Getting To Know BRC-20: New Token Standards On Bitcoin Network

JAKARTA Bitcoin has always been a major spotlight in the crypto world. However, along with its development, new protocols emerged that should be considered: BRC-20 Tokens. What exactly is BRC-20 and how is its history?

BRC-20 is a new token standard in the world of Bitcoin that allows the creation of digital tokens, similar to those on the Ethereum network. Introduced in March 2023, BRC-20 took advantage of the so-called ordinate inscriptions'' technology upgraded by Bitcoin via the Taproot update in November 2021.

With BRC-20, every satoshi, or smallest unit of Bitcoin, can be given a certain serial number and data that makes it a unique asset. This means that these satoshi-satoshi can be used as transferable tokens that have their own value.

Although BRC-20 is inspired by ERC-20 in Ethereum, there are significant differences. BRC-20 does not use smart contracts, so its functionality is more limited. Currently, the use of BRC-20 is limited to creating, spreading, and transferring tokens only.

The use of BRC-20 is still in the experimental stage and has not become an approved standard. These tokens are also not widely traded on crypto exchanges. However, the presence of BRC-20 shows the potential for growth and innovation in the Bitcoin network, although there are still some challenges that must be overcome.

BRC-20 tokens are bitcoin assets that can be exchanged using the experimental BRC-20 protocol. In simpler language, the BRC-20 token is an identical and exchangeable digital asset. For example, you have a physical coin. If you exchange it for the same coin, the value of your asset remains the same, even though it is not the same coin. This is the core of your ability; you can exchange one for an identical version.

You may often encounter tokens that can be exchanged using decentralized applications. However, the Bitcoin network does not support complex smart contracts that allow this kind of application. As a result, Bitcoin is slower in developing alternative asset ecosystems to the launch of the Ordinary protocol.

In November 2021, Bitcoin experienced an update called Taproot. This increase expands the amount of data allowed in the Bitcoin block and opens the door to new capabilities. A few years later, in January 2023, Casey Rodarmor introduced the Bitcoin Ordinary protocol.

This protocol allows information recording, such as images or text, to each Satoshi (the smallest possible Bitcoin nomination). Each Satoshi has serial numbers based on mining sequences on the Bitcoin blockchain, providing an ordinal number for each Satoshi. Thus, you can track his history.

BRC-20 protocol, built under the Ordinary protocol by Bitcoin developer Domodo (@domodata), allows you to issue your currency on the first and most popular Bitcoin blockchain. The trial protocol was launched in March 2023 and has since seen a lot of success.

The BRC-20 protocol builds basic technologies from the Ordinary protocol. This makes it easy to attach additional data (such as text, images, or audio) to a Satoshi one. BRC-20 Tokens are basically Ordinarys equipped with certain standard information, allowing you to implement, generate, and transfer tokens on Bitcoin networks.