BRC-20
BRC-20 is an experimental token standard for issuing fungible tokens on the Bitcoin blockchain using the Ordinals protocol. It inscribes JSON-formatted text into individual satoshis to define token deployments, mints, and transfers.
✦ Key Insight
BRC-20 unlocked a new category of on-chain trading on Bitcoin itself, drawing significant fees and attention to the base layer. For traders, it created a new market segment with very different mechanics from Ethereum-based ERC-20s.
✕ Common Misconceptions
Treating BRC-20 like ERC-20 — there is no native smart contract enforcement, only off-chain indexer consensus.
Sending BRC-20 transfer inscriptions to an address that does not support them and losing the balance.
Underestimating Bitcoin transaction fees during mint frenzies.
Detailed Explanation
How It Works: A user inscribes a "deploy" operation defining the ticker and max supply. Subsequent inscribers can mint tokens by inscribing "mint" operations until the cap is reached. Transfers require a two-step inscribe-then-send process. Indexers off-chain interpret these inscriptions to track balances since Bitcoin script cannot natively enforce them.
FAQs:
Is BRC-20 the official Bitcoin token standard? No. It is an experimental community standard; Runes is a newer, more efficient alternative.
Why are fees so high to mint? Each operation is a separate Bitcoin transaction competing for block space.
In Practice
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