The Bitcoin might be the de facto standard for transactions when it comes to cryptocurrencies and the crypto world in general. However, when it comes to creating your own token or smart contracts, the undisputed winner is Ethereum.
Ethereum is generally governed by a protocol or standard called ERC-20 which helps in the creation of smart contracts and new tokens that will enable launching your own ICO. Although it cannot be forgotten that marketing an ICO plays an important role in its success and creating utility token on Ethereum is equally vital as well.
Creating an Ethereum token
The first thing that needs to be done when creating an Ethereum token is to finalize on the specifications of the token. It is also essential to determine the functionalities and capabilities that Ethereum provides for this purpose.
What makes Ethereum tokens distinct is their inability to mine them. While the Bitcoin can be mined, Ethereum tokens essentially require buying and transferring.
Ethereum Smart Contracts
One of the most prominent things that make Ethereum preferred blockchain for creation of tokens is the way in which it can handle smart contracts. Smart contracts are self-executing programs that enable a function to be fulfilled only when certain conditions are met. Smart contracts eliminate the need for intermediaries and the costs involved and also increases the magnitude of trust and security on the blockchain.
Smart contracts are built using different languages and many experts compare it with the programming experience of the early 1990s when the internet was just beginning to evolve.
Programming Your Token
There are four different languages that can be used to create your own Ethereum token.
- Mutan is similar to Go and has received intense criticism from the crypto community.
- LLL is Lisp-like language and although considered a good language for programming, it does not find widespread application owing to its complexity.
- The serpent, a Python-like language has all the credentials to make it one of the go-to choices for Ethereum token programmers – the popularity of Python and its uses in web development, IoT development, and application development. However, the creators of Ethereum have not recommended the use of Serpent.
Ethereum Token Standards
A token that is created on Ethereum has to comply with certain standards and requirements. The set of standards called the Ethereum Request for Comment, commonly abbreviated ERC govern the Ethereum token, the smart contracts and everything involved with the blockchain. There are different standards that fall under the ERC category.
Testing is a vital stage when it comes to Ethereum tokens. The usual test functionality might not be available because actions always occur with a transaction involved. However, with the availability of two different blockchains – testnet and mainnet, the former blockchain can be used for testing purposes and the latter as the main Ethereum blockchain.
ERC-20 is probably the most common standard right now, and it mandates that you will need to have parameters like the token name, the supply that is available for circulation, and the ability to get wallet balance. It also should specify the functionality of token transfer between wallets.
ERC 223 is quite similar in many ways to ERC-20. However, the biggest exception is the functionality of the return of funds. This feature helps take care of issues like incautious money transfer and incompatibility with other wallets.
ERC 621 is a standard that will appeal to financial managers. This standard facilitates the issue and supply of additional tokens and also takes care to decrease the tokens. There might be instances when the market has been underestimated and a release of another new set of tokens is possible. While it might not be possible with the earlier standards, ERC 621 can take care of this.
In addition to these, there are also standards like ERC 721 which is unique and non-replaceable when it comes to token elements and ERC 827 that provides access to the transfer of tokens on behalf of an external service.
Which Token Standard to Choose
It is quite difficult to choose one when you are spoilt for choices! However, with the business and the investors in mind, companies like Blockchain App Factory can not only help you choose the best token standard for you but also help you in creating the perfect Ethereum token for your business! The services of Blockchain App Factory expand beyond just the creation and also foray into the territory of marketing your ICO!