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    Bitcoin Cash (BCH) Wormhole vs Ethereum (ETH) ERC20 Token Protocol

    New Token From Bitcoin Cash Brings Forth the Wormhole Protocol, Which is Potential Threat to ERC-20

    On August 11th, Roger Ver, the CEO of Bitcoin.com, announced that the company would be unleashing a new tool on Bitcoin Cash. This new tool gives developers the option of issuing tokens, involving a process called the Wormhole Protocol. With these new possibilities, the door is wide open for chain in the blockchain industry. Corbin Fraser, one of the lead developers for Bitcoin.com, said, “For better or worse, ICOs and CryptoKitties are probably coming to Bitcoin Cash in the near future.” However, one of the big suggestions is that this new option has the potential to eliminate the need for ERC-20.

    Understanding Tokens and Coins

    The two assets dividing the cryptocurrency market are coins and tokens. Though some experts use the phrases interchangeably, they actually are not the same at all. Coins are used as ways to pay and have the support of original blockchains. Tokens, on the other hand, are part of Initial Coin Offerings (ICOs), which are when a company holds a sale before their platform is active. Tokens are also based on an existing blockchain, rather than an original. A good example of that is in the way that 82.86% of tokens are built on the Ethereum blockchain, using technology that is already in place, rather than establishing their own system.

    What Makes ERC-20 the Chosen Blockchain?

    With such a high number of ICOs developing their platforms on top of Ethereum blockchain, it may be smart to wonder why. After all, it is referred to as “the king of DApps” as a result of the popularity. “ERC” stands for “Ethereum Request Comments,” and it was originally published by Fabian Vogelstellar on GitHub in 2015. The information outlines the way that these tokens are required to work on the ecosystem, even down to how many tokens can be issued.

    Through its short lifetime, users have enjoyed how simple and straightforward the ERC-20 principles are, especially considering that it does not take an engineering degree to work with it. Mainly, developers only have to copy the coding from GitHub, decide how many tokens they want to have, establish a name and a symbol. Then, after putting some ETH into the blockchain, the token is ready.

    Based on the most recent numbers, it seems that there are over 110,000 tokens under this protocol, with some of the most popular ones being EOS and TRON, which are in the top 12 for market cap. There is a surprising number of those tokens that are not actually directly used, because of the need to adhere to the regulatory measures in the industry still. Though it took a while, Ethereum is “not a security,” according to the SEC, but that does not trickle down to the tokens on the ERC-20 blockchain. The deciding factor is how they are marketed, and most of them are just a representation of shares.

    Problems With ERC-20

    Since ERC-20 was the first version of Ethereum-based protocol issued in the industry, there are still many problems that come with its use, most of which have revealed themselves over time. One issue that made headlines is the batchOverflow bug. With this flaw, if users send ERC-20 tokens, rather than ETH, the funds get stuck inside the receiving smart contract. Basically, users cannot use tokens from ICOs, and this has accounted for $3 million in losses, and the developers still only are willing to call this a “user error,” rather than assuming the blame of a bug in their system.

    After the bug, there were multiple exchanges in April this year that stopped deposits and withdrawals that involved ERC-20 tokens, based on the glitch. As a result, it seems that developers of ERC protocols are trying to eliminate the ERC-20, bringing in options that will either hide the problems or bring in new features. Presently, there is:

    • ERC-223, which corrects the problems in ERC-20
    • ERC-721, which brings in collectible tokens, like CryptoKittens
    • ERC-948, providing an opportunity in a subscription

    There are still others in the works, but Wormhole has the potential to truly compete against ERC-20, with no ties to their blockchain.

    Bitcoin Cash’s Wormhole

    Wormhole is not a bug or a glitch, and it certainly does not hold the same risks at ERC-20. Specifically, this protocol is more of an upgrade or an update that works on the Bitcoin Cash blockchain. It was created and introduced by a team of developers under Jiazhi Jiang, who presented the whitepaper in July. Basically, integration of Wormhole means that users can apply a smart contract feature, but without any of the rules it runs by on Bitcoin Cash’s blockchain. There is an opcode, OP_RETURN, used on the platform to make this possible.

    The new protocol also makes it possible to support native tokens, which are involved in smart contracts on the BCH blockchain to develop ICOs, and the tokens are referred to as Wormhole Cash (WCH).

    A Challenge to ERC-20

    With these changes, and without the issues that ERC-20 platforms deal with daily, it is clear that there is now a strong rival for the top spot in the industry. ERC-20 is heavily tied in with almost any ICO though, so it is uncertain if they will have the chance to outperform, despite their benefits. They are still new, so the industry will probably be taking a close look to see how potential bugs impact Wormhole.

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    Bitcoin Exchange Guide News Team
    B.E.G. Editorial Team is a gracious group of giving cryptocurrency advocates and blockchain believers who want to ensure we do our part in spreading digital currency awareness and adoption. We are a team of over forty individuals all working as a collective whole to produce around the clock daily news, reviews and insights regarding all major coin updates, token announcements and new releases. Make sure to read our editorial policies and follow us on Twitter, Join us in Telegram. Stay tuned. #bitcoin

    [Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

    [Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

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