BRC-20 Tokens

BRC-20 is an experimental token standard that enables the minting and transferring of fungible tokens via the Ordinals protocol on the Bitcoin blockchain. 

How Were BRC-20 Tokens Created?

How Do BRC-20 Tokens Work?

BRC-20 tokens utilize Ordinals inscriptions of JSON (JavaScript Object Notation) data to deploy token contracts, mint, and transfer tokens. Currently, the BRC-20 token standard allows creating a BRC-20 token with the deploy function, minting an amount of BRC-20 tokens with the mint function, and transferring an amount of BRC-20 tokens via the transfer function.

The BRC-20 token standard is new and the process of deploying, minting, and transferring BRC-20 tokens isn't user-friendly. There are also a limited number of tooling and supporting services.

Differences Between BRC-20 and ERC-20 Tokens

Despite the similarity in their names, there are significant differences between the two tokens.

ERC-20 is a mature token standard with a massive number of ERC-20 tokens already created and widely used. Conceived in 2015 and officially recognized in 2017, ERC-20 tokens have been battle-tested and proven to function stably. That's not the case with BRC-20 tokens, whose future has a high degree of uncertainty.

Risks of BRC-20 Tokens

The BRC-20 token standard is currently an experiment by programmers to facilitate fungibility on the Bitcoin blockchain. As it's still being tested, many things could go wrong.

Despite the hype, BRC-20 tokens have little utility at present. The outlook is also highly questionable. Due to the ease of minting BRC-20 tokens, it's possible that most could end up being worthless. Users and investors should be cautious and conduct proper research before engaging with this new token type.