You have to be clear about a few things to understand what it's all about. Let's get started:
Knowing how to tell a token from a cryptomoney is the first thing. Although they are different, they are closely related.
Crypto coins could be defined in a few words as digital money that has its own blockchain.

Tokens represent an asset or utility. They are transferable assets and can represent coins, loyalty points, assets in a game, etc. They can even be exchanged for the service that an issuer will provide at a later date. Tokens don't have their own blockchain.

This is a brief explanation. But do you know the difference between a coin and a token?

An ERC-20 token is simply a cryptomoney that is built on Ethereum, the smart contract platform that uses Ether as a token, the second largest cryptomoney in market capitalization.

ERC20 tokens can be built anytime, anywhere and for any reason you can possibly imagine. The vast majority of ICOs we see today use the Ethereum token standard to create their tokens.

What's an ERC-20 token?

Ethereum's protocol was not explicitly designed to create and record transfers of its own cryptomes. But this protocol is more widespread. Allows you to create other tokens'on top' of your blockchain. And these tokens are called ERC20 (ERC stands for Ethereum Request for Comments). Which is the most widely used standard today.

ERC20 tokens are smart contracts that run on Ethereum's blockchain and operate within the framework established by the Ethereum team. However, the framework is broad enough to allow developers considerable flexibility in the design and function of tokens.

What is the importance and benefits of the ERC20 standard?

The ERC-20 tokens are governed by a set of standard rules that allow interoperability within the Ethereum ecosystem, with the wide variety of tokens and other decentralized applications (DAPPs) compatible with each other.
These rules allow developers to create new technologies with a smaller margin of error, as they are aware of the necessary conditions for them to integrate and live together in the network.

To fully comply with the ERC-20 standards, the developer must incorporate a specific set of features into his or her smart contract that, at a high level, will allow the developer to perform the following actions:

Get the full supply of tokens
Get your account balance
Transfer the token

Approve spending the token

ERC20 enables perfect interaction with other smart contrats and decentralised applications in the Ethereum block chain. There are certain tokens that fulfill only some of the standard functions and are thus partially compatible with ERC-20 and which, depending on the functions they do not fulfill, can interact in the blockchain.

The creation of the ERC-20 token as a standard has brought numerous benefits to the ecosystem and to the development of new technologies, optimizing their incorporation and compatibility with the rest of the applications.

Some of the benefits are:

The technology unit and a standard protocol, making it easier for developers to work.
Less complexity in understanding each type of token implemented, since they will all be based on the same principles of functionality.

Greater liquidity of the ERC-20 tokens, as they are used in most of the ICOs and as a work base for the projects.
Less risk of breaking contracts, as there are no impediments or incompatibilities.

Do ERC-20 tokens influence the value of Ethereum?

Not in principle, no. The value of each individual token depends on a variety of factors described in the application code, such as the total supply of tokens, as well as external factors such as market demand for the token or speculation about its future value.

Just because these tokens live in Ethereum's blockchain does not mean that the value of the token is the same as that of the Ether. The value of the token is generally not linked to the value of the Ether.

Who can create ERC-20 tokens?

Anyone with a certain level of technical knowledge can create their own token. So both a team with a revolutionary project and a scammer looking to trick cryptoinvestors into finding easy money can perfectly well create theirs.

This is possible because both Ethereum and the ERC20 standard are open source, we are all free to use it. On the other hand, the necessary tools and resources are available to everyone.

The know-how required to create a token goes beyond the technical skills of Ethereum and its smart contracts. It is necessary to know the associated programming language called Solidity.

Being a young technology, the language is still largely unknown to the programming community, so very few people in the world can work with the standard anymore.

ICO

Tokens have become a common way of financing projects through ICOs. Over the past year there has been a boom in ICOs. And most of them are from ERC-20 tokens.

It is important to know that not all tokens are based on Ethereum and not all wallets are ERC20 compliant.

Wallets compatible with ERC-20 tokens

This point is important as most ICOs are ERC-20 tokens. If we send these tokens to an incompatible wallet we can lose them. So having a compatible wallet is indispensable.

There are many wallet alternatives that support this token.

One of the most recommended and that we have already commented on in another article is the hardware wallet. However, it is not the only alternative, there are free wallets available on the net.

Another of our articles that may be of interest to you are ways in which cryptoinvestors often lose their cryptom currencies and how to avoid the same thing from happening to us.

Below is a list of some of the ERC-20 tokens we have already discussed on this page:

Dragonchain
Pokens and PPT
WPR
Vision (NCASH)
Metal coin (MTL)
Tron (TRX)
QuarkChain (QKS)
0x (ZRX)
Metal coin (MTL)