Bitcoin Cash Aims To Take On ERC-20

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Bitcoin Cash Aims To Take On ERC-20

By Ryan Warner
August 16th, 2018

Roger Ver, last week, announced that the Wormhole protocol is going to allow developers to issue tokens on the Bitcoin Cash blockchain. This could be Bitcoin Cash's challenge to Ethereum and ERC-20 tokens.

Cryptocurrency can be split into two categories - coins and tokens. With coins being currencies that have original blockchain support (i.e. Bitcoin) and tokens using pre-existing blockchains for support. Tokens use Initial Coin Offerins (ICO's) to garner support for their project before being released to exchanges. The vast majority of ICO's are currently based on the Ethereum network's ERC-20.

ERC-20 is popular since it lays out a basic set of rules, and creating a new token can be done in a short period of time. So much so that there currently exists over 110,000 ERC-20 tokens. ERC-20 is largely responsible for the ICO craze of 2017.

ERC-20 does have some flaws such as the batchOverflow bug. This bug has resulted in the loss of over $3 Million alone. There are several new protocols of ERC looking to replace and fix the problems with ERC-20, but perhaps the answer is on a completely different blockchain altogether.

Wormhole is a Bitcoin Cash smart-protocol upgrade. Of note is the development was initiated by Bitmain. Wormhole allows developers to issue a smart-contract without changing the consensus rules of the Bitcoin Cash blockchain.

A native token called Wormhole Cash will also be supported. This is in essence BCH's version of GAS used by Ethereum.

Whether or not Wormhole will be able to challenge ERC-20 is yet to be seen. That said, Ethereum now has challengers in the token market aiming to overcome the shortcomings of ERC-20.