“Decentralized finances (defi) and cryptocurrency (cryptography) explained: Guide to ERC-20 marker”
In recent years, the financial world has undergone a significant transformation, partly due to the growth of decentralized technologies. One of the areas that have gained tremendous popularity is blockchain -based applications, especially those formed above cryptocurrency and defi protocols. In this article, we will go into the basis of crypto, gas, defi and ERC-20 tokens, providing an overview of their importance and use.
What is cryptocurrency?
Cryptocurrency is a digital or virtual currency that uses cryptography for security purposes and is decentralized, which means that it is not controlled by any government or financial institution. The most well -known cryptocurrency is Bitcoin (BTC), but other popular options are Ethereum (ETH) and Litecoin (LTC). Each cryptocurrency has its own unique properties, cases and benefits.
What is Defi?
Defi denotes decentralized finances. This applies to a financial service system that works with blockchain technology, providing access to traditional banking services without the need for intermediaries. Defi protocols allow users to lend, borrow, invest and market assets more efficiently and safely.
ERC-20 marker
The ERC-20 standard is the open source marker standard created by Ethereum Labs (Ethereum). This allows developers to create and deploy their blockchain applications using an Ethereum framework. ERC-20 markers are used as exchange, value storage carriers, and can be marketed on different stock exchanges.
How does ERC-20 work?
The ERC-20 tokens are designed on the Ethereum network and act on a number of basic principles:
1
Tokenomics
: The total delivery of the ERC-20 marker is limited to 100 million.
- Smart Agreement : The ERC-20 standard requires smart contracts to manage the creation, transfer and trade of tokens.
3
Decentralized Exchange (DEX) : ERC-20 markers can be exchanged with decentralized stock exchanges such as Uniswap or Sushiswap.
Gas
Gas is the measurement unit of calculation efforts needed to carry out the transaction on the blockchain network. This is essentially a measure of how much time and resources are needed to approve transactions. Higher gas prices indicate more complex transactions that can lead to slower transaction processing.
How does gas work?
Here is an example of how gas works in practice:
1
Development of the transaction : The user wants to transfer ERC-20 tokens from one wallet to another.
- Gas cost calculation : Blockchain network calculates gas costs based on the complexity of the transaction (eg number of transactions, data size).
3
Gas Payment : The user pays the network calculated gas fee to confirm the transaction.
Conclusion
Cryptocurrency, Defi and ERC-20 tokens have changed the financial world by offering a more secure, more transparent and more efficient way of doing business. Understanding these concepts is essential for anyone who wants to dive into a blockchain -based application in the world. As the Defi ecosystem continues to grow, it is important to keep track of the latest events and technologies that make up this space.
Additional resources:
- Ethereum.org (Ethereum site)
- CoinMarketcap (Coin Market Data Platform)
- Decentralized Finance (Defi) White Paper
- ERC-20 marker documentation
Note: This article is a simplified explanation of complex topics. If you are a new blockchain and cryptocurrency, it is important to educate yourself carefully before diving into these areas.
