What Is BRC20?
The BRC-20 "token standard" represents an experimental approach to fungible tokens on the Bitcoin base chain, utilizing Ordinals and Inscriptions for creation and storage. Unlike conventional token standards on EVM chains, which involve smart contracts managing token rules, BRC-20 employs Ordinal inscriptions of JSON data for deploying token contracts, minting tokens, and facilitating transfers.
Introduced by Twitter user @domodata on March 8th, 2023, the term is a playful nod to Ethereum's ERC-20 standard, despite lacking the capacity to interact with smart contracts. While various chains offer token creation methods, each with its markets and exchanges, the token market, prone to speculation and scams, raises concerns about potential behavior migration to Bitcoin.
This influx, driven by the allure of the familiar ERC-20 term, might spur demand for bitcoin but risks drawing unsuspecting investors into acquiring tokens with limited utility. Acknowledging the creator's disclaimer that it's an experiment and the tokens are not intended to hold value, some speculative participants may perceive it differently.
Simplified Example
Let's imagine a simplified example of a BRC20 token called "BitToken" created on the Bitcoin blockchain using the Ordinals protocol.
Token Creation: A developer deploys the BitToken smart contract on the Bitcoin blockchain, specifying the total supply of tokens and other parameters. This contract utilizes the Ordinals protocol for data storage.
Fungibility: BitToken is designed to be fungible, meaning each BitToken is indistinguishable and can be exchanged on a one-to-one basis. This fungibility allows BitTokens to function as a medium of exchange, much like physical currency.
Transactions: Users can now transfer BitTokens between Bitcoin addresses. For example, if Alice wants to send 5 BitTokens to Bob, she initiates a transaction using a compatible wallet, and the Bitcoin network records this transfer through the Ordinals protocol.
Data Storage: The Ordinals protocol enables the storage of additional data related to BitToken transactions on the Bitcoin blockchain. This data might include details such as transaction history or token ownership changes.
Experimental Nature: It's important to note that this example is simplified, and the concept of BRC20 tokens is currently experimental. Developers are exploring ways to enhance the features and capabilities of tokens on the Bitcoin blockchain using the Ordinals protocol.
Who Invented the BRC20?
In November 2017, the term "BRC20" made its initial appearance in a GitHub pull request submitted by Fabian Vogelsteller, where he introduced the ERC20 token standard. The exact origin of the term remains uncertain, as it is unclear whether Vogelsteller coined it himself or if it was already in circulation.
While the "BRC" prefix is thought to signify "Bitcoin Request for Comments," akin to Ethereum's "ERC20" token standard, some speculate that it might alternatively represent "Blockchain Request for Comments" or a similar concept. Despite its murky beginnings, "BRC20" swiftly gained prominence within the Ethereum community, spreading through online forums, articles, and developer documentation, and ultimately establishing itself as the informal designation for the ERC20 token standard.
Examples
ORDI: Ordi was the first BRC-20 token created by Domo on March 8, 2023. It has a maximum supply of 21 million tokens that have all been minted. As of this writing, Ordi’s price is $7.6, and its market cap is $160,628,051. Ordi trades on 17 markets, including Gate.io, OKX, Crypto.com, Kucoin, BitMart, Unisat, and Bitget.
OXBT: OXBT is a BRC-20 token generated on May 11, 2023, by a team of pseudonymous individuals. The token has a maximum supply of 200 million tokens that are currently 100% minted. At the time of writing, the price of OXBT was $0.08, and its market cap was $16,773,993. OXBT presently trades on AscendEX, previously BitMax, and ALEX.
PEPE: Pepe BRC-20 was established on March 9, 2023, by a pseudonymous team. The meme coin has a maximum supply of 42,069,000 tokens that have been 100% minted. As of writing this article, Pepe’s price was $0.05, and its market cap was $2,199,016. Pepe BRC-20 trades on five markets, including BitMart, Gate.io, Bitget, NovaDAX, and BingX.