Bitcoin 20

Comment

Author: Admin | 2025-04-28

The BRC-20 token standard is an experimental framework modeled on the ERC-20 Ethereum token standard that brings fungible tokens to the Bitcoin network. BRC-20 was created in March, 2023, and operates by way using the Bitcoin Ordinals protocol for the creation and transfer of fungible tokens.What is a Token Standard?Token standards are the rulebook by which a token operates on a given blockchain network. Token standards are a subset of smart contract standards, which represent the rules that a given smart contract must follow to operate on and remain fully compatible with the underlying network. Origins of the BRC-20 Token StandardThe BRC-20 token standard can trace its roots to Ethereum’s ERC-20 token standard, which allows for the creation and distribution of fungible assets. However, BRC-20 differs from the ERC-20 protocol in that it uses Ordinals inscriptions rather than smart contracts.The BRC-20 standard was first developed in March, 2023 by a blockchain analyst going by the name of Domo, who originally called the token standard a “fun experiment” on bringing fungible assets to the Bitcoin network.How BRC-20 Tokens WorkBRC-20 tokens use Ordinals protocol inscriptions to mint new fungible assets on individual satoshis (sats), allowing users to create unique tokens with specific properties. Each new user-created variety of token will have its own parameters, and every token meeting that set of specific parameters will be fungible, meaning Alice’s token will be the same as Bob’s much like Alice’s $1 bill would be the same as Bob’s $1 bill. Advantages and Disadvantages of the BRC-20 Token StandardPros of the BRC-20 token standardBRC-20 allows for the creation of new and unique fungible assets on the Bitcoin network via the Ordinals protocolLeverages the security features of the Bitcoin networkA unique experiment that could become a high-growth area of the wider Bitcoin network ecosystem as users gain familiaritySimple minting and transaction Cons of the BRC-20 token standardBRC-20 has no smart contract functionality Limited to the Bitcoin network and ecosystemMay not be compatible with all Bitcoin walletsRelatively small developer footprint within the Bitcoin ecosystemBRC-20 transactions can increase congestion on the Bitcoin network, leading to slower speeds and higher feesHow Does the BRC-20 Standard Affect the Bitcoin Blockchain?BRC-20 expands the functionality of the Bitcoin network by introducing the ability to create customizable and fungible assets.BRC-20 is not a fork of the Bitcoin blockchain, nor does it require the use of Layer 2 protocols like the Lightning Network. It

Add Comment