What is Bitcoin’s BRC-20 Standard?
Reading Time: 2 minutesThe Bitcoin BRC-20 standard has transformed Bitcoin in a matter of weeks
Developers can now build projects on Bitcoin, a development that has split the community
What is BRC-20 and why is there so much debate over it?
Bitcoin’s BRC-20 has taken the world by storm and caused a huge debate within the Bitcoin community, to the point where some developers have sought to ban it entirely. Talk of a hard fork to rid the main chain of tokens using the BRC-20 standard have also been discussed. But what exactly is BRC-20 and why has it kicked up such a fuss? Let’s find out.
Taproot Opens the Door
BRC-20 stands for “Bitcoin Request for Comment 20″ and is an experimental token standard inspired by Ethereum’s ERC-20 standard. BRC-20 allows anyone to create tokens on top of the Bitcoin blockchain by utilizing Bitcoin’s ‘ordinal inscriptions’, which is Bitcoin’s version of smart contracts on Ethereum. The creation of BRC-20 has been possible thanks to an upgrade that took place on the Bitcoin network in 2021 called ‘Taproot’. Taproot allowed smart contracts to be deployed on Bitcoin, allowing it to be used in the same way as Ethereum, which is used for everything from NFTs to DeFi lending platforms.
It has taken a while for developers to make use of Taproot, but this year they have with ‘ordinal inscriptions’, a system which has opened the door for Ethereum-like projects on the ultra-secure Bitcoin blockchain. An Ordinals inscription points to a piece of data on the Bitcoin blockchain, which, unless the Bitcoin blockchain is deleted or destroyed forever, will remain, unlike NFTs that don’t use IPFS.
Evolution or Death Knell?
Many in the Bitcoin community see the development of Ordinals as a great step forward in the growth and potential adoption of Bitcoin, allowing it to be seen as more than just a payment option or store of wealth. However, its launch sent transaction fees rocketing as the blockchain failed to cope with the sudden influx of transactions, leading to nearly half a million getting stuck in the mempool in the first weeks after the launch. This led to a fervent debate as to whether Bitcoin is really suited to such a development, with some developers even going as far as proposing a hard fork to split Ordinals transactions from ‘regular’ ones.
The debate over BRC-20 tokens is the first major debate over Bitcoin’s on-chain scaling limitations since the Bitcoin Cash fork of 2017, but it goes further, hitting at the core of what Bitcoin actually is and what it is for. This is a debate that will go on for as long as BRC-20 tokens are part of the Bitcoin network.
The post What is Bitcoin’s BRC-20 Standard? appeared first on FullyCrypto.
Filed under: Bitcoin - @ June 5, 2023 8:04 am