For starters, BRC-20 tokens are much more limited than their Ethereum token counterparts. To explain, many blockchains have their own virtual machine that has the power to execute smart contracts. These virtual machines can read and execute code which allows for more complex assets and conditions relating to those assets. BRC-20 tokens are fungible bitcoin assets created via the experimental BRC-20 protocol. The BRC-20 token standard utilises Ordinals inscriptions of JSON data to deploy, mint, and transfer tokens.
Token supply
- Although the BRC-20 token standard presents unique possibilities, it’s not without its challenges, most notably increased network congestion, and the lack of smart contract capabilities.
- Peter has been covering the cryptocurrency and blockchain space since 2017, when he first discovered Bitcoin and Ethereum.
- ERC-20 is a fungible token standard on Ethereum using smart contracts, while BRC-20 is a clever way to create semi-fungible tokens using ordinal inscriptions on Bitcoin.
- BRC-20, on the other hand, has a $1 billion market cap and hardly any utility as of 2025.
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Here we are trying to buy 50 ORDI, paying a network fee of almost $4.52, a 1.6% service fee, and a 0.2% developer royalty. Now we have looked at all the BRC-20 wallets, it is only appropriate to see how you can set one up. Analysts CoinDesk spoke with say that this development could potentially offset the decreasing profitability of Bitcoin mining due to the designed halving of mining rewards.
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As the BRC-20 protocol uses a lot of energy and isn’t always efficient, it can also be expensive to inscribe, distribute, and manage BRC-20 assets. Sticking true to its purpose, most Bitcoin users were happy with its security and didn’t want to use Bitcoin for much else than those core values. They take advantage of the fact that each individual satoshi can be uniquely identified by its equivalent of a serial code. “Memecoins” on Bitcoin is probably not what Satoshi Nakamoto envisioned when he released the Bitcoin whitepaper in 2008, but it just might be the mass adoption Bitcoin deserves.
As every small process requires an inscription, it is little wonder the transactions are getting too much to handle, causing network congestion. This is one of the reasons that Binance had to halt bitcoin withdrawals. A BRC-20 token uses the Ordinals protocol to inscribe a specific type of text to a satoshi, making it a wallet-readable, fungible token. In the case of BRC-20, a text-based script file is stored on a Sat (remember the JSON data we talked about), attributing the token status to the same. Specific BRC-20 wallets can then understand and parse this script file for the purpose of deploying, minting, and transferring.
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Accordingly, he has a certain amount of assets frozen, which cannot be moved for some time. That is, when new tokens are mined, the tokens already created are used. BRC-20 coins are becoming popular with over 14,000 tokens using this new standard. Developers can improve its functionality to make it more competitive with ERC-20. By making financial product development easier and reducing energy use, BRC 20 could become an eco-friendly option. Lower transaction costs and increased user utility might propel its adoption.
Token utility
Well, the Taproot upgrade and the following innovation of the Bitcoin Ordinals protocol created a whole new world of opportunities on Bitcoin. New ideas attract further innovation and one such innovation is the BRC-20 protocol. To be precise, each Satoshi is numbered in the order they are mined and can be inscribed with data — such as pictures, text, or videos — through a Bitcoin transaction. With discussions surrounding the lighting network and BRC-21 integrations, the BRC-20 token standard might just have opened a whole new dimension in web3.
As of 8 May 2023, 14,200 different tokens have been minted using the BRC-20 standard — like ORDI, the first BRC-20 token. For any random entity to become a token, it needs wallets that can decode its metadata or padding. While the likes of ERC-20 tokens have smart contracts doing all of this, this is pretty non-complex for the BRC-20 standard. An alternative to BRC-20 tokens are ARC-20 tokens, which are also fungible tokens on the Bitcoin blockchain, but issued through the Atomicals protocol instead of using the Ordinals protocol.
The serial number is know as an “ordinal”, hence the protocol’s naming. Domo, the creator of the BRC-20 token standard, also highlighted a similar initiative, Taro. Taro is a protocol to create assets on the Bitcoin blockchain, transferring the same to the lightning network to enjoy low fees and high-volume transactions. Even Domo, the original creator, considers this whole BRC-20 blockchain derived from the Ordinals Protocol an experiment.
BRC-20 tokens, created by the pseudonymous blockchain analyst Domo in March 2023, utilize the ordinals inscription mechanism for the creation and transfer of fungible tokens on the Bitcoin blockchain. However, developers have come up with clever solutions that make it possible to issue a variety of digital assets on the Bitcoin blockchain, including fungible tokens as well as NFTs. BRC-20 is a standard for issuing fungible tokens on the Bitcoin blockchain.
The BRC-20 standard was introduced in March of 2023 by a developer using the pseudonym Domo. While this token standard has seen some traction, it’s still regarded as experimental. The Pepe token is based on the famous a guide to investing in cryptocurrency meme with the sad frog Pepe, which first appeared in 2005 in Matt Fury’s Boys Club comic strip and later became a symbol of support for former U.S. Like other meme coins, it has no fundamental value and only grow in value due to the interest of community members.
- BRC-20 tokens (similar to Ethereum’s ERC-20) are digital assets that can be created and transferred in the Bitcoin blockchain using the Bitcoin Ordinals protocol.
- BRC-20 offers several advantages that make it an attractive option for token creators and users alike.
- It has a 21 million token supply (like BTC), and at present, 100% of the supply forms the circulating or the minted supply.
- 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.
- The launch of the Ordinals Protocol — a strategy to tag and number satoshis, the smallest unit of bitcoin — laid the groundwork for BRC-20.
BRC-20 tokens are, in machine learning models fact, a particular type of these inscribed ordinals. Regular Bitcoin ordinals can have any information, but BRC-20 tokens always have JSON (JavaScript Object Notation) data. Despite BRC-20’s limitations, this simple code allows people/users to create, make, and send tokens on the Bitcoin network.
On the weekend of May 6, 2023 the Bitcoin blockchain ground to a temporary halt, when the number of unconfirmed transactions hit a record high. Fees were spiking, and leading crypto exchange Binance had to pause withdrawals – twice. The Taproot upgrade, which increased the data capacity of Bitcoin blocks, played a crucial role in enabling the Ordinals protocol and subsequently laid the groundwork for BRC-20 tokens. At the moment, the Ordinals protocol is a lot more popular paypal chief executive calls on cryptocurrency industry to collaborate with regulators than the Atomicals protocol, although Atomicals have been gaining some traction. In total, Atomicals protocol transactions have generated around 274 BTC in fees, while Ordinals protocol transactions have generated 4,091 BTC in fees.
In the case of BRC-20 tokens, they are enabled by the Ordinals protocol. Ordinals makes it possible to assign identities to satoshis, which are the base unit of the Bitcoin network – 1 BTC consists of 100 million Satoshis. The Bitcoin ecosystem has taken a fascinating turn thanks to new protocols that make it possible to create custom tokens and even NFTs that function on the Bitcoin network. Wojak is a cryptocurrency project that allows users to explore the world of memes, including buying and selling them through a decentralized network. It was inspired by the iconic Internet meme of the same name in the form of a drawing with a sad man’s face.
This enables fractional ownership, making these assets more accessible to a broader range of investors. The BRC-20 standard started with the Taproot upgrade, which significantly changed Bitcoin in November 2021. It expanded the allowable data capacity in Bitcoin blocks and set the foundation for new innovations like Ordinals. Before this pivotal update, people tried to add a lot of data to the Bitcoin network, but they didn’t have a standard way to do it. Bitcoin Knots (formerly Bitcoin LJR) is an alternative to Bitcoin Core, both allowing network participants to interact with the Bitcoin blockchain. Within the network, passionate debates have ignited regarding the legitimacy of BRC-20 tokens.
Via Rodarmor’s protocol, it’s reasonably easy to inscribe sats with whatever information you need. Again, the project should not be confused with the popular Unisats Wallet and Unisats Exchange, as it does not share utility across these ecosystems. The market for ERC20 tokens is huge, with more than $400bn in value spread across thousands of different tokens and protocols.
That said, there haven’t been other “BRC” numbers as Bitcoin changes actually go through a process called BIP, or Bitcoin Improvement Proposals.
If a buyer is looking to purchase a specific amount of BRC-20 tokens, the buyer needs to find a seller looking to sell the exact amount of tokens they are looking to buy. The introduction of Bitcoin NFTs and BRC-20 tokens has presented significant challenges for the Bitcoin network. This has led to increased transaction volume, higher transaction fees, and substantial backlogs.
