USDT TRC20 vs. ERC20: A Complete Guide

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Introduction

The world of cryptocurrency has welcomed many investors who have found significant success. As we move through 2023, digital assets running on blockchain technology have become essential. Blockchain serves as a secure digital ledger for storing virtual assets.

Cryptocurrencies are generally divided into two main categories: coins and tokens. Coins are typically the native currency of a specific blockchain. For example, Ether is the native coin of the Ethereum blockchain, and Bitcoin operates on the Bitcoin blockchain. Tokens, on the other hand, are created using existing token standards on a blockchain.

What Is Tether?

Tether, also known as USDT, is a stablecoin that operates on both Bitcoin and Ethereum blockchains. Stablecoins are unique because they maintain a constant value tied to an underlying asset. In the case of Tether, its value is pegged to the US dollar at a 1:1 ratio.

Originally named "Realcoin," Tether was founded in July 2014 by Craig Sellars, Brock Pierce, and Reeve Collins. Many investors prefer Tether because it offers stability in the highly volatile cryptocurrency market. It avoids price fluctuations while preserving value.

Tether was created to address two major challenges in the crypto space: high volatility and the difficulty of converting between fiat and cryptocurrencies. As a result, Tether has become one of the most stable investment options available.

Understanding Token Standards

A token standard refers to a set of rules that govern digital tokens based on a specific framework. In simple terms, it is a mechanism for creating, issuing, and deploying new tokens on a particular blockchain.

ERC20 and TRC20 are both token standards. These standards consist of mandatory guidelines established by a blockchain ecosystem. All participants must follow these rules when creating new tokens. The guidelines define how tokens interact with the network and outline the launch process.

For instance, developing a token using the ERC20 standard on the Ethereum blockchain allows developers to easily design and establish new tokens. Each ERC20 token shares common properties governed by the same rules.

Tron has a similar system, though it is not as widespread as Ethereum. TRX and Tether (USDT-TRC20) are among its most prominent representatives.

Accepting Tether (USDT) as a payment method for products or services is a smart decision. It helps businesses avoid the volatility associated with Bitcoin and other cryptocurrencies. Since Tether is pegged to the US dollar, it provides a reliable payment option for companies of all sizes.

To start accepting Tether payments, you can integrate a cryptocurrency payment gateway into your website or online store. These solutions are user-friendly and allow merchants to accept multiple cryptocurrencies, including Tether, without requiring extensive coding knowledge.

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What Is Tether ERC20?

Tether ERC20 is a version of USDT that operates on the Ethereum blockchain and adheres to the ERC20 standard. Unlike some other stablecoins issued on the Bitcoin blockchain, Tether ERC20 was developed on Ethereum. This makes it compatible with other tokens created on the same platform.

As a result, Tether ERC20 is a popular choice among investors who prefer to keep their assets within the Ethereum ecosystem. The acronym ERC stands for Ethereum Request for Comments, and 20 is the proposal identifier. It is the most widely used standard for creating cryptographic tokens.

Creating tokens using the ERC20 standard offers several benefits:

According to statistics, there are currently around 450,000 ERC20 token smart contracts in the crypto ecosystem. Some popular ERC20 tokens include Tether, DAI, UNISWAP, CHAINLINK, Shiba Inu, and Wrapped Bitcoin.

What Is Tether TRC20?

TRC20 refers to the USDT stablecoin issued on the TRON blockchain network. As a technical standard, TRC20 operates on the TRON blockchain using TRON addresses. This means all transactions involving TRC20 occur on the TRON network.

The TRC20 token standard is a popular framework for creating cryptographic tokens on the Tron blockchain. It includes all necessary guidelines and regulations for token creation. Essentially, TRC20 tokens share many characteristics with ERC20 tokens, making them compatible with each other.

Additionally, TRC20 tokens facilitate highly secure transactions. Token creation is assisted by the Tron Virtual Machine (TVM). TRC20 tokens possess high energy and bandwidth levels, making them a preferred choice for startups and entrepreneurs.

Developing TRC20 tokens offers several advantages:

The crypto ecosystem has many TRC20 tokens in circulation. Some of the most popular include WINK, NOLE, TERC, SEED, LVH, IGG, BTT, and NoleWater.

Key Differences Between ERC20 and TRC20

Let’s examine the differences between ERC20 and TRC20 tokens based on several key factors.

Network

ERC20 tokens are built on the Ethereum network (ETH), while TRC20 tokens are built on the Tron network.

Address Style

One of the main differences between these two token types is their address style. ERC20 tokens use Ethereum addresses that start with "0x" (e.g., 0xbd9e...). TRC20 tokens use Tron addresses that usually start with "T" (e.g., T7zP19...).

Transfer Speed

TRC20 tokens generally have faster transfer speeds than ERC20 tokens. This is because the Tron network has a higher transactions per second (TPS) rate than Ethereum.

Fees and Cost

TRC20 tokens typically have lower transaction fees compared to ERC20 tokens. Tron's blockchain uses a different consensus mechanism than Ethereum, which helps keep costs down.

On average, ERC20 transactions cost around 30 USDT, while TRC20 transactions cost approximately 2 USDT.

Conclusion

Tether is distributed across multiple blockchains, with Tron and Ethereum being two of the most significant. They use the TRC20 and ERC20 standards, respectively. Each has its own advantages and disadvantages.

Although both Tether ERC20 and TRC20 are stablecoins designed to maintain a value of $1.00, they operate on different blockchains with distinct address styles, transfer speeds, and fees.

Therefore, it's essential to choose the token standard that best suits your business needs. If you are looking for more cost-effective and faster transactions, TRC20 may be the better choice.

Getting Started With TRC20 or ERC20

If you own a small or medium-sized business, accepting Tether—especially the TRC20 token standard—can significantly reduce your operational costs and provide a safe entry into cryptocurrency investment.

Using a cryptocurrency payment gateway is a cost-effective solution for business owners. One of the most significant advantages is the low transaction fees. Unlike traditional payment methods such as credit cards and bank transfers, which often charge high fees, some crypto payment providers charge as little as 0.5%.

Additionally, these gateways offer fast and reliable payment processing, ensuring you receive your funds quickly. They are also user-friendly, with intuitive interfaces that make it easy to manage payments and track transactions.

Furthermore, reputable providers offer excellent customer support, ensuring any issues or concerns are addressed promptly.

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Frequently Asked Questions

What is the main difference between USDT TRC20 and ERC20?

The primary difference lies in the blockchain they use. TRC20 operates on the Tron network, while ERC20 is on the Ethereum blockchain. This affects transaction speed, cost, and address format.

Which is faster, TRC20 or ERC20?

TRC20 is generally faster because the Tron network has a higher transaction throughput compared to Ethereum.

Why are TRC20 transaction fees lower?

Tron uses a different consensus mechanism that requires less computational power, resulting in lower fees. Ethereum's network often experiences higher congestion, which drives up costs.

Can I send TRC20 tokens to an ERC20 address?

No, you cannot. TRC20 and ERC20 tokens operate on different blockchains with incompatible address formats. Sending tokens to the wrong address may result in permanent loss.

Is Tether TRC20 as secure as ERC20?

Both standards are secure, but they rely on the security of their respective blockchains. Ethereum has a longer track record, while Tron offers high-speed, low-cost transactions.

Which token standard should I choose for my business?

If you prioritize low fees and fast transactions, TRC20 is an excellent choice. If you prefer wider compatibility with Ethereum-based applications, ERC20 may be more suitable.