ERC20 Token Standard - arealive/Viper GitHub Wiki
Developed in 2015, ERC-20 defines a common list of rules that an Ethereum token has to implement. It typifies the standard under which an ICO (Initial Coin Offering) is held.
One of the main capabilities of Ethereum is that it allows a user to create its own token. A token is a representation of value, a sort of digital asset (dasset). The Ethereum developers decided to standardize this process, and so the ERC20 ‘Token Standard’ was created. This templated-contract standardization contains a series of functions that enables the issuance, distribution and control of the assets in a formalized, standardized manner.
A token standard allows for the ease of interoperability between DApps/smart contracts (decentralized applications built on the Ethereum public chain) and the tokens built by the programmers.1
[1] https://medium.com/blockchannel/understanding-the-ethereum-ico-token-hype-429481278f45