In light of today’s ICO launches, digital token sales during which companies and organizations raise millions of dollars instantly while giving out digital assets, it’s important to recognize the underlying technology that nearly all of these tokens possess: ERC20.
Ethereum Request for Comments 20, or ERC20, is an Ethereum Improvement Proposal introduced by Fabian Vogelsteller in late 2015. It’s a standard by which many popular Ethereum smart contracts abide. It effectively allows smart contracts to act very similarly to a conventional cryptocurrency like Bitcoin, or Ethereum itself. In saying this, a token hosted on the Ethereum blockchain can be sent, received, checked of its total supply, and checked for the amount that is available on an individual address. This is analogous to sending and receiving Ether or Bitcoin from a wallet, knowing the total amount of coins in circulation, and knowing a particular wallet’s balance of a coin. A smart contract that follows this standard is called an ERC20 token...
https://dev.to/aunyks/the-anatomy-of-erc20-bfg