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Are you interested in investing in cryptocurrencies but feel overwhelmed by all the technical jargon? Don’t worry; you’re not alone. One of the most important concepts you need to understand when dealing with Ethereum-based cryptocurrencies is ERC-20 tokens and addresses. In this beginner’s guide, we’ll walk you through what ERC-20 tokens are, how they work, and how to use them.

What are ERC-20 Tokens?

ERC-20 tokens are digital assets created on the Ethereum blockchain using a specific set of rules or standards. These tokens are used to represent various assets like coins, loyalty points, and even company stocks.

ERC-20 tokens have become very popular because they can be easily exchanged, transferred, and stored in digital wallets. This standardization ensures that these tokens are compatible with various applications, wallets, and exchanges, making it easier for users to manage their assets.

How do ERC-20 Tokens Work?

ERC-20 tokens are built on top of the Ethereum blockchain, which is a decentralized network of computers that maintain a ledger of all transactions. The Ethereum blockchain uses smart contracts, which are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code.

When someone creates an ERC-20 token, they write a smart contract that defines the rules of the token. This contract includes information such as the total supply of tokens, the name of the token, the symbol, and the number of decimals. The contract also includes functions that allow users to transfer, approve, and check balances.

How to Create an ERC-20 Token

If you’re interested in creating your own ERC-20 token, you can do so using various tools and platforms. One such platform is the Ethereum network itself, where you can write a smart contract and deploy it on the blockchain.

Another popular platform is the ERC20 token generator, which allows you to create a custom ERC-20 token without the need for coding knowledge. All you have to do is fill in the necessary information, such as the token name, symbol, and supply, and the platform will generate the smart contract for you.

ERC-20 Addresses

Now that you understand what ERC-20 tokens are, let’s talk about ERC-20 addresses. An ERC-20 address is a unique identifier that is used to send and receive ERC-20 tokens on the Ethereum network.

ERC-20 addresses are similar to Bitcoin addresses, but they start with 0x and are 42 characters long. These addresses are case-sensitive, so it’s essential to copy and paste them correctly.

When you send ERC-20 tokens to an address, the transaction is recorded on the Ethereum blockchain, and the recipient’s balance is updated. You can also check your balance and transaction history by searching for your address on blockchain explorers like Etherscan.

How to Receive ERC-20 Tokens

To receive ERC-20 tokens, you need to provide the sender with your ERC-20 address. You can find your ERC-20 address in your digital wallet, such as MyEtherWallet or MetaMask.

When someone sends you ERC-20 tokens, they will appear in your wallet’s balance once the transaction is confirmed on the Ethereum network. You can then manage these tokens, send them to other addresses, or trade them on cryptocurrency exchanges.

How to Send ERC-20 Tokens

Sending ERC-20 tokens is similar to sending any other cryptocurrency. First, you need to have an ERC-20 compatible wallet that supports the token you want to send. Once you have the wallet set up, you need to have enough balance in the wallet to cover the transaction fee, which is paid in Ether.

To send ERC-20 tokens, you’ll need to know the recipient’s ERC-20 address. This is a unique identifier that’s used to send and receive ERC-20 tokens on the Ethereum network. It’s essential to make sure you have the correct address, as sending tokens to the wrong address can result in permanent loss.

Once you have the recipient’s address, you’ll need to initiate the transaction from your wallet. In most wallets, this involves selecting the token you want to send, entering the recipient’s address, and specifying the amount you want to send. You’ll also need to confirm the transaction and pay the transaction fee.

After you’ve initiated the transaction, it will be added to the Ethereum network’s mempool, where it will wait for confirmation. This can take a few minutes or longer, depending on network congestion and the transaction fee you’ve paid.

Once the transaction is confirmed, the recipient’s wallet will reflect the new balance of ERC-20 tokens.


ERC-20 tokens and addresses are essential concepts to understand when dealing with Ethereum-based cryptocurrencies. By following this beginner’s guide, you should now have a good understanding of what ERC-20 tokens are, how they work, and how to use them.

While the world of cryptocurrency can be complex and daunting, taking the time to learn about these concepts can help you make more informed investment decisions and participate in the exciting world of blockchain technology.


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