Tether ERC-20 and TRC-20: What are they and what's the difference

The world of digital assets is far from simple. People interested in the crypto market don’t always possess the necessary knowledge. Even investors with some experience in this field don’t always have a good understanding of cryptography. The lack of basic technical knowledge can lead to capital loss, so it’s important to study the key aspects of the crypto industry. The most significant topics that a beginner should familiarise themselves with first are blockchain technology and the concept of token standards. We suggest exploring this concept using the example of the stablecoin Tether (USDT).

A Simple Explanation of Token Standards

A token standard contains a set of rules that govern digital currencies. In other words, a token standard defines the mechanism for creating, issuing, and deploying new tokens on a specific blockchain. Each standard’s rules must be followed by a specific smart contract to perform certain tasks.

What is Tether

Tether (USDT) is a stablecoin aimed at protecting against the volatility of other cryptocurrencies. The stablecoin was created by company Tether Limited. USDT was developed in 2014 and released in 2015. Its value is backed by reserves in US dollars, pegged to fiat currency at a 1:1 ratio. According to CoinMarketCap, the token ranks third in market capitalization ($117 billion). Tether’s popularity and high trading volume make it more convenient to use than other stablecoins. USDT is available for purchase on most leading cryptocurrency exchanges.

Initially, the stablecoin was based on the Bitcoin blockchain, but it was soon integrated into other networks, which helped it become widely accessible.

USDT supports the following token standards:

• On the Ethereum blockchain – ERC-20.
• On the TRON network – TRC-20.
• BEP-2 is available on the Binance blockchain.
• BEP-20 is supported by the Binance Smart Chain.

Briefly About Blockchain

A blockchain is a public database that stores information in digital format. These ledgers are particularly popular in the world of cryptocurrencies because they’re decentralised, eliminating the need for a trusted third party.

A blockchain consists of blocks that store information about each transaction, such as the addresses of the participants and the transaction amount. Personal data of wallet owners remains private, ensuring security.

Ethereum is a decentralised software platform based on blockchain technology. The Ethereum network has a native token, ETH. The blockchain uses ERC-20 standard tokens to create and issue smart contracts on the network. ERC stands for 'Ethereum Request for Comment'. The ERC-20 standard was introduced in 2015. Many well-known digital currencies are based on ERC-20, such as Maker (MKR), Basic Attention Token (BAT), Augur (REP), and OMG Network (OMG).

TRON is a decentralised digital platform based on blockchain technology with a native token, TRX. TRON is often compared to Ethereum because they’re similar in structure. TRC-20 is a technical standard used for smart contracts on the TRON blockchain.

What is the difference between ERC-20 and TRC-20 USDT?

The sale of the stablecoin under the ERC-20 standard began in 2018. Integration into the Ethereum blockchain made USDT compatible with decentralised applications on the network. Additionally, it helped increase transaction speeds. Tether stablecoins make up about 50% of the total coin supply.

Then, in 2019, USDT was integrated into the TRON network using the TRC-20 protocol.

Although the ERC-20 and TRC-20 standards are very similar in their main characteristics, the Tether stablecoin on the TRON network differs from USDT on the Ethereum network.

What is the difference between USDT ERC-20 and TRC-20?

The main difference between Tether stablecoins of different standards lies in the transaction fees. The Ethereum blockchain is characterised by low data processing speed and high transaction fees.

USDT is known as the most transacted crypto token, so the difference in fees across different blockchains is a crucial factor for investors. In terms of transaction fees, the TRON network is more advantageous for users as it has lower fees compared to Ethereum. Therefore, by choosing USDT of the TRC-20 standard, investors pay less for cryptocurrency transactions.

One of the advantages of using ERC-20 tokens is the ability to exchange USDT for other coins of this standard. The most popular digital currencies of the ERC-20 protocol are Decentraland (MANA), Chainlink (LINK), and Uniswap (UNI). On the other hand, transactions involving Tether TRC-20 require several additional steps to obtain the same tokens. This results in extra costs and lost time for the investor.

Thus, the key differences between USDT ERC-20 and TRC-20 are:

1. Transaction fees (on the TRON, network they’re lower and are charged in the native TRX tokens. On the Ethereum blockchain, transaction fees are charged in ETH).
2. Issuance protocol.
3. Transaction speed (transactions on the TRON blockchain are faster).
4. Security (the Ethereum network is reliable and widely popular).
5. Storage method (not all cryptocurrency wallets support TRC-20 standard tokens).

USDT TRC-20 tokens offer the same features and benefits as ERC-20, with some exceptions: since the Ethereum blockchain is more congested, this leads to higher transaction fees. Therefore, TRON-based coins are becoming increasingly popular among users, especially those dealing with stablecoins. USDT TRC-20 tokens feature fast transaction confirmations and low network fees.

F.A.Q.

What is a USDT TRC-20 wallet?

A USDT TRC-20 wallet is a cryptocurrency wallet that supports Tether (USDT) tokens on the Tron blockchain (TRC-20).

Key points to note:

• TRC-20 is a token standard on the Tron blockchain. It provides faster and cheaper transactions compared to other standards like ERC-20 on the Ethereum blockchain. More details can be found in the article above.
• USDT TRC-20 is a version of the Tether stablecoin adapted for the TRON blockchain.

Various types of wallets can be used to store USDT TRC-20, including hardware, software, and online wallets.

All cryptocurrency wallets are divided into three types. The first type works only with the Bitcoin blockchain (Bitcoin wallets). The second type works on the Ethereum network (applications for ERC-20 standard tokens). The third type is a multi-currency option that allows you to work with different coins and tokens. This is the type we need. You can open such a wallet on EMCD. More on this below.

Which wallets support TRC-20?

The EMCD wallet supports USDT and USDC of the TRC-20 standard on the TRON network. This means you can deposit stablecoins into your wallets in the ecosystem and withdraw coins to other wallets without any issues. You can also open a wallet in the EMCD app or web version in the Coinhold service and earn up to 14% per annum in crypto just by holding coins in your account.

Additionally, there are other popular cryptocurrency wallets that support TRC-20 tokens:

• TronLink. A popular browser extension that supports TRC-20 tokens and provides a convenient way to manage assets.
• Trust Wallet. A secure mobile wallet that is great for storing and using TRC-20 tokens.
• Ledger Nano S. A hardware wallet that provides a high level of security for your digital assets and supports TRC-20 tokens.
• Atomic Wallet. A multi-currency wallet that allows you to manage TRC-20 tokens along with other cryptocurrencies.
• Cobo Wallet. A mobile wallet with an intuitive interface and integrated staking features, supporting TRC-20 tokens.
• MetaMask. Known for its roots in Ethereum, this wallet now supports TRON and TRC-20 tokens.

How to create a TRC-20 network?

• Register on the EMCD website and create an account.
• Select the currency – USDT.
• Fund your account. Make sure you have enough TRX in your wallet to pay for transaction fees.
• Be sure to find your wallet address. You will need it if someone sends you crypto.

What are BEP2 and BEP20?

BEP2 and BEP20 are two different token standards used in the Binance Chain and Binance Smart Chain networks, respectively.

What you need to know about BEP2:

• Network: Binance Chain (now known as BNB Beacon Chain).
• Purpose: used for native transactions on Binance Chain.
• Features: BEP2 tokens are designed for fast and cheap asset transfers within the Binance ecosystem. They don’t support smart contracts.

What you need to know about BEP20:

• Network: Binance Smart Chain (now known as BNB Smart Chain).
• Purpose: used for smart contract transactions on Binance Smart Chain.
• Features: BEP20 tokens are compatible with ERC-20 tokens on Ethereum, allowing them to be used in decentralised applications (dApps) and smart contracts.

Thus, the main difference between the token standards is that BEP2 is used for native transactions on Binance Chain, while BEP20 is used for smart contracts on Binance Smart Chain.