The Litecoin token has existed for just about as long as Ethereum. Both Litecoin and Ethereum have similar features and uses, including consensus mechanisms. But, is Litecoin an ERC20 Token?
In fact, what is an ERC20 token? Here, we answer that question and more.
Is Litecoin An ERC20 Token?
Litecoin is not an ERC-20 token.
Litecoin doesn’t follow the ERC-20 token standard. It is not part of the Ethereum chain or ecosystem.
Litecoin is a layer 1 blockchain that runs on its own blockchain.
What Is ERC20?
ERC stands for Ethereum Request for Comment. ERC-20 is an Ethereum standard that developers must adhere to as they develop and issue smart contracts on the Ethereum Network.
This standard was drafted in November 2015 by Fabian Vogelsteller and enforced in 2015. ERC-20 tokens depend on the Ethereum ecosystem and don’t work outside of it.
ERC-20 smart contracts are essential for many applications on the Ethereum network, including tokenized and digital assets you can invest in.
Keep in mind that there’s a difference between ETH (Ethereum’s native token) and ERC-20 tokens.
Here are the uses of the ERC-20 token:
- It helps ascertain if a third-party account can use the tokens received from another account.
- It lets users move tokens between accounts on a network.
- It allows users to know the balance of coin supply on the network.
- It provides the current token balance.
Learn more about the differences between Ethereum and Litecoin in our guide: Does Litecoin Run On Ethereum?
How Can You Tell If A Coin Is ERC20?
ERC-20 tokens are Ethereum-based tokens. These tokens share some similarities that make them interchangeable.
Let’s look at their features.
Mintable or Burnable
Mintable tokens allow you to add tokens into circulation. Mintable tokens don’t have a fixed supply, but only elected addresses can participate in minting coins.
Burnable tokens, on the other hand, allow the destruction of tokens to control excess supply. Usually, only authorized addresses can initiate the burning process.
Have an Interface
All ERC20 tokens have a user-friendly interface for their participants. The token provides users with a report on the number of tokens contained in a single address.
As an investor, you can manage your crypto investments and check on the balances in your wallets or addresses.
Also, users can find information on upgrades and news and visit the ledger to look at the transactions.
All ERC20 tokens can initiate and control transfers on their own. Although built on the Ethereum blockchain, all ERC20 tokens can manage their network by allowing participants to buy, hold or sell tokens to other users among themselves.
All the ERC-20 are interoperable. Interoperability allows for cross-chain communications. These tokens communicate with each other to transfer data and assets or collaborate to improve the technology and the networks.
Every ERC20 token has a unique value proposition for its users. ERC20 tokens are crucial for creating decentralized applications and services in the cryptocurrency ecosystem. These dApps act as a bridge between blockchain technology and the real world.
What Is Litecoin Backed By?
Litecoin has no backing from any other asset, except its community of users and miners.
Unlike most cryptocurrencies which link to assets for stability, Litecoin depends on its litecoin network and the participants to keep it active and secure.
Also, Litecoin gets its backing from its decentralized public ledger, which helps maintain a stable and safe blockchain transaction.
Which Are ERC20 Tokens?
As stated above, these are tokens that thrive on the Ethereum blockchain. Today, there are more than 500,000 ERC-20 tokens. Let’s take a look at some of them.
ApeCoin is a common NFT token for governance and utility.
Wrapped Bitcoin (WBTC)
It’s an ERC-20 token pegged on Bitcoin on a 1:1 ratio. It provides liquidity for DeFi apps.
Aave is decentralized finance (DeFi), offering lending services.
Uniswap offers decentralized exchange services and has a native token for the governance of the token.
MANA is the ERC-20 token behind metaverse exploration.
What Are ERC20 Alternatives
There are many alternatives to the ERC-20 tokens. Here are the other ERC token standards:
As an upgrade of the ERC-20 token, the ERC-777 provides the first emergency recovery option and gives better utility in terms of minting and burning tokens.
Created in November 2017, the ERC-777 token standard has better privacy solutions for transactions. The authors were Jacques Dafflon, Jordi Baylina, and Thomas Shababi.
The ERC-777 comes in with improved Decimals issues experienced in the ERC-20, tremendously improving interaction. Also, with ERC-777, you can enjoy backward compatibility. It means you get a similar experience to contracts developed under ERC-20.
Also known as the multi-token standard, ERC-1155 provides a platform to build smart contracts that manage numerous types of tokens. This token standard allows developers to create contracts that handle fungible and non-fungible tokens.
Authored in June 2018, the ERC1155 is better at the functionality and making amends for errors that may occur in ERC20 and ERC721.
Here are some of the functions and features of the ERC-1155:
- The standard offers great secure transfers within the protocols.
- It supports creativity around NFTs.
- Any token sent to an address must get approval.
- Users can check their account status with a single click
- You can send and receive various digital assets with ease.
The authors of the ERC-1155 rules were; Witek Radomski, Andrew Cooke, and Phillipe Castonguay.
ERC-721 is the set of rules for non-fungible tokens (NFTs). You can use the ERC-721 token for programs that run lottery tickets, sell collectible items, and offer numbered seats for a sports event.
Drafted by William Entriken, Dieter Shirley, Nastassia Sachs, and Jacobs Evans, the NFT standard is responsible for several use cases:
- You can move tokens between accounts by using a third-party account.
- You can set up APIs for tokens in a smart contract on the Ethereum network.
- You can control and manage your account balance.
- You can check the total number of coins in supply and choose specific tokens.
Examples of NFTs on the ERC-721 token standard include:
- Bored Ape Yacht Club
- Etherscan NFT Tracker
Litecoin is not an ERC20 token, since its a different blockchain outside of Ethereum. ERC20 standards are for only for Ethereum-based smart contracts.