What are ERC20 tokens and what do they do?

What are ERC20 tokens and what do they do?

If you are new to cryptocurrency you might have seen or heard about ERC20 tokens in crypto forums or in social media posts.  
Broken down to its simplest form, ERC stands for Ethereum Request for Comment and “20” is the number that was assigned to that unique proposal request.  The term “ERC20 token” refers to the common list of rules that were carved out to create an industry standard.
The standard was first proposed in 2015 by Ethereum’s lead dApp developer Fabian Vogelsteller.  Ethereum tokens do not have to follow the specific points drawn out by Vogelsteller, but the ERC20 token standard started to take hold and gain traction as the ICO craze struck.  
Companies working on initial coin offerings were drawn to the ERC20 standard because it made deployment of tokens easier and due to its potential to be interoperable with other Ethereum token standards.
Before the ERC20 standard was set, every time a new startup began to develop a new platform with new tokens built on the Ethereum blockchain, the coding would be different and interoperability or wallet compatibility would not be an option.  
With the advent of the ERC20 standard, the crypto industry started to see a higher level of continuity which led to a higher rate of growth and adoption.
Another result of the ERC20 movement was the rise of supposed next generation blockchains deploying ERC20 tokens as a temporary placeholder with the plan to eventually move to their own mainnet.  
EOS and Tron are prime and popular examples of this conversion. Now there are so many ERC20 tokens, that they actually make up the lion’s share of the cryptocurrency market.
Cryptocurrency exchanges have had success deploying ERC20 tokens.  Binance’s BNB coin is considered by many to be the best and most significant ERC20 token.  The next wave of exchanges will most likely mix the ease of use of ERC20 coins with increasingly demanded feature of full decentralization.  
Bithemoth is an example of this next wave of exchanges. Their BHM token is will run on ERC20 to ensure the safety and security of the token in the long-term and provide simplicity for users.