Create ERC-20 tokens — How it works

10 min readJun 9, 2021
Photo by Execution on Unsplash

The Ethereum blockchain is best known for its ability to support smart contracts. This makes it possible to use more than just one cryptocurrency on the blockchain, as is the case with Bitcoin, for example. Developers, entrepreneurs, and organizations can also use the Ethereum blockchain to provide their own use cases, payment methods, cryptocurrencies, or apps in the blockchain.

In most cases, the basis for the use cases are tokens. These are objects in the blockchain that can be exchanged, traded, and also sold. Tokens can also be created themselves and used for their own purposes.

Tokens and cryptocurrencies in Ethereum

The cryptocurrency Ether (ETH) is also a well-known token in the Ethereum blockchain. There are other tokens in Ethereum that are also used as cryptocurrencies. Examples of these are shown in the Etherscan token tracker ( These are not tokens or cryptocurrencies integrated into Ethereum by default.

The focus of Ethereum is not on processing financial transactions via a cryptocurrency, as is the case with Bitcoin, for example. Ethereum primarily enables the execution of decentralized apps (dApps) and smart contracts within the blockchain. Therefore, program code is the central focus of Ethereum, which allows it to be used in enterprise networks to use smart contracts and distributed apps.

Simply put, smart contracts are also just small programs running on the Ethereum network. Tokens, in turn, are created via smart contracts. Anyone who wants to get to grips with the topic of tokens in Ethereum should, therefore also, if possible, get to grips with smart contracts and their development using the Solidity programming language.

Using the cryptocurrency Ether to pay for transactions

The cryptocurrency Ether (ETH) is created in the Ethereum blockchain by mining, similar to Bitcoin in the Bitcoin network. Ether is also often used to pay for…


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