$827 to create an ERC20 Token!
Recently I tried to issue an ERC20 token called XCP.
The idea was simple. Enable Counterparty users the option to transfer XCP from Bitcoin to Ethereum via burning.
Enter the Ethereum Address you want to receive the ERC20 XCP token at via www.bitcointrustnetwork.com
Send XCP to the Bitcoin Trust Network burn address that was generated when you imputed the Ethereum Address.
Receive the equal amount of XCP burned as an ERC20 token at the Ethereum Address you entered via the Bitcoin Trust Network.
XCP is now burned on the Bitcoin Blockchain and is represented on Ethereum. The Bitcoin Trust Network proves the Ethereum Address burned equal amount received.
I went to create the ERC20 token XCP and Meta Mask was telling me it was going to cost $827.18 in gas fees!
I started digging on Etherscan.io to see if anybody else has issued a token with the symbol XCP before buying.
To my surprise 4 contracts with the same token symbol/name appeared!
With Ethereum, you’re not buying a unique token/asset, just a unique contract address. No one actually owns any token/asset naming rights with Ethereum, just the contract address itself.
This was odd to me because with Counterparty, only a single address can issue/own the right to a uniquely named token. After a token is issued on Counterparty, no one else can ever issue that token name/symbol again.
(Image: The token names displayed are owned by the issuer on Counterparty. No one else can create this token again)
With ERC20 tokens, you don’t get ownership of the token name or symbol, just ownership of the contract address!
Counterparty has free assets that look like this: A11109515495928555101.
Not surprising, nobody really likes these assets in the Counterparty community! They are just a bunch of numbers that all look the same.
Guess what? All of Ethereum’s tokens are like that! Here’s what you get when buy an ERC20 token: 0x45ac722D67093c5fF1913D9B37420453fe81337b
I find it very confusing that ERC20 tokens give the token owner no naming/symbol rights. Anyone under the sun can create fake tokens with the same names and the only way to tell the difference is by examining numbers like this: 0x45ac722D67093c5fF1913D9B37420453fe81337b
With Counterparty, you own the naming rights of the token. Once issued, that token name can ever be issued again.
Counterparty tokens are also stored on the Bitcoin Blockchain (most secure chain) and it only costs about $1 right now to issue your own Counterparty token. 99.7% less expensive than Ethereum!
I believe no naming ownership rights will become a bigger problem for Ethereum and its users in the future. The data is not in human readable form and probably has already and will continue to result in major scams in the future.