The Importance of ERC-20 Tokens in the Crypto World 

Bitcoin, the first cryptocurrency, relies on a network of computer nodes to process basic financial transactions between two parties. For example, “A” pays “B” twenty BTC. But the founders of Ethereum realized that by using many nodes spread across the globe, they could achieve much more than just maintaining a transaction ledger.   

Ethereum is a decentralized computing network with its own programming language, Solidity. Developers create applications, called Decentralized applications (Dapps), that operate globally without needing a centralized server. Many Dapps have their own economies and use their own crypto tokens for transactions. However, Dapps must pay the Ethereum network to operate and may also need to pay other Dapps for their services. This requires a standardization system to make sure all tokens created on Ethereum can be used throughout the network and easily converted to Ether for validator fees.   

The ERC-20 Standard  

ERC-20 is a technical standard – or set of rules – developers use to create tokens on the Ethereum network. All tokens following the ERC-20 standard have these characteristics:  

• Fungible: All tokens created for use in a Dapp are identical and interchangeable.   

• Transferable: Tokens can be transferred between wallets on the Ethereum blockchain, with external programs, such as smart contracts, executing transfers on behalf of wallet owners.  

• Constant Supply: New tokens must have a fixed amount from the start to prevent developers from changing the supply to cause inflation or deflation.  

ERC-20 is the most popular token standard on the Ethereum blockchain, but it’s not the only one. It’s also different from Ether (ETH), the native token on the Ethereum blockchain. While you can exchange ERC-20 tokens for Ether, only Ether can be used to pay for processing and network fees.  

Other Network Standards  

Ethereum set the first standard for fungible tokens, but other networks have token rules. These blockchains operate on their own consensus protocols and validator networks, meaning they require their own wallet and are not compatible with ERC-20 or Ethereum wallets.  If you send tokens from these networks to an ERC-20 wallet, the tokens will be lost. Some well-known examples include:  

• Binance BEP2: The Binance token (BNB) began as an ERC-20 token before moving to their Binance’s own blockchain.   

• Solana SPL: Solana’s blockchain is known for fast and efficient smart contracts, making it a strong competitor to Ethereum.   

• Avalanche ARC-20 C-Chain: The Avalanche network has a dedicated blockchain devoted to token creation and management. Avalanche’s developer tools allow users to create new tokens in minutes, using their own ARC-20 standard.   

How to Buy or Sell ERC-20 Tokens  

ERC-20 tokens can only be held in a wallet designed for them. You can find more info on our wallet page.   

There are two types of wallets: “hot” wallets (software that’s always online) and “cold” wallets (physical devices that can disconnect from the internet). The CoinFlip wallet can hold multiple ERC-20 tokens, and other good wallet options include Exodus and Metamask. For cold wallets, consider Ledger and Trezor.

Once you have a wallet, you can buy directly from a CoinFlip ATM with nothing more than a phone number and cash. Read more about it below.  

ERC-20 and CoinFlip  

In addition to Ether (ETH), CoinFlip hosts these ERC-20 tokens at our ATMs:  

• Chainlink (LINK)  

• Pax Gold (PAXG)  

• US Dollar Coin (USDC)  

• US Dollar Tether (USDT)  

Availability varies depending on the U.S. state or country. Visit our offerings page for more details. To find your nearest ERC-20 ATM, check out our locations page.   

The Ethereum network can add its own costs to process ERC-20 transactions. These charges are paid using Ether, Ethereum's native currency. When you buy an ERC-20 token from CoinFlip products, like the ATMs or OTC, we manage these costs automatically, then add it to the total cost of the transaction. It's usually a few dollars, but the exact amount will display on the screen for customers to review before finalizing a transaction. But it's important to note that once you have ERC-20 tokens in your wallet, you will also need a little Ether to pay network fees if you try to send a token to another wallet.

If you are interested in an ERC-20 token not mentioned above, seeking personalized assistance, or prefer to make a purchase via wire transfer, please contact our OTC team, CoinFlip Preferred.  

Additionally, our Customer Support team is available around the clock and can be easily reached for assistance: (877) 757-2646.