ERC20 Decimals – Understanding ERC20 Decimals in Smart Contracts

The way I think about this is that the number of tokens is:

tokenSupply = tokensIActuallyWant * (10 ** decimals)

If I want 1 token with the ability to subdivide it with a precision of 2 decimal places, I represent that as 100.

Similarly if I want 1 token with the ability to subdivide that to 18 decimal places, I need to represent that as 1000000000000000000 (1 with 18 zeros).

Hope that helps.

There is a long list of questions here which generally makes it hard to answer them. I will start with the basics. The ERC20 Token that you created is stored on the blockchain and you can interact with it by calling different functions like getBalance, sendTransaction.

The way it works is that these tokens are used as a currency for different business models. This is the same concept as nowadays companies offer shares during Initial Public Offering(IPO). Same is the case here. This token is used as a tool to raise money. Companies who want to raise money through this generally publish there whitepapers listing in detail their business model and how they will create value for those who invest in their business

ICO (Initial Coin Offering) is used to distribute this tokens to the investors. For this another contract is written similar to the one used for deploying your ERC20 token, but is much more complex and detailed. This contract is linked to the ERC20 token address. and also contains a price in Ethers for these tokens. Anyone who wants to invest in the business would send Ethers to the ICO Address and would be rewarded tokens accordingly. E.g. 1 Ether = 1000 tokens.

Initially these tokens have zero value in the market. Once the company start their business, these tokens are listed in an crypto-currency exchange. From there tokens get market value.