It’s a new token standard that allows the creation and transfer of interchangeable tokens using the Ordinals protocol on the Bitcoin blockchain. It’s an answer to the title “What is BRC-20?”
BRC-20 tokens have distinct mechanisms and functions, inspired by Ethereum‘s ERC-20 tokens. Although they became highly popular in the first half of 2023, it’s important to note that they are still in the experimental phase. Users should be extremely cautious when dealing with them.
How Were BRC-20 Tokens Created?
They have distinct mechanisms and functions, inspired by Ethereum’s ERC-20 tokens. Although they became highly popular in the first half of 2023, it’s important to note that they are still in the experimental phase. Users should be extremely cautious when dealing with them.
The initial BRC-20 token released was named “ordi.” Bitcoin wallets promptly added features to back BRC-20 tokens. Several other BRC-20 tokens, including meme tokens, were introduced in the following months. By May 2023, certain BRC-20 tokens saw massive price hikes and reached substantial market capitalizations. The desire for BRC-20 tokens led to a rise in Bitcoin transaction fees and created congestion on the Bitcoin network.
How It Works?
Understanding Bitcoin Ordinals is crucial for comprehending BRC-20 tokens. The Ordinals protocol assigns numbers to satoshis and enables users to add additional information to satoshis through “inscription.”
They use JSON Ordinals to set up token contracts, create new tokens, and move tokens around. This standard lets you make a new its, generate more tokens, and send tokens to others.
This standard is fresh, but deploying, minting, and transferring they can be challenging. Additionally, there are only a few tools and services available for support.
Risks of Them
Programmers are currently experimenting with the BRC-20 token standard to make Bitcoin more fungible. Since it’s still in the testing phase, there’s a possibility of things going awry.
They are currently not very useful, despite the excitement surrounding them. The future of these tokens is uncertain. Since it’s easy to create, many of them may not hold much value. It’s important for users and investors to be careful and do thorough research before getting involved with this new token.