If you use cryptocurrencies, you are familiar with these abbreviations with numbers. You might also know that it can tell you which network a token belongs to, which is extremely important. After all, the stakes are high: mess it up and you lose your crypto! But don’t panic. In this guide, we explain this basic tenet of using crypto and also help you decide which network to choose.
Coins and tokens
Crypto tokens are digital assets that are created and managed using blockchain technology. They are often used as a form of currency or as a representation of assets or utilities within a specific blockchain ecosystem. Crypto tokens are created using smart contracts, which are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. These smart contracts are then deployed onto a blockchain, where they can be accessed and used by anyone who has the appropriate permissions.
Tokens are often opposed to coins. The difference in terms is grounded in what issues the digital currency. If it is the protocol, it is a coin. If it is a smart contract, it is a token. Bitcoins are issued by the protocol, and so is ether. However, tokens on Ethereum such as tethers (USDT) are issued by a smart contract, in this case residing at the address 0xdac17f958d2ee523a2206206994597c13d831ec7.
What is a Token Standard?
The three letters with numbers that often go with the name of the token are colloquially known as a token standard. It started with Ethereum but other blockchain networks adopted similar naming schemes.
ERC stands for “Ethereum Request for Comments”. It is a technical standard used for Ethereum-based tokens. ERC was originally used to refer to a set of guidelines and recommendations for the Ethereum platform, proposed by the developers in the form of an “Ethereum Improvement Proposal” (EIP).
However, the term ERC has since been more commonly used to refer specifically to the token standards that have been developed using these guidelines. In other words, ERC-20 tokens use the guidelines outlined by the ERC-20 standard. These standards define the rules and requirements for creating tokens on Ethereum, including how they can be transferred, their total supply, and other important details. By following these standards, developers can ensure that their tokens are compatible with Ethereum and can be easily integrated with other Ethereum-based applications.
Types of Token Standards
The most commonly used ETH token standards are:
- ERC-20 — transferable, interchangeable (fungible), can serve as utility and security tokens. For example, USDT uses this standard.
- ERC-721 — Ethereum’s standard of non-fungible tokens (NFTs). They are non-interchangeable and can be thought of as unique objects;
- ERC-1155 — can be both fungible and non-fungible. An example use case is blockchain game assets.
Ethereum Virtual Machine-compatible blockchains usually have a similar naming scheme for their token standards.
- BEP is a token on BNB Chain (previously Binance Smart Chain)
- TRC is on the TRON network
- KIP is a standard in the Klaytn network
- MRC means the token is on the Moonriver network
Other blockchains have different labeling for the tokens on their network. Regardless, they are marked accordingly because it’s that important to not mix them up.
Difference between ERC-20 and TRC-20
So, now you see that ERC-20 is based on the Ethereum network while the TRC-20 means the tokens are part of the TRON network. These tokens reside on different blockchain networks, you cannot send them across those networks directly. To do so, you would need to use a bridge or swap those.
You should also pay attention if the address provided for the deposit transaction is hosting a contract. It can be the correct address but only if the provider supports it. Just like your crypto gets lost forever if you send it to the wrong address, not any wallet or platform can retrieve your funds if you send it to a contract address.
Given the option between using TRC-20 vs ERC-20, provided you have a choice (for example, you are buying USDT), consider these things.
Network fees on TRON are cheaper
The network fee on Ethereum is generally higher than those on the TRON network. This is because Ethereum is more congested and has a higher number of transactions being processed at any given time. As a result, users often have to pay higher fees to ensure that their transactions are processed quickly.
On the other hand, the TRON network has lower transaction fees due to its higher scalability and throughput. This makes it a more cost-effective option for users who want to transact frequently or on a smaller scale.
Transaction speed on TRON is higher
The speed of transactions on the TRON network is generally faster than that of the Ethereum network. This is because TRON diverged in design from Ethereum and implemented its own scalability mechanisms. Not to mention, it is just not as busy as ETH.
In contrast, Ethereum can sometimes experience delays due to congestion and the limitations of its current infrastructure. While there are ongoing efforts to improve the speed of Ethereum, it is still generally slower than TRON.
Liquidity on Ethereum is better
In terms of liquidity, both Ethereum and TRON have a high level of support from exchanges and a large user base. Ethereum has been around longer and has a larger market cap, which has led to a greater level of adoption and liquidity for ERC-20 tokens.
However, TRON has also gained significant traction in the crypto space and has a growing number of users and exchanges that support its TRC-20 tokens. Additionally, TRON’s lower transaction fees and faster processing times make it a more attractive option for users who want to transact frequently or on a smaller scale.
Security of Ethereum is stronger
In terms of security, both Ethereum and TRON have experienced some vulnerabilities and hacks in the past. However, Ethereum has a long track record and has been battle-tested by various attacks and exploits, which has led to more robust security infrastructure and greater community support. Its higher network fees involved also make sure more validators are securing the blockchain.
TRON, on the other hand, has not yet faced as many security challenges. While it has implemented various security measures and protocols, it remains to be seen how it will hold up in the face of more sophisticated attacks.
How to Convert TRC-20 Tokens to ERC-20 and vice versa?
To convert ERC-20 tokens to TRC-20 tokens, you will need to use a bridge or swap service that supports both Ethereum and TRON networks. Here are the general steps to follow:
- Choose a bridge or swap service that supports the conversion of ERC-20 tokens to TRC-20 tokens. Some popular options include JustSwap, Uniswap, Bridge Oracle, and, of course, ChangeHero.
- Connect your Ethereum wallet to the bridge or swap service. This will usually involve connecting your wallet using a provider like MetaMask.
- Select the token you want to convert and enter the amount you wish to convert.
- Confirm the transaction and wait for the conversion to complete. This may take a few minutes to several hours, depending on the bridge or swap service you are using. When using ChangeHero, swapping USDT across these networks usually takes 1 to 5 minutes!
- Once the conversion is complete, you should receive the equivalent amount of tokens in your destination wallet.
It’s important to note that there may be fees associated with using a bridge or swap service, and the exchange rate and trading fees may vary depending on market conditions. Make sure to do your research and choose a reputable service with transparent fees and a good track record of security. Here is your friendly reminder that ChangeHero has been working since 2018, and our service commission that covers the network fee is just 0.5% per swap.
A few more frequently asked questions
Can I transfer TRC-20 to the ERC-20 wallet?
The two blockchain networks are different and incompatible with each other. Therefore, you cannot directly transfer TRC-20 tokens to an Ethereum wallet or account or vice versa. To do so, you can use a bridge or an exchange that supports both networks but they may charge fees.
How do I know if my USDT is ERC-20 or TRC-20?
ERC-20 USDT and TRC-20 USDT are two different versions of Tether stablecoin that run on different blockchains (Ethereum and TRON, respectively). Their contract addresses have different formats, and you can tell them apart by checking the contract address of the USDT token in your wallet. If the contract address starts with “0xdac17f”, it is an ERC-20 USDT token. If it starts with “TR7NHqj”, it is a TRC-20 USDT token.
What will happen if I send USDT ERC-20 coins to a USDT TRC-20 address?
You won’t be able to due to the difference in address styles or formats. However, this can be an issue if you manage to send USDT to another network that has the same “0x” address format. If you’re lucky, it would not be an existing crypto wallet and the transaction will fail. But if it goes through, it is irreversible, and you risk losing your assets completely. Always double-check to make sure you’re sending and receiving with the correct wallet address.
Conclusion
The difference between coins and tokens or the types of tokens or the networks is ultimately something anyone into crypto has to know. We hope this article helped you sort them out — there is nothing wrong with learning, but it’s wrong to stay uninformed.
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