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As a crypto user, you'll encounter protocols, platforms, and standards. For example, if you trade Ethereum, you'll have heard of the ERC-20 standard. Similarly, you might have come across the Bitcoin protocol and Binance platform.

Standards, protocols, and platforms are essential in the crypto space. So what do these concepts mean, and how do they differ?

Standards specify how fungible and non-fungible tokens (NFTs) should be built, stored, and used. Crypto organizations, enthusiasts, and developers establish these token standards to be integrated with smart contracts. Once integrated, they ensure that smart contracts function as they should on a blockchain.

Imagine a crypto firm using a common standardmaybe ERC-20when creating a smart contract for a new token. Once they launch this new token, it'll be compatible with existing exchanges, protocols, and wallets that use the same standard. You can swap a new token created using the ERC-20 token standard with existing tokens of the same standard, like ETH.

There can be diverse token versions of a standard, but all the tokens must follow the same standard rules.

Standards are essential because they foster interoperability, allowing distinct tokens and smart contracts to interact and work together. These blueprints also give programmers a reusable template for creating tokens instead of always reinventing the wheel.

Because Ethereum is the most commonly used blockchain for creating smart contracts, it offers some of the most popular token standardFor example, theThe ERC-20 standard is used to create fungible tokens, while the ERC-721 is used to create non-fungible tokens.

Similarly, Binance's BNB Smart Chain (BSC) offers the BEP-20 token standard, which is compatible with the ERC-20 standard.

BEP-721 for BSC, TRC-20 for Tron, and ERC-1155 for Ethereum are other common crypto standards.

Blockchain participants require guidelines that define how they handle or manage data, communicate, reach consensus, validate transactions, etc. Protocols establish these guidelines.

Every blockchain or cryptocurrency has a protocol to ensure security, decentralization, consistency, and scalability. In addition, these protocols are trustless; they use cryptography to operate without third parties or trusted intermediaries.

Many protocols, including the Bitcoin and Ethereum protocols, are transparent, decentralized, and open-source, allowing all participants to monitor and verify the underlying code. But protocols could also be centralized and closed-source.

The first crypto protocol created was the Bitcoin protocolthe rules governing the interaction of Bitcoin nodes and the verification of transactions. This protocol enables trustless, non-reversible digital financial transactions using a proof of work consensus algorithm, digital signature, peer-to-peer system, public-key cryptography, and hashes.

Another popular blockchain protocol is the one that powers Ethereum (ETH) and several decentralized applications (DApps). The Ethereum protocol primarily focuses on the creation and execution of smart contracts. But it still enables a wide range of decentralized financial transactions, including payments, lending, and saving.

Similarly, the Hyperledger protocol enables information sharing and several business transactions and services. However, unlike Ethereum and Bitcoin, it is centralizeda central authority manages the protocol. Still, its underlying code is open-source.

In the crypto industry, the term "platform" is typically used to refer to two different things.

The term "platform" can refer to a digital infrastructure that offers developers resourcessuch as a protocol or blockchainfor building, executing, and hosting applications or services. In this case, Ethereum is a platform, allowing developers to build DApps using the Ethereum protocol and host them on the Ethereum blockchain.

However, "platform" is often used to describe a cryptocurrency exchange where you can swap, buy, or sell crypto assets. Crypto exchanges work like online brokerage platforms, offering you all you need to trade digital assets like Bitcoin or NFTs.

Ethereum and BNB Smart Chain are crypto platforms in the sense that they enable developers to build DApps using their respective protocols and host them on their blockchains.

However, exchanges like Binance and Coinbase are places where you can trade cryptocurrencies. These trading platforms may be centralized, like Binance and Coinbase, with a single authority managing the exchange, or decentralized, like Uniswap and Pancakeswap, with peer-to-peer trading.

Standards determine how tokens, and ultimately smart contracts, are to be created and used, while protocols guide the interactions between parties on a blockchain network. Meanwhile, a platform could refer to a software infrastructure that offers resources for building blockchain-based services or apps or a crypto exchange that allows you to interact with digital assets.

You can't access or interact with tokens or blockchain-based applications and services without standards, protocols, and platforms.

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Standard vs. Protocol vs. Platform: What's the Difference? - MUO - MakeUseOf