Understanding BRC-20

What is BRC-20?

BRC-20 is a token standard developed from experimental results on the Bitcoin ordinal network. Tokens on this network implement token contracts, token mints, and token transfers using artifacts in ordinal JSON data.

Along with the ongoing memecoin trend, this type of token has been the talk of the crypto space.

The BRC-20 token standard is created with Ordinals and Inscriptions and is stored on the Bitcoin underlying network. As a result, the creation of the Ordinals protocol, which allows users to write any file on-chain in Bitcoins, gave rise to this token standard.

BRC-20 is simply a method of storing a script file in Bitcoins and then using that file to assign tokens to satoshis and allow them to pass from one user to another.

STORAGE

These tokens use ordinals and artifacts to store data on satoshis, whereas native ERC-20 tokens are stored on the Ethereum protocol. As a result, when Bitcoin is updated, it is not impossible that the BRC-20 token will become untradable or even disappear entirely.

UTILITY

The BRC-20 token is experimental, and it has issues that have long plagued the Bitcoin network. Users may encounter scalability issues due to the relatively high transaction fees. Each Bitcoin "block" is also approved in about 10 minutes, which means that multiple transfer functions can be written to the same block. The order of confirmation must then be used to determine validity.

That's how BRC-20 is explained. As a new token standard, it's important to remember that this token is still in its early stages of development, so there will be plenty of trial and error along the way.