ERC-20 is a standard interface for tokens, which means ERC-20 tokens are a subset of Ethereum tokens.
Over the last few years the process of creating tokens that work on the Ethereum network has changed, yielding with the creation of the “ERC-20 Standard.”
The ERC-20 Standard outlines a set of rules that tokens follow on the Ethereum network, to produce expected results. When a developer incorporates a specific set of functions into their smart contracts the token becomes ERC-20 compliant, which allows it to perform the following actions:
- Token total supply
- Account balance
- Token transfers
- Approvement of token spendng
Ever since these easy-to-follow ERC-20 standards have been in place, there has been a huge increase of tokens in the cryptocurrency space. This is why an ERC-20 token will only work on the Ethereum platform.
