ERC Protocol stands for Ethereum Request for Comment while TRC stands for Tron Request for Comment.
For anyone interested in getting into the cryptocurrency world, two terms that call for proper understanding are blockchain and smart contracts. Understanding these two and their most popular forms will help one navigate the waters and make informed decisions.
For starters, blockchain is, in simple terms, a type of database where encrypted data is stored in blocks, and when one block fills up, it is chained to the previous block in chronological order. It has a decentralized structure, and the blocks are distributed across multiple computers on the network; thus, everyone has access to the information simultaneously.
This aspect means no participant can change the record on the data. In case of an error, the parties agree to create a new transaction, and both records are available for everyone. The characteristics of a blockchain make it function as a digital ledger of immutable and shared transactions.
Central to how blockchains work is smart contracts. These are self-executing contracts with the terms of an agreement between different parties written in code. Smart contracts are automated and control the transactions based on the agreements.
Once the parties meet the agreement/conditions of the contract, the transaction goes through automatically, thus eliminating the need for third parties and extra costs. Some of the popular examples of smart contracts are ERC 20 and TRC 20. They perform similar functions, and each has its strengths, and both are some of the widely adopted standards in the cryptocurrency world.
What is ERC 20?
ERC stands for Ethereum Request for Comment, which is essentially a concept of communicating various technical requirements to developers and users on the Ethereum platform. Ethereum is one of the most popular blockchains globally, and it is dependent on the use of tokens, which are smart contracts that can be traded, sold, and bought.
ERC 20 has emerged and is accepted as the technical standard for all tokens on the Ethereum blockchain. It defines a specific set of guidelines/rules that any new token/smart contract on the blockchain must follow. The rules address issues such as the transfer of the tokens, the total supply of the tokens, how transactions are approved, and how people can access data about a particular token.
The need for ERC 20 is to have a uniform performance of all tokens within the Ethereum environment. Thus, developers on the blockchain do not have to worry about redoing projects with every new release of a token. They can predict how each token will function. It also helps provide compatibility of the various tokens and on all wallets that accept Ether.
What is TRC 20?
TRC 20 is to Tron what ERC 20 is to Ethereum. This means that the Tron is another public blockchain, and TRC 20 is the technical standard of all smart contracts or tokens on the Tron blockchain. Tron is a public blockchain based on the Tron Protocol issued by the Tron Foundation.
In some fundamental ways, Tron is similar to Ethereum in that it also uses a virtual machine as the operating system for managing its smart contracts, just as Ethereum does. More crucially, the two virtual machines share the same programming language, Solidity. Thus, tokens on both platforms are compatible by design as the Tron foundation wanted to make it easy for developers to move their projects to Tron.
The main difference is their consensus model, which is the means through which blockchains process and conclude transactions. A consensus model also maintains consistency in the blockchain and its liveliness by ensuring all nodes deliver value. It also determines the fault tolerance of the blockchain. While Ethereum uses a Proof of Work Consensus (PoW) model, Tron uses a Delegated Proof of Stake (DPoS) Model.
Deposit USDT in BingX ERC 20 or TRC 20
BingX is a trading platform for digital asset derivatives like tokens and other cryptocurrencies dependent on other blockchains. One such derivative is USDT, a cryptocurrency based on the Bitcoin Protocol and released through Protocol Omni. USDT value and exchange rate is tethered to the value of the US dollar.
On many platforms like BingX, trading on USDT is possible through ERC 20 and TRC 20 tokens. TRC 20 offers several advantages because of its DPoS model. It uses less electricity and has a higher transactions-per-second rate resulting in faster transactions and lower fees. On Ethereum's PoW, the TPS rate is low, and the gas fees are high, which transfers to your exchange costs.
Thus, while you will only need 1 USDT when making a USDT-TRC 20 deposit on BingX, you are going to need 20 USDT per transaction when making a USDT-ERC 20 transaction. Learning such differences and the characteristics of various digital assets will help traders know which assets and platforms to use when trading and building their portfolios.
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