With NFTs and airdrops becoming more and more popular, here's a beginner's guide to how these tokens work and where you store them.
In this guide, we will be focusing on ERC-20 tokens, the modalities involved in creating compatible wallet addresses and how to receive tokens on your ERC-20 wallet.
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What Is a Token?
Ethereum functions as an ecosystem that houses several blockchain applications. Think of it as an operating system enabling a customizable environment for app developers. The only difference is that Ethereum uses blockchain technology and promotes a high level of autonomy, security and immutability. Blockchains apps use smart contracts to automate functionalities and provide autonomy.
That said, these apps often issue tokens designed to offer additional features or privileges to users. In some cases, these tokens allow users to claim a share of the app’s revenue. Some are used to facilitate trades on Ethereum-based marketplaces. Depending on the design decisions of the developer, tokens do offer multiple use cases.
Another thing you need to know about tokens is that they are not held by accounts. Tokens exist in contracts, which function like decentralized databases that map tokens to the appropriate Ethereum address. Also, it is the token contract that governs and specifies the rules that apply to a given token. With this, developers set the name, symbol, divisibility and other important token identifiers.
Hence, the transfer of ownership of tokens only occurs when the current owner sends a request to the contract directing it to allocate part of the balance to another Ethereum wallet address. To register this transfer on the blockchain, the owner must pay a gas fee in ETH.
Now that you understand what a token is, what then are ERC-20 tokens?
What Is an ERC-20 Token?
Ethereum core developers concluded that it was not viable to promote a Wild Wild West ecosystem where developers can create different variants of tokens. Instead, they introduced token standards that govern programming on Ethereum and deliver high compatibility.
Considered the most popular token specification on the Ethereum blockchain, ERC-20 or Ethereum Request for Comments-20 was launched in 2015 and has since enabled the standards for creating digital assets that can interact seamlessly. In turn, wallets and other ERC-20 compatible services use this standard to enable their infrastructure to receive, store, exchange and send ERC-20 tokens.
How to Send ERC-20 Tokens
The first thing you need to know is that all Ethereum wallet addresses are compatible with ERC-20 tokens.While this is a given, it is the prerogative of your wallet provider to provide you with permission to access your ERC-20 token balance. In other words, some wallet providers do support Ethereum addresses, but might restrict you from seeing ERC-20 tokens associated with the address.
Sending ERC-20 tokens is as simple as entering or pasting the recipient's Ethereum wallet address. There are mainly two places you can send your ERC-20 tokens from: a wallet from your centralized exchange (Binance, Coinbase, etc) and a software wallet, also called hot wallet (Metamask, Trust Wallet, etc). A major consideration to look out for when sending ERC-20 tokens are gas fees. These are transaction fees that users pay to miners to have their transactions included in the blockchain. Peak hours where many users are transacting on the Ethereum blockchain will cause gas fees to inflate. Users can check recommended gas prices on sites like Eth Gas Station.
How to Receive an ERC-20 Token
Chances are you have found an interesting Ethereum project and you are looking to receive its native ERC-20 token. If this describes your current predicament, then you are in the right place.
It is advisable to research the compatibility of wallets beforehand. Ensure that your wallet does not only support ERC-20 tokens, but also lists the specific token you intend to receive, especially if you plan on receiving airdrops. In most cases, airdropped tokens are obscure digital assets that are yet to list on exchanges. If this is the case, it is unlikely that exchange wallet addresses would support such tokens.
When it comes to ERC-20 tokens, the recommended wallets are MyEtherWallet (MEW) and MetaMask. Whatever the ERC-20 token may be, you can be sure that they are accessible via these two wallets.
Before opening an account on either of these two ETH wallets, it is important to note that they are self custody wallets. Hence, they will store your private keys on your devices and expect you to write down and store your seed phrase. A seed phrase is a list of 12 random words that you are required to enter whenever you lose access to your wallet or forget your password.
It is simple and straightforward to create an account on MetaMask and MEW. However, for this guide, we will limit ourselves to the MetaMask option.
How to Create an Ethereum Address on Metamask
- Visit https://metamask.io/ and locate the extension that is compatible with your browser.
- Click and install the appropriate extension.
- Once downloaded and installed, click on the extension icon and follow the prompts to create and confirm your password.
- Next, accept the term of use and give the extension the go-ahead to reveal your seed phrase. It is advisable to store multiple copies of these secret words in secure locations. Once you have backed up your seed phrase, the account registration process is complete.
- To view your ETH or ERC-20 address, navigate and select the Deposit Ether Directly tab. Then click on View Accountto see and copy your address. You can now paste the Ethereum address on airdrop portals requesting an ERC-20 address to receive free tokens.
How to View ERC-20 Tokens on Metamask
So now that you have received airdropped ERC-20 tokens, how do you view them? This is quite straightforward as well, if you follow the following instructions.
- If you cannot find the token when you click the Assetstab, then you might need to add the token manually.
- Click the Add Token tab and selectCustom Token to expand the search.
- You are required to enter the token address at the appropriate field. More often than not, the Token Symbol and the Decimalfields autofill. If not, then you might need to find the token project’s documentation to access the details. You can search for the token contract address on Ethereum blockchain explorers like Etherscan or Ethplorer. Better still, you may request the token address directly from the sender. Be wary of airdrops that do not reveal token contract addresses.
- Once you have filled all the fields, click Nextand select Add Tokento confirm.
How to Receive and View NFT Tokens on Metamask
Due to the explosion of airdrops for ERC-721 standard tokens or what is commonly called non-fungible tokens (NFTs), we have decided to detail some of the processes involved in receiving and seeing them in your wallet.
First, you need to access your Ethereum wallet address as shown above. Once the transaction is confirmed, it is recommended to view the NFT on the mobile app version of MetaMask since collectibles are not visible on the web version for now.
If the NFT is not visible in the collectible section, then click Add Collectiblesand enter the collectible ID and Ethereum address in the appropriate field. Once this is done, the NFT should appear under the Collectibletab.
My Ether Wallet (MEW)
MEW is branded as Ethereum's original wallet – a free, easy-to-use, open-source platform that helps users interact with the Ethereum blockchain. On the platform, users can send and receive funds on the Ethereum blockchain, manage non-fungible tokens (NFTs), manage assets on other Ethereum compatible chains (Binance Smart Chain, Ethereum Classic, Polygon, etc) and interact with smart contracts. Users can also explore decentralized applications (DApps) or register a domain name for their Ethereum wallet.
Ethereum Transaction ID
Every transaction, or token transfer, on the Ethereum blockchain will have an associated transaction ID, also known as transaction hash or txhash. This acts as a reference number for both parties in the transaction. Users can look up the transaction using the ID on a block explorer – such as this from CoinMarketCap, or Etherscan. Two main factors will determine how long it takes for the transaction to go through – the network traffic and gas fee paid. You can check if your transaction successfully went through on the blockchain explorer. Learn more about how to use Etherscan here.
Conclusion
As you must have noticed, it is quite easy to set up an ERC-20 address and receive tokens. One thing you must however keep in mind is that transactions involving all ERC tokens require gas fees in ETH. Therefore, ensure that you have enough ETH to pay the fee before executing transactions.
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FAQs
In Exodus, you might have noticed that all your Ethereum and ERC20 tokens share the same receive address. Because Ethereum and ERC20 tokens are all stored on the Ethereum blockchain, they are stored at the same address.
How do I get all ERC20 tokens of an address? ›
How to get all ERC20 tokens owned by an address
- Prerequisites Before getting started, make sure you have the following ready:
- Step 1: Setup Moralis First register your Moralis account and get your Moralis API Key. ...
- Step 2: Get all ERC20 tokens owned by an address ...
- Step 3: Run the script ...
- API Reference ...
- Support
An ERC20 Address only starts with '0' and 'x'. For example: 0xbc6e. A TRC20 Address only begins with a capital 'T'. For example: T9zG21.
How do I create an ERC20 wallet address? ›
Create an ERC20 Token on Kaleido
- Step 1: Create a Kaleido account. If you haven't already, sign up for a Kaleido account here. ...
- Step 2: Create a blockchain network. To get started, create a blockchain network. ...
- Step 3: Create a Token pool. ...
- Step 4: ERC20 Transactions. ...
- Step 5: Transferring Tokens.
Send and receive tokens
You can now send and receive ERC20 tokens. Get started by sending your ERC20 tokens to the Ethereum account of your choice. The token accounts will only appear after the token transaction has been confirmed on the Ethereum blockchain.
Should I use ERC20 network for my wallet address to deposit Ethereum? ›
If your sending wallet gives you multiple network options to transfer funds, you should always select ERC-20. Any transfers made using the Binance Smart Chain (BSC) network (BEP-2/BEP-20) to a Coinsquare deposit address will not be received into your account, and your funds may be permanently lost.
How much does it cost to get an ERC20 token? ›
Considering the above stages, the total cost of creating an ERC20 token can range from $10,000 to $55,000, depending on the complexity of the project. At Taksh IT Solutions, we have a team of experienced blockchain developers who can help you create a customized ERC20 token that meets your business requirements.
Can you swap any ERC20 token? ›
No, you can only swap tokens that are native to the Ethereum network, such as ETH, ERC-20 tokens or NFTs. You can only swap "wrapped" forms of Bitcoin that live on Ethereum.
How much does it cost to transfer ERC20 token? ›
If you're sending ERC20 to your friend, you'll need around 65,000 gas (and 21000 for ETH) for the transaction at the moment. But if you want to seal the deal on Uniswap, your estimated gas limit would go up to 200,000. The gas limit refers to the maximum amount of gas users would use for a transaction.
Are ERC20 always stored in an Ethereum account? ›
Because ERC-20 tokens only exist on the Ethereum blockchain, you can safely use any Ethereum address provided by your Ledger Hardware wallet. As a consequence, ERC20 are always stored in an Ethereum account.
ERC-20 tokens function just like any other cryptos. They are transferable from one address to another, as long as it fulfills the requirements. They are fungible. That means all transaction histories are traceable even though each token's code is identical.
Is Coinbase an ERC20 address? ›
ERC20 is only available through Coinbase Wallet. Assets on Coinbase Wallet are not held by Coinbase.
What's the difference between an Ethereum wallet address and ERC20 wallet address? ›
Typically, the ERC20 wallet address is an Ethereum address. More so, all Ethereum addresses are compatible with storing ERC20. Also, all Ethereum wallets are actually connected to the Ethereum blockchain. Therefore, the ERC20 address will mean an address in the Ethereum platform.
Which wallets are ERC20? ›
List of ERC20 compatible wallets
- MetaMask – provides solid experience in browser.
- MyEtherWallet.
- Trust Wallet – one of the best mobile wallets.
- Coinbase Wallet – mobile wallet by a famous exchange.
- Custonomy - trustless MPC custody and security platform.
- Argent.
- Pillar – good wallet with a unique twist and its own token.
Anyone can create an Ethereum account for free with a specific type of app commonly known as a wallet. Wallets create and secure the keys that let you hold, send and receive crypto. You can also connect to projects on Ethereum that will let you trade NFTs, exchange tokens, access games, and much more.
Why is it so expensive to send ERC20 tokens? ›
The main reason for the high fees of Bitcoin miners is the organic market. Bitcoin BTC $29133.1 block size is 1MB,which means that miners can only confirm 1MB of exchange value for each square(like clockwork). This is why the excavator fees on ERC-20 are so high.
Can people do anything with your Ethereum address? ›
You can safely give out your Ethereum address to friends, family, and acquaintances. No one can steal your ethereum using just your Ethereum address. They'd need both your address and the private key to it.
Can I swap ERC20 to Ethereum? ›
ERC20 tokens require Ethereum (ETH) to pay for transactions on the Ethereum network. You can enable custom fees for ETH and ERC20 tokens. To send or swap an ERC20 token, use an ERC20 token or send an ETH NFT, you need some ETH in your Exodus wallet to pay for network transaction fees, also known as gas.
What is the safest Ethereum wallet? ›
Which is the safest Ethereum wallet? The safest Ethereum wallet is a hardware solution such as Ledger Nano X or Trezor Model T device. These devices store a user's private key offline and provide advanced security options such as extra passphrases and customized backup solutions.
What is the safest way to store ERC20 tokens? ›
The best way to keep your ERC20 tokens secure
Secure multiple assets, including all ERC20 coins using a Ledger hardware wallet. Your private keys, giving access to your assets, remain safe in a certified secure chip.
ERC20 tokens offer several benefits to both issuers and users:
- Interoperability: ERC20 tokens transfer is designed to be compatible with any Ethereum wallet or exchange, making it easy for users to manage and trade them.
- Standardization: ...
- Flexibility: ...
- Security: ...
- Global Reach: ...
- Liquidity: ...
- Lower Costs:
How to Avoid Ethereum Gas Fees
- Use DeFi Saver App.
- Optimize your Transaction Timings.
- Use DApps That Offer Discounts and Rebates.
- Utilize Gas Tokens.
- Accurate Calculation of Ethereum Gas Fees.
- Use a Layer-2 Blockchain.
Whether sending tokens, interacting with a contract, or sending ETH or ERC20 tokens on the Ethereum blockchain, there is a fee called 'gas' associated with every transaction.
How much is 50 ERC20 in usd? ›
ERC20 to US Dollar
| ERC20 | $ US Dollar |
|---|
| 50.00 | 0.4537 |
| 100.00 | 0.9073 |
| 250.00 | 2.27 |
| 500.00 | 4.54 |
4 more rowsYou can issue a token in less than 10 minutes, send it and make your very own awesome bounty campaigns and increase your profit drastically with minimal effort. After all, tokens are versatile little things that can be used in many cases — all you need is your own imagination and a Generator to help you!
How do I withdraw my ERC20 tokens? ›
Select Tether USDT ERC20 from the Withdrawal section of your PA. Choose the trading account you wish to withdraw from and the amount in USD, as well as your private wallet address; take care to provide this exact or funds may be lost and irrecoverable.
Can I send any ERC20 token to Coinbase? ›
You can use Coinbase Wallet to send and receive supported cryptocurrencies and digital assets such as ERC-20 tokens. Coinbase Wallet supports the following networks: Ethereum, Polygon, Bitcoin, Dogecoin, Litecoin, Stellar Lumens, Ripple, and Solana.
How much does it cost to start creating ERC20? ›
On average, the cost to create ERC20 token lies between $5000 to $10,000, depending on the type of token developed and business requirements.
How much is 1000 USDT ERC20 in dollars? ›
The conversion value for 1000 ERC20 to 9.074 USD.
How much is ERC20 in usd? ›
1 ERC20 is 0.010581 US Dollar.
So, you've converted 1 ERC20 to 0.010581 US Dollar.
2 Answers
- head over to Etherscan.io.
- find the token by searching for its address or name.
- double check with a trusted source that you got the right smart contract address, there are thousands of fake token contracts out there. ...
- In the Profile Summary on the right, click the contract address, then click the "contract" tab.
In most cases, ETH and ERC-20 withdrawals normally should take no longer than two hours to be processed.
How do you know if a token is ERC20? ›
A non-ERC20 will return a 'null' 0x hex response whereas an ERC20 will give you a 32byte uint, in this case 0 but if you provide an address in the data then it will give you the actual token balance for that address.
Can police trace Ethereum? ›
Investigators can trace transactions to cryptocurrency exchange locations or other “choke points” that require the user to sign up using their true identification. From this point, the law enforcement officer can get a warrant to force the exchange to divulge the real identity of the account owner.
What crypto is untraceable? ›
Is There an Untraceable Cryptocurrency? There are several cryptocurrencies that claim to be completely anonymous and untraceable, such as Monero, Zcash and Bytecoin.
How do I transfer ETH without being traced? ›
How To Send Ethereum Anonymously
- Use/Create a web3 wallet.
- Mask your IP address.
- Use Tornado Cash to send ETH anonymously.
Shiba Inu's primary token is SHIB, an ERC-20 token with a fixed supply of one quadrillion tokens.
How do I transfer ERC-20 from Coinbase wallet? ›
Sending crypto from the Coinbase Wallet app
- Open the. Coinbase Wallet app.
- Tap Send.
- Select the asset and amount you'd like to send.
- Tap Next.
- Enter the exact address, ENS or username of the recipient you would like to send the funds to. ...
- Review and confirm the transaction.
Today there are more than 450,000 ERC-20 tokens on Ethereum including Tether (USDT), Binance USD (BUSD), Polygon (MATIC) and Shiba Inu Coin (SHIB).
What happens if you send Bitcoin to an Ethereum address? ›
No, you cannot send Bitcoin to an Ethereum wallet, or Ether to a Bitcoin wallet. Most wallets will flag you if you try to send Bitcoin directly to an Ethereum wallet, or Ether directly to a Bitcoin wallet. Bitcoin sent to Ethereum wallets generally get lost and cannot be recovered.
Non-compatible Wallets
The following wallets are not compatible with Ethereum tokens (ERC-20 standard): Any Bitcoin exchange. Any Ethereum exchange. Jaxx.
What are examples of ERC20 tokens? ›
Investopedia does not include all offers available in the marketplace.
- Tether USD (USDT)
- USD Coin (USDC)
- Shiba Inu (SHIB)
- Binance USD (BUSD)
- BNB (BNB)
- DAI Stablecoin (DAI)
- HEX (HEX)
- Bitfinex LEO (LEO)
In Exodus, you might have noticed that all your Ethereum and ERC20 tokens share the same receive address. Because Ethereum and ERC20 tokens are all stored on the Ethereum blockchain, they are stored at the same address.
Are ERC20 tokens only on Ethereum? ›
ERC20 tokens are a form of token that can be issued on Ethereum (and only Ethereum) that also represent a set of standards that cryptocurrencies can adhere to.
What is the cheapest way to get Ethereum into a wallet? ›
Buy Ethereum Through DeFi Exchanges
Decentralized finance, or DeFi, is an anonymous, cheap, and fast way to purchase Ethereum. It's not always beginner friendly, but the learning curve is often worth it, and DeFi is the trading method of choice for many pros.
Is there a gas fee for sending ETH to a wallet? ›
Ethereum Gas Fees Explained. In order to send and receive crypto on most blockchains, you must pay a transaction fee. This transaction fee can vary widely (from less than USD 0.0001 to over USD 100) and depends on the blockchain you're using and its current demand for block space.
How do you make an Ethereum wallet from scratch? ›
How do I create an mobile ether wallet?
- Go to the app store (iOS) or to Google Play (Android).
- Search and download Coinomi.
- Open the app and write down your recovery sentence of 24 words. ...
- Set a strong password.
- Add ethereum to your wallet.
- Use your receiving address to receive ether.
If you sent funds to the wrong address, you'll need to contact the receiving party and ask for their cooperation in returning the funds. If you do not know the owner of the address, there are no possible actions you can take to retrieve the funds.
Are all Ethereum addresses the same? ›
Each Ethereum account has its own receiving address which is a unique sequence of numbers and letters. The address functions like a bank account number. Ethereum addresses will always start with “0x”. You can share this address with anyone: it is safe to do so.
Can you send all ERC20 tokens to an Ethereum address? ›
Yes, it is possible to send ERC20 tokens to an ETH (Ethereum) address. ERC20 tokens are a type of cryptocurrency that are built on the Ethereum platform and follow a standard set of rules and protocols.
An ERC20 wallet address is a unique string of characters that is used to identify and interact with an Ethereum-based ERC20 token. It is a 42-character long alphanumeric address that starts with the prefix “0x”, just like the 0xmetashool handles!
What happens to ERC20 tokens if Ethereum fails? ›
They will become invalid and unusable. 95% of ICOs is built on ERC20 and ethereum blockchain. Unless there will be another blockchain that will enable all the tokens to run on these token will become worthless. And yes, more than half of the $37 billion of ETH value depends on ICOs.
What happens if I accidentally sent tokens to contract address? ›
What if I sent tokens to a contract address? Unfortunately, there is no guarantee anyone can retrieve your tokens if you sent them to a contract address. A contract address is not a repository of tokens; it is essentially a computer program, a set of code, that performs some function on the blockchain.
Can you use the same Ethereum address twice? ›
For other crypto assets (Ethereum, XRP, Stellar, etc.) the address stays the same. Bitcoin transactions are public information. Addresses should not be re-used for better privacy.
How do I send multiple ERC20 tokens in one transaction? ›
Bulk Token Sender is a simple and intuitive application that allows users to send multiple ERC20 tokens in one transaction. To get started, you just need to connect your Ethereum wallet to the Bulk Token Sender. Once your wallet is connected, you can select the tokens you want to send and the recipients of the tokens.
Can you send ERC20 without ETH? ›
TLDR: Not possible, unless the token contract explicitly allows it. Or unless the token holder is also the block producer. Transaction fees are paid in ETH (or generally, native currency of the network - for example BNB on Binance Smart Chain, MATIC on Polygon, ...).
How much does it cost to create ERC20 token? ›
Cost to Create ERC20 Tokens – An Estimation!
On average, the cost to create ERC20 token lies between $5000 to $10,000, depending on the type of token developed and business requirements.
Is Coinbase an ERC20? ›
You can use Coinbase Wallet to send and receive supported cryptocurrencies and digital assets such as ERC-20 tokens. Coinbase Wallet supports the following networks: Ethereum, Polygon, Bitcoin, Dogecoin, Litecoin, Stellar Lumens, Ripple, and Solana.
