless.
The ERC-20 standard makes it easier for developers to create and issue their own tokens and to deploy them on the Ethereum blockchain. This has allowed for an increased number of projects to be created on Ethereum, many of which fall under the umbrella of Initial Coin Offerings (ICO).
These digital asset offerings have helped to raise the profile of Ethereum and given more people access to investing in blockchain technology.