Inscription

What Are Inscriptions in Crypto?

Inscription, initially implemented on the Bitcoin network, is a groundbreaking development in the blockchain space. It involves embedding information within the smallest unit of Bitcoin, the satoshi, enabling the creation of unique digital assets similar to Non-Fungible Tokens (NFTs). What sets inscription apart is its capacity to store all associated data directly on the blockchain, ensuring the longevity and immutability of the data. This offers a secure and permanent platform for the creation and display of digital artwork and other forms of digital artifacts.

In 2023, interest in inscription surged, leading to its adoption on Ethereum and other EVM-compatible blockchains such as BNB chain, Polygon, and Avalanche. This growth was supported by the development and use of protocols like Ordinals and the BRC-20 token standard, which facilitated the embedding of various forms of content, including text, images, and videos, directly onto the blockchain. Inscription has expanded the utility and application of blockchain technology, paving the way for a new class of digital assets securely and permanently recorded on the blockchain.

How Bitcoin Inscriptions Work

When a Bitcoin user conducts a transaction, they have the option to include additional data as inscriptions. This metadata becomes an indelible part of the transaction, permanently stored on the decentralized public ledger of the Bitcoin blockchain.

The act of inscribing satoshis enables the creation of distinctive, non-fungible "digital artifacts" through a numbering system called the Ordinal Theory. The development of blockchain inscriptions is intricately linked to the Bitcoin Ordinals protocol, which utilizes the Ordinal Theory to allocate numbers to each satoshi based on their mining order.

What Is BRC-20?

The BRC-20 token standard, introduced in early 2023 by an anonymous blockchain developer named Domo, represents a significant advancement in the world of cryptocurrency tokenization. Unlike traditional standards like ERC-20 on Ethereum, BRC-20 leverages Bitcoin's blockchain properties, particularly the ordinals protocol, to create a new class of fungible tokens. Instead of relying on smart contracts, BRC-20 uses ordinal inscriptions to encode data, including JSON code, images, and text, onto individual satoshis. These inscribed satoshis, or ordinals, are inherently nonfungible, each carrying unique attributes and data.

Inscriptions and BRC-20 tokens serve different purposes. Inscriptions are added metadata, while BRC-20 tokens are a specific type of inscription used to represent fungible tokens on the Bitcoin blockchain.

The Future of Inscription

The advancement of Inscription technology in the blockchain domain marks a significant development with far-reaching implications. Innovations like the BRC-20 token standard have revolutionized the potential within the blockchain, paving the way for new possibilities in embedding, storing, and exchanging data and value on a digital ledger.