BRC-20 is the new token standard based on Bitcoin. These tokens are designed to facilitate the creation and transfer of fungible tokens. Introduced in March 2023 by a developer known as Domo, BRC-20 tokens were inspired by Ethereum's ERC-20 tokens but adapted to fit the unique characteristics of the Bitcoin network. Unlike the Ethereum-based ERC-20 tokens, which rely on smart contracts, BRC-20 tokens use a different method to define and manage their functionalities. The "BRC" in BRC-20 stands for "Bitcoin Request for Comment," highlighting their experimental nature within the Bitcoin ecosystem.
One of the primary motivations behind the creation of BRC-20 tokens was to expand the capabilities of the Bitcoin network beyond its traditional use as a digital currency. By leveraging the Ordinals protocol, BRC-20 tokens can inscribe additional data onto individual satoshis, the smallest unit of Bitcoin. This data inscription is achieved using JSON (JavaScript Object Notation), which specifies the token's properties, such as its name, total supply, and minting limits. This approach provides a simpler yet effective way to create and manage tokens on the Bitcoin blockchain.
The introduction of BRC-20 tokens represents a significant innovation for the Bitcoin ecosystem, enabling the issuance of new digital assets and enhancing the network's functionality. Despite being experimental, these tokens have quickly gained popularity, particularly for creating various meme tokens and other digital assets. However, the lack of smart contract support limits their functionality compared to ERC-20 tokens, which can be used in a wide range of decentralized applications and financial services on the Ethereum network.
The creation of BRC-20 tokens was made possible by two significant developments on the Bitcoin network: the Taproot upgrade and the introduction of the Ordinals protocol. The Taproot upgrade, implemented in November 2021, increased the data capacity of Bitcoin blocks, paving the way for more complex data inscriptions. Following this, in January 2023, software engineer Casey Rodarmor introduced the Ordinals protocol, which allowed for the inscription of data onto individual satoshis.
In March 2023, a pseudonymous developer named Domo leveraged the Ordinals protocol to create the BRC-20 token standard. By inscribing JSON data onto satoshis, Domo demonstrated a way to deploy, mint, and transfer fungible tokens on Bitcoin without relying on smart contracts. This innovation marked a significant step in expanding Bitcoin's capabilities and introduced a new era of token creation on the Bitcoin blockchain.
BRC-20 tokens operate by utilizing the Ordinals protocol to inscribe JSON data onto satoshis. This JSON data acts as the defining script for the token, detailing its attributes such as the token name, supply, and minting rules. When a BRC-20 token is created, the JSON data is permanently attached to a specific satoshi, making it a fungible token that can be transferred between users on the Bitcoin network.
The process of creating and transferring BRC-20 tokens involves using a Bitcoin wallet that supports the Ordinals protocol. To mint new BRC-20 tokens, users must inscribe the relevant JSON data onto satoshis using this wallet. Once inscribed, these tokens can be transferred just like regular Bitcoin transactions. However, due to the lack of smart contract support, BRC-20 tokens do not have the same level of programmability and versatility as ERC-20 tokens on Ethereum.
While both ERC-20 and BRC-20 tokens aim to create and manage fungible tokens, they differ significantly in their design, functionality, and underlying blockchain networks.
● Network: Operate on the Ethereum blockchain.
● Smart Contracts: Utilize smart contracts to define and manage token behaviors, allowing for a wide range of functionalities and applications, such as decentralized finance (DeFi) protocols, tokenized assets, and more.
● Flexibility: ERC-20 tokens can interact with other protocols and applications on the Ethereum network, providing extensive programmability and versatility.
● Maturity: Established in 2015 and widely adopted, with numerous tokens created and used in various applications.
● Network: Operate on the Bitcoin blockchain.
● Ordinals Protocol: Use the Ordinals protocol to inscribe JSON data onto satoshis, defining token properties without the need for smart contracts.
● Simplicity: BRC-20 tokens are simpler to create and manage, but this simplicity comes with limitations in functionality.
● Experimental: Introduced in 2023 and still in an experimental phase, with limited adoption and use cases compared to ERC-20 tokens.
In summary, while ERC-20 tokens offer extensive functionality and integration within the Ethereum ecosystem, BRC-20 tokens provide a simpler but more limited approach to creating fungible tokens on the Bitcoin blockchain. Each standard has its strengths and weaknesses, catering to different needs and use cases within the cryptocurrency space.
Buying BRC-20 tokens can be a straightforward process if you follow the right steps. These tokens, which operate on the Bitcoin blockchain, can be used in various applications such as DeFi and NFTs. To get started with purchasing BRC-20 tokens, you need a compatible wallet and access to a platform that supports their trade.
One of the most user-friendly platforms to buy BRC-20 tokens is Bitget Wallet. Bitget Wallet, a leading non-custodial Web3 multi-chain crypto wallet, makes it easy to manage and purchase BRC-20 tokens. With Bitget Wallet, you can seamlessly create or import a wallet, transfer assets, and use Bitget Swap to buy BRC-20 tokens, ensuring a secure and efficient experience.
Discover all you need to know about Bitget Wallet in our latest article: What is Bitget Wallet?