Crypto Token Decimals: How They Work and Why They Matter

Crypto token decimals determine how many decimal places a cryptocurrency or token can display and convert its smallest units into user-viewable amounts.

For example, an ERC-20 token with 18 decimals represents one whole token as 1,000,000,000,000,000,000 base units. On the other hand, a token with 6 decimals represents one whole token as 1,000,000 base units.

The Ethereum ERC-20 standard includes a decimals() function that tells applications how many decimal places a token uses. This function is used by wallets, explorers, exchanges, and other applications to display token balances correctly.