While cryptographic technology advances, we often hear new terminologies and definitions when understanding meanings of digital assets such as AltCoins and ERC-20 Tokens’ differences. This could get confusing at some point. But don’t worry, we got you covered!
First, let’s begin by defining Altcoins:
Altcoins – Explained
An altcoin usually refers to alternative coins to Bitcoin; in other words, any coin that is released after Bitcoin.
Generally, Altcoins present themselves as a better alternative to Bitcoin. But does that mean that they are actually better alternatives to Bitcoin?
To answer this question: it all depends on what the project owners present to you as a user.
Some Altcoins offer some benefits depending on the blockchain they operate with, take, for example, the most significant alternative coin to Bitcoin, Bitcoin Cash.
Bitcoin cash, for example, can process transactions quicker than Bitcoin, which means that it gives you shorter waiting times to process transactions between you and another peer on the network.
But of course, the difference still lies under popularity and trust, making the original version of Bitcoin (BTC) more popular and trustworthy to traders.
ERC-20 tokens – Explained
ERC Tokens are the standard protocol for issuing tokens on the Ethereum network.
ERC refers to “Etherum Request for Comments.”
ERC-20 crypto tokens are purely based on the Ethereum blockchain, but they differ from the native Etheruem (ETH) currency.
The primary difference is that instead of each token running independently on its own blockchain, ERC-20 tokens are issued on the Ethereum network.
Can I refer to ERC-20 tokens as Altcoins?
Technically, if Altcoins are defined as all currencies that came out after Bitcoin, then the definition of ERC-20 tokens lies under Altcoins’ umbrella since ERC-20 tokens are also considered as alternative cryptocurrencies.
However, some other opinions say that Altcoins mainly refer to coins that are independently running on their own blockchain.