BRC-20
Last updated
Last updated
The BRC-20 standard is an experimental token standard introduced on the Bitcoin blockchain, which was created to address some of the issues that arose due to a halt in Bitcoin transactions in May 2023. It was introduced by an anonymous developer named Domo and is inspired by Ethereum's ERC-20 protocol, which is a widely-used standard for creating tokens on the Ethereum blockchain.
BRC-20 tokens are similar to ERC-20 tokens in terms of being fungible tokens, but there are notable differences. Unlike ERC-20 tokens, BRC-20 tokens do not have smart contract functionality. They are specific to the Bitcoin blockchain and utilize ordinals, which are serial numbers inscribed onto satoshis (the smallest unit of Bitcoin), to verify ownership and prevent double-spending.
BRC-20 tokens allow users to trade fungible assets using the Ordinals protocol, which involves inscribing data on satoshis. This has led to an increase in demand for block space and has financially benefited miners. However, it is also worth noting that the creation and transfer of BRC-20 tokens require more space on the blockchain, which can lead to higher transaction fees and network congestion.
Despite this, BRC-20 tokens have been gaining popularity and have reached a significant market capitalization, with various tokens such as Pepe Coin (PEPE), ordi, pepe, piza, meme, and moon gaining prominence.
The BRC-20 standard represents an attempt to bring tokenization to the Bitcoin blockchain, inspired by the success of Ethereum's ERC-20 standard. It has the potential to revolutionize Bitcoin and may find application in the DeFi (Decentralized Finance) industry.
