The post What Are BRC-20 Tokens? An Introduction appeared on BitcoinEthereumNews.com.

Introduction BRC-20 tokens are an experimental and inefficient token standard designed for creating fungible tokens on the Bitcoin blockchain. Inspired by Ethereum’s ERC-20 tokens, BRC-20 tokens leverage the Bitcoin Ordinals protocol to inscribe data onto individual satoshis, making them transferable and tradable. Origins of BRC-20 Tokens The BRC-20 token standard was introduced by a pseudonymous developer named Domo in March 2023. This development came shortly after the launch of the Bitcoin Ordinals protocol in January 2023 by Casey Rodarmor, which allowed users to inscribe data onto individual satoshis, enabling the creation of NFTs on the Bitcoin blockchain. The first BRC-20 token deployed was “ordi,” which quickly gained popularity and led to the creation of numerous other BRC-20 tokens. The introduction of BRC-20 tokens aimed to bring the flexibility of fungible tokens to the Bitcoin network, similar to how ERC-20 tokens expanded the Ethereum ecosystem. However, BRC-20 tokens differ significantly from their Ethereum counterparts in terms of functionality and implementation. How BRC-20 Tokens Work BRC-20 tokens use the Ordinals protocol to inscribe JSON data onto satoshis. This data defines the token’s properties and functions, such as deployment, minting, and transfer. Unlike ERC-20 tokens on Ethereum, BRC-20 tokens do not use smart contracts, making their functionality more limited. However, their simplicity allows for easier asset tokenization on the Bitcoin network. Deployment and Minting: The process begins with deploying a token by inscribing its properties onto a satoshi. Once deployed, tokens can be minted in specified quantities and transferred between users through Bitcoin transactions. The JSON data includes details such as the token’s name, maximum supply, and minting conditions. Token Transfer: Transferring BRC-20 tokens involves creating a new inscription that specifies the transfer details. This inscription is then included in a Bitcoin transaction, making the transfer immutable and verifiable on the blockchain. Pros…

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Filed under: News - @ February 22, 2025 10:11 pm