Summary: BRC-20 tokens are an experimental fungible token standard built on the Bitcoin base chain using Ordinals and Inscriptions, with no smart contract interaction. Gaining attention in the crypto community, these tokens have a market cap of over $2 billion.
What is a BRC-20 Token?
BRC-20 tokens are a new fungible token standard built on the Bitcoin (BTC) base chain, utilizing Ordinals and Inscriptions. These tokens employ Ordinal inscriptions of JSON data for deploying token contracts, minting, and transferring tokens between users. Unlike Ethereum's ERC-20 tokens, BRC-20 tokens lack smart contract interaction capabilities and are not native assets on the Bitcoin base chain.
Created as a proof-of-concept, BRC-20 tokens are not intended to hold value but have attracted attention from the crypto community. The standard enables the storage of script files in Bitcoin, attributing tokens to satoshis, and facilitating their movement among users. Their creation has spurred discussions about the potential applications of Ordinals, Inscriptions, and Taproot transactions in the crypto space.
How Does BRC-20 Work?
BRC-20 tokens work by leveraging Ordinals and Inscriptions on the Bitcoin base chain. Here's a step-by-step breakdown of how BRC-20 tokens function:
- Deployment of token contracts: BRC-20 tokens use Ordinal inscriptions of JSON data to deploy token contracts on the Bitcoin base chain. The JSON data contains essential information such as the token's name, symbol, and total supply.
- Minting tokens: Once the token contract is deployed, new tokens can be minted according to the predefined rules. Users must choose their inscription service carefully, as the first address to receive the inscription holds the tokens. Recommended services like Unisat can be used for minting and transferring tokens.
- Transferring tokens: BRC-20 tokens can be transferred between users by altering the JSON data inscriptions. These inscriptions act as a record, tracking the movement of tokens between different Bitcoin addresses.
- Storage: The BRC-20 token information is stored within the Bitcoin blockchain as script files. This approach differs from Ethereum's ERC-20 tokens, which rely on smart contracts for managing and enforcing token standards.
It's crucial to note that BRC-20 tokens lack the ability to interact with smart contracts like Ethereum's ERC-20 tokens, limiting their functionality. Read the BRC20 Github Docs for more information.
How Big is the BRC-20 Token Market?
The current market capitalization of BRC-20 tokens is over $2 billion, with $200 million in volume traded on a daily basis. The largest BRC-20 token by market cap is Ordinals ($ORDI) which is the main marketplace for the new token standard on Bitcoin. The price of Ordinals is now over $30 and is worth over $700 million.
Who Created BRC20s?
BRC-20 tokens were created by a Twitter user with the handle @domodata on March 8, 2023. This experimental fungible token standard for the Bitcoin network has gained attention and interest despite its limitations compared to Ethereum's ERC-20 token standard.
Where can I Trade BRC-20s?
BRC-20 tokens, an experimental token standard on Bitcoin, can be traded on Ordswap (https://ordswap.io/). Ordswap is the first trustless Ordinals Marketplace and Wallet built on the Bitcoin network. Keep in mind that as BRC-20 tokens are experimental, trading them may involve risks. Always exercise caution and conduct thorough research before participating in any trading activities.
In conclusion, BRC-20 tokens represent an innovative, experimental token standard built on the Bitcoin base chain using Ordinals and Inscriptions. While not designed to hold value and lacking smart contract interaction capabilities, BRC-20 tokens have gained attention and spurred discussions on the potential of Bitcoin Ordinals, Inscriptions, and Taproot transactions.
With a market capitalization exceeding $2 billion, the BRC-20 token market continues to grow, demonstrating the crypto community's interest in these new token standards. However, as with any experimental technology, it is vital to exercise caution and conduct thorough research before engaging in trading activities.