In doing so, the user can specify the maximum offer and the ticker of the new token and set a limit on the maximum number of tokens to be mined in one wallet. The future of BRC-20 tokens may be uncertain, but what’s clear is that they have added an entirely new dimension to the Bitcoin network. As we look forward to more advancements, the story of BRC-20 serves as a reminder of the innovative spirit that continues to drive the crypto world forward. Holders can use them to take part in decision-making processes for decentralized organizations or platforms. Domo, an Ethereum developer, introduced the BRC-20 standard in March 2023. The innovation quickly captured public attention and led to the generation of many new tokens in the Bitcoin ecosystem.
Use Cases for BRC-20 Tokens
They can redeem them this is how the bitcoin bubble will burst for discounts, special privileges, or exchange them for other goods. It creates an unchangeable record of the journey from production to distribution. If nothing else, BRC-20 tokens are a prime example of the power of open-source communities and collaborative development.
BRC-20 tokens Vs Bitcoin Runes: What’s the Difference?
This article will be your guide to the world of the BRC-20 standard and will tell you what it is and what functionality it has. In addition, you will learn about some of the most popular tokens created under the BRC-20 standard. Its creation sparked great interest and the emergence of numerous other BRC-20 tokens. As a result, a number of Bitcoin wallets soon developed the necessary tools to support this new token class. Also, the standard developers are rapidly expanding and are dedicated to enhancing its features and making it easier for developers to create tokens. Although only experimental, BRC-20 tokens have already had an impact on the Bitcoin network and the DeFi market as a whole.
On May 12, 2025, SEC Chair Paul Atkins introduced a new regulatory strategy for digital assets, with a focus on tokenization, custody, and crypto trading practices. So, before you go diving into BRC-20, make sure you do your research. While Ledger can protect you from exposing your private key on the internet, it can’t prevent you from mismanaging your ordinals. It’s all too easy to send your BRC-20 tokens by mistake, so before you dive in, make sure you check out the support article on how to manage ordinals. As the BRC-20 protocol is entirely experimental, the assets it creates are high-risk and have an uncertain future.
The content on The Coinomist is for informational purposes only and should not be interpreted as financial advice. While we strive to provide accurate and up-to-date information, we do not guarantee the accuracy, completeness, or reliability of any content. Neither we accept liability for any errors or omissions in the information provided or for any financial losses incurred as a result of relying on this information. Before Taproot, there were attempts to add more data to the Bitcoin blocks, but there was no standard way, and it wasn’t widely practiced.
The name of the token goes back to the internet meme called “Wojak” (polish for soldier or warrior). It’s a simple black-and-white cartoon drawing of a bald man with a wistful expression. This particular token is a memecoin and to learn more about these types of assets, check out the full article on what a memecoin is. So now you know how they work, you might be wondering which BRC-20 tokens you may already know about. Keep in mind that most of these tokens have been created for educational or entertainment purposes and may not hold any future value. Satoshis mined within the first 1000 blocks, or even mined by Bitcoin founder Satoshi Nakamoto himself, have an inherent value.
This experimental protocol introduces the minting and sending of fungible tokens on Bitcoin’s blockchain, creating new possibilities, but also challenges. While the BRC-20 token standard bears some resemblance to ERC-20, it possesses its own unique characteristics and significant differences. Ethereum tokens rely on smart contracts, whereas BRC-20 tokens are created by adding JSON (Javascript Object Notation) code to satoshis.
BRC-20 is an experimental fungible token standard using ordinal inscriptions on Bitcoin. Due to the implementation of smart contracts, ERC-20 tokens offer a wider range of functionality compared to Bitcoin tokens. However, BRC-20 tokens are more decentralized, as multiple wallets can participate in the minting process. It uses sequential numbering to encode data in the smallest units of BTC, known as satoshis.
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The constraints may limit the complexity of DApps and smart contracts on the new standard. It shows how the crypto field is always changing and how the community wants to see what the Bitcoin blockchain can do. These token standards operate on two separate blockchain platforms; BRC-20 on Bitcoin how to get bitcoins in the uk and ERC-20 on Ethereum. Ethereum uses Proof-of-Stake with validators staking ETH for transactions, while Bitcoin relies on Proof-of-Work with miners solving puzzles to validate transactions.
What are BRC-20 tokens?
This hunger for blockspace surprised the Bitcoin community, and the effect on Bitcoin transaction fees has been significant. The Bitcoin network was designed to provide peer-to-peer cash that could be transferred across borders without the need for any intermediaries – a fully decentralised monetary system. In line with the Trust Project guidelines, the educational content on this website is offered in good faith and for general information purposes only.
At the time of writing this article, this token holds one of the leading positions on the BRC-20 token market with a daily trading volume above $600,000 thousand. Turning BRC-20 tokens into full-fledged digital assets with such limited functionality and no developed ecosystem would seem impossible. It is now a full-fledged marketplace with the following most popular tokens. The concept is inspired by ERC-20 tokens on the Ethereum network, but comes with its own unique mechanics and functions. Also, it’s important to note that, unlike ERC-20, this new BRC-20 token standard does not support smart contracts.
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- The only conceivable utility of a BRC-20 token currently is it allows miners to earn more as fees have skyrocketed.
- And yes, they are giving the meme coin lovers new options to trade new volatile assets.
- Lower transaction costs and increased user utility might propel its adoption.
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- For instance, to circumvent the limitations of BRC-20, a new Bitcoin token standard — ORC-20 — has been developed to enhance BRC-20’s functionalities.
- Launched by the team behind BRC20.com, which was recently purchased for 21 BTC, the platform intends to become the leading infrastructure provider for BRC20s.
- This expansion mirrors the versatility seen in Ethereum’s ERC-20 standard, which has been instrumental in the proliferation of decentralized finance (DeFi) and other blockchain applications.
- BRC-20 tokens are minted through smart contracts, which are self-executing contracts with the terms directly written into code.
- The first BRC-20 token was minted by a Twitter user named @domodata in March 2023.
BRC-20 tokens are still in the nascent stage, and more time is needed to reveal their impact on the Bitcoin blockchain. This experimental stage leaves room for better design choices and optimisation improvements in the future. For instance, to circumvent the limitations of BRC-20, a new Bitcoin token standard — ORC-20 — has been developed to enhance BRC-20’s functionalities. In live cryptocurrency prices this sense, until recently, Bitcoin lagged behind its competitors, without a usable token system on-chain and missing out on the potential of the Decentralised Finance (DeFi) space. But with the introduction of the Taproot upgrade and the creation of the Bitcoin Ordinals protocol, this has changed and now tokens on top of the Bitcoin network, utilising the new BRC-20 token standard. However, challenges such as network congestion, scalability concerns, and the absence of smart contract functionality can become obstacles to BRC-20’s widespread adoption.
And so, simply put, BRC-20 is an experiment in how to mint and transfer new fungible tokens on the Bitcoin blockchain. Understanding the mechanics of BRC-20 is essential for leveraging its full potential. At its core, BRC-20 operates by defining a set of rules and standards that govern the creation, distribution, and management of tokens on the Bitcoin blockchain.
We mentioned earlier that the JSON script during deployment determines the total supply and mint capacity of the concerned token. If you want to deploy a BRC-20 token, you are free to choose your own token economics model. Do note that this JSON script is meant to deploy or create a BRC-20 token. Bitcoin Core developer, Luke Dashjr, told CoinDesk that ordinals represent an “attack” on Bitcoin because of this congestion from the large file sizes. Unlike ERC-20, BRC-20 is not an approved standard but still in the proposal phase, and unlike ERC-20 tokens, BRC-20 tokens are not easily traded on exchanges at this time. This is why there are millions of ordinals but just over 14,000 BRC-20 tokens.
Ordinals enabled NFTs to be created that are completely Bitcoin-native, don’t require layer-2 solutions, work without changes to the Bitcoin protocol, and are backward compatible with the network. Ordinal inscriptions quickly caught on as a way to store immutable information on the Bitcoin blockchain. The Ordinals Protocol makes it much easier to add extra data, like text, pictures, or audio, to Bitcoin blocks.