The growth of BRC-20 is surging back strongly in line with the recent upward trend of BTC. This article will provide an overview of the essential characteristics of BRC-20 for you to pay attention to as you prepare for the upcoming bull run season.
What is BRC-20?
BRC-20 (Bitcoin Request for Comment 20) is a token standard trial utilizing Ordinals and Inscriptions, enabling the minting and transfer of fungible tokens on Bitcoin blockchain.
The BRC-20 token standard bears similarities to the ERC-20 token standard on the Ethereum blockchain and EVM. Powered by Ordinals.
In contrast to tokens crafted on EVM blockchains, the BRC-20 standard is simpler. This is due to the fact that generating tokens on the Bitcoin network could result in significant fees if the smart contract’s size becomes too large. Therefore, the BRC-20 standard is essentially a script file with a rule facilitating token transfers between different wallets.
These tokens are brought to blockchain through JSON inscriptions on satoshis via Bitcoin Ordinals. They share traits with smart contract (but BRC-20 is not a smart contract), with the JSON defining the essential features of the BRC-20 token. However, in contrast to smart contracts where conditions can be altered, inscriptions are immutable as they are directly inscribed onto a satoshi, making them, unmodifiable by any party.
In essence, the BRC-20 token is a specific type of token operating on the Bitcoin blockchain. Deployed through JSON files, it empowers users to generate and transfer tokens seamlessly between different wallets.
Creation Process
The BRC-20 standard was created by a Twitter user with the handle @domodata on March 8, 2023, allowing each ordinal wallet to freely create BRC-20 tokens upon deployment. Typically, there’s a limit, and the total mints cannot surpass the overall supply.
Satoshi is the smallest unit of currency on the Bitcoin network (with a ratio of 100 million satoshis = 1 Bitcoin). Each satoshi on the Bitcoin network is sequentially numbered and transferred in this order. This numbering system is referred to as Ordinals. Ordinals identify satoshis as individual units and can tag them with specific data types.
In the 2021 Bitcoin Taproot upgrade, a vulnerability emerged, offering the opportunity to append extra data to each satoshi using the Ordinals protocol. Ordinals essentially turn satoshis into vessels for public data. Interestingly, even with added public data, satoshis retain their normal functionality. This discovery sparked the curiosity of Bitcoin developers, leading to the exploration of new possibilities and the introduction of NFT Ordinals and the BRC-20 token standard.
Comparing BRC-20 to ERC-20
Market Overview of BRC-20 Tokens
At the time of writing, there have been 56.3K BRC-20 tokens created, with a total market cap exceeding 11 billion USD. Among them, the first token formatted as BRC-20 is “ORDI”, with a maximum supply of 21,000,000 $ORDI. Currently, all 21,000,000 $ORDI have been fully minted and are in circulation on the market, boasting a total market capitalization of 1.2 billion USD.
In just 9 months since its emergence, the market capitalization has reached a substantial figure, yet the overall market capitalization of BRC-20 remains relatively small compared to other markets. Additionally, notable tokens like ORDI, SATS have been officially listed on major exchanges such as Binance, Huobi, Bybit,… highlighting the significant potential of this ecosystem.
Guide to Trading BRC-20 Tokens
Mint and Trade on the Blockchain (DEX)
Step 1: Visit the web to create a Unisat wallet.
Creating like with other wallets, remember to securely store the 12-character security phrase!
Step 2: Purchase BTC on exchanges like Binance, MEXC, OKX, Bybit, etc., and then send it to your wallet address as shown below to cover transaction fees (Transaction fees are paid in Bitcoin). Each transaction incurs fees ranging from 5-10 USD $BTC. (Consider buying around 10-20 USD worth of Bitcoin on the exchange and then withdraw it to your wallet for a trial experience).
Note: With the Ordinals wallet, there are multiple addresses (including one for Ordinals storage and one for Bitcoin storage), so remember to transfer BTC to the designated Bitcoin address.
Step 3: Execute minting and trading of BRC-20 tokens.
Visit the website https://brc-20.io/ to select the token you want to trade.
You can click on each project to check additional specific information, helping you make informed trading decisions.
Step 4: Next, access the website https://unisat.io/brc20, then choose the token you want to mint. If a token is marked as “complete 100%”, it means the process is finished, and you cannot mint it anymore!
Here, you can also engage in buying and selling BRC-20 tokens.
Trade on the Exchange (CEX)
For centralized exchanges (CEX), you can access platforms like Binance, OKX, Huobi, etc., for regular trading, similar to other tokens. Currently, only a few BRC-20 tokens like ORDI, SATS are listed on mainstream CEX platforms.
Conclusion
This is a compilation of the most crucial information about BRC-20 tokens to help you prepare for the upcoming bull run season. Remember, this technology is an experimental development, so investors actively involved in the BRC-20 ecosystem should employ risk management strategies to the fullest.
Please note that the content of this article is for educational purposes and not financial advice. It is recommended to conduct your own research (DYOR) for the best outcomes. We hope this article from FMCPay assists you in gaining a better understanding of the workings and execution of transactions with this standard.
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