What Is BRC-20 Token? Things To Keep In Mind About This Next Market Trend
Recently a few trends have emerged regarding the BRC-20 tokens created on the Bitcoin network. So what is it, and what basics do you need to master in order to invest in tokens? Let’s find out through the article below.
What is the BRC-20 standard?
BRC-20 (Bitcoin Request for Comment 20) is a technical standard used to issue and deploy tokens on the Bitcoin blockchain, similar to ERC-20 on the Ethereum network. The standard was created by an anonymous Twitter analyst named @domodata in March 2021.
In addition, the BRC-20 uses JSON Ordinal (Ordinal inscription) annotations to implement token contracts, create tokens, and trade tokens. With BRC-20, developers can easily create and trade fungible tokens using the Ordinals platform.
BRC-20 Token
BRC-20 tokens are tokens that comply with the BRC-20 standard. They are stored on the Bitcoin base chain and built with the help of Ordinals and Inscriptions.
Different from the tokens created on the EVM Blockchain that everyone is familiar with, where each token has a different smart contract that allows the creation of other mechanisms and rules. The BRC-20 standard is quite simple when this is just a script file with only one rule to allow token transfers between different wallets.
Simply explain the crudeness of this BRC-20 token standard because storing data on tens of thousands of nodes of the Bitcoin network would cost a lot of money if a token with a complex smart contract files up to several MB in size.
The ease of use and flexibility that the BRC-20 standard offers is perhaps what has attracted the attention of many developers and investors alike. While inspired by Ethereum’s ERC-20, the BRC-20 token standard has some fundamental differences that set it apart.
Difference between BRC-20 and ERC-20
The inspired BRC-20 is based on Ethereum’s ERC-20 token standard. The most fundamental difference between these two standards is their blockchain, and BRC-20 tokens exist on the Bitcoin blockchain, while ERC-20 tokens exist on the Ethereum blockchain. That means some practical differences also emerge.
- Function: The BRC-20 token is not a smart contract, and that is, they cannot interact with other protocols or applications on the Bitcoin network. That gives them much less functionality than ERC-20 tokens, which could indirectly allow users to borrow crypto, lend…
- Storage: These BRC-20 tokens use Ordinals and Inscriptions to create a data storage solution on satoshi, while ERC-20 tokens are derived from the Ethereum protocol. Chances are that any future updates to Bitcoin could render the BRC-20 tokens untradable or even disappear altogether.
The ecosystem of BRC-20 tokens
There were 14,200 BRC-20 tokens created, and the market capitalization reached $610,002,215. In it, the first token to be formatted BRC-20 is “ordi”, with a maximum total supply of 21,000,000 ordi. Currently, 21,000,000 ordi has been minted 100% and is circulating in the market.
In general, the ecosystem of BRC-20 tokens is mostly memecoins, and there have yet to be real active projects. However, with only 2 months of launch, the $ 100 million capitalization figure is enormous compared to this fledgling ecosystem.
In addition, with the launch of BRC-20, the Bitcoin blockchain is seeing a significant increase in the number of transactions and transaction fees, approximately 400,000 transactions per day, a figure that was almost double when this new standard was not released.
How to buy/sell BRC-20 tokens?
To buy or sell BRC-20 tokens, we will need a Bitcoin wallet that supports Taproot and connect it to a supporting exchange. Some centralized exchanges include UniSat and Ordinals Wallet. In addition, some decentralized exchanges like Ordswap also allow P2P exchange of BRC-20 tokens, but the liquidity is much lower. However, having Bitcoin in your wallet would be best to pay any transaction fees.
Conversely, to sell BRC-20 tokens, you can also transfer them to another Bitcoin wallet, auction them on a decentralized exchange, or burn tokens by sending them to an inappropriate address rate.
Currently, there are 5 tools that are supporting BRC-20 including:
- Discord Ordswap: Users can join the Ordswap discord here, when participating in discord, users can freely buy and sell OTC BRC-20 tokens.
- Unisat Wallet: This is the best tool for BRC-20 when it comes to buying and selling tokens as well as observing on-chain transactions of BRC-20.
- Brc-20.io: An on-chain checker for BRC-20. However, it is not possible to trade BRC-20 tokens on this tool.
- To.ki: The tool used to mint BRC-20 tokens.
- Ordspace: A tool to track information and indexes of BRC-20 tokens.
In addition, according to the information of the Ordinals Wallet team, they are in the development stage of a product called brc20.com – an application similar to Uniswat wallet, which can buy and sell BRC-20 and track on-chain.
In this article, I will guide you to use the UniSat wallet to make transactions.
Step 1: Create a Unisat wallet
- Access the convenience store.
- Proceed to create a Bitcoin wallet on Unisat and securely store the characters.
Step 2: Withdraw BTC from your wallet
To transact on the Bitcoin network, everyone is required to need BTC as a fee, so people can buy BTC on centralized exchanges like Binance, OKX, .. then proceed to withdraw to the Unisat wallet just created.
Step 3: Mint BRC-20 tokens
- Visit: https://unisat.io/inscribe
- Select BRC-20 to mint or deploy any token with a transaction fee of about $5 per mint.
Step 4: Buy and sell BRC-20 tokens
- Access: https://unisat.io/market
- Conduct token trading with common currency SATS (Satoshi), with each BTC will equal 100,000,000 SATS.
- In order to buy and sell tokens, everyone needs to reach at least 20 transactions in step 3.
Conclusion
Whether or not to invest in BRC-20 tokens will depend on one’s risk appetite. In fact, as we had seen, when the FOMO increased, many people saw huge profits from these tokens. The majority of BRC-20 tokens have seen price increases of up to thousands of percent in a short time. The case of PEPE coin is a typical example that we cannot fail to mention.
However, in addition to the aura of the explosive profits from BRC-20 tokens, users also need to identify the spirit of facing high risk. Existing BRC-20 tokens are like memecoins because they have yet to have a specific application and have no clear issuance purpose. Therefore, BRC-20 tokens are not considered safe assets to invest in despite the prevailing trend of asset speculation on Bitcoin. It is important to note that while the BRC-20 token standard has introduced a new layer of functionality to the Bitcoin network, it is not a sustainable path as Bitcoin was still maintained and adopted long ago. When the hype subsides, the potential value of the coins will drop significantly, and therefore investing at that time may not be the best option.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Foxy
Coincu News
Author
Uncategorized
What Is BRC-20 Token? Things To Keep In Mind About This Next Market Trend
Recently a few trends have emerged regarding the BRC-20 tokens created on the Bitcoin network. So what is it, and what basics do you need to master in order to invest in tokens? Let’s find out through the article below.
What is the BRC-20 standard?
BRC-20 (Bitcoin Request for Comment 20) is a technical standard used to issue and deploy tokens on the Bitcoin blockchain, similar to ERC-20 on the Ethereum network. The standard was created by an anonymous Twitter analyst named @domodata in March 2021.
In addition, the BRC-20 uses JSON Ordinal (Ordinal inscription) annotations to implement token contracts, create tokens, and trade tokens. With BRC-20, developers can easily create and trade fungible tokens using the Ordinals platform.
BRC-20 Token
BRC-20 tokens are tokens that comply with the BRC-20 standard. They are stored on the Bitcoin base chain and built with the help of Ordinals and Inscriptions.
Different from the tokens created on the EVM Blockchain that everyone is familiar with, where each token has a different smart contract that allows the creation of other mechanisms and rules. The BRC-20 standard is quite simple when this is just a script file with only one rule to allow token transfers between different wallets.
Simply explain the crudeness of this BRC-20 token standard because storing data on tens of thousands of nodes of the Bitcoin network would cost a lot of money if a token with a complex smart contract files up to several MB in size.
The ease of use and flexibility that the BRC-20 standard offers is perhaps what has attracted the attention of many developers and investors alike. While inspired by Ethereum’s ERC-20, the BRC-20 token standard has some fundamental differences that set it apart.
Difference between BRC-20 and ERC-20
The inspired BRC-20 is based on Ethereum’s ERC-20 token standard. The most fundamental difference between these two standards is their blockchain, and BRC-20 tokens exist on the Bitcoin blockchain, while ERC-20 tokens exist on the Ethereum blockchain. That means some practical differences also emerge.
- Function: The BRC-20 token is not a smart contract, and that is, they cannot interact with other protocols or applications on the Bitcoin network. That gives them much less functionality than ERC-20 tokens, which could indirectly allow users to borrow crypto, lend…
- Storage: These BRC-20 tokens use Ordinals and Inscriptions to create a data storage solution on satoshi, while ERC-20 tokens are derived from the Ethereum protocol. Chances are that any future updates to Bitcoin could render the BRC-20 tokens untradable or even disappear altogether.
The ecosystem of BRC-20 tokens
There were 14,200 BRC-20 tokens created, and the market capitalization reached $610,002,215. In it, the first token to be formatted BRC-20 is “ordi”, with a maximum total supply of 21,000,000 ordi. Currently, 21,000,000 ordi has been minted 100% and is circulating in the market.
In general, the ecosystem of BRC-20 tokens is mostly memecoins, and there have yet to be real active projects. However, with only 2 months of launch, the $ 100 million capitalization figure is enormous compared to this fledgling ecosystem.
In addition, with the launch of BRC-20, the Bitcoin blockchain is seeing a significant increase in the number of transactions and transaction fees, approximately 400,000 transactions per day, a figure that was almost double when this new standard was not released.
How to buy/sell BRC-20 tokens?
To buy or sell BRC-20 tokens, we will need a Bitcoin wallet that supports Taproot and connect it to a supporting exchange. Some centralized exchanges include UniSat and Ordinals Wallet. In addition, some decentralized exchanges like Ordswap also allow P2P exchange of BRC-20 tokens, but the liquidity is much lower. However, having Bitcoin in your wallet would be best to pay any transaction fees.
Conversely, to sell BRC-20 tokens, you can also transfer them to another Bitcoin wallet, auction them on a decentralized exchange, or burn tokens by sending them to an inappropriate address rate.
Currently, there are 5 tools that are supporting BRC-20 including:
- Discord Ordswap: Users can join the Ordswap discord here, when participating in discord, users can freely buy and sell OTC BRC-20 tokens.
- Unisat Wallet: This is the best tool for BRC-20 when it comes to buying and selling tokens as well as observing on-chain transactions of BRC-20.
- Brc-20.io: An on-chain checker for BRC-20. However, it is not possible to trade BRC-20 tokens on this tool.
- To.ki: The tool used to mint BRC-20 tokens.
- Ordspace: A tool to track information and indexes of BRC-20 tokens.
In addition, according to the information of the Ordinals Wallet team, they are in the development stage of a product called brc20.com – an application similar to Uniswat wallet, which can buy and sell BRC-20 and track on-chain.
In this article, I will guide you to use the UniSat wallet to make transactions.
Step 1: Create a Unisat wallet
- Access the convenience store.
- Proceed to create a Bitcoin wallet on Unisat and securely store the characters.
Step 2: Withdraw BTC from your wallet
To transact on the Bitcoin network, everyone is required to need BTC as a fee, so people can buy BTC on centralized exchanges like Binance, OKX, .. then proceed to withdraw to the Unisat wallet just created.
Step 3: Mint BRC-20 tokens
- Visit: https://unisat.io/inscribe
- Select BRC-20 to mint or deploy any token with a transaction fee of about $5 per mint.
Step 4: Buy and sell BRC-20 tokens
- Access: https://unisat.io/market
- Conduct token trading with common currency SATS (Satoshi), with each BTC will equal 100,000,000 SATS.
- In order to buy and sell tokens, everyone needs to reach at least 20 transactions in step 3.
Conclusion
Whether or not to invest in BRC-20 tokens will depend on one’s risk appetite. In fact, as we had seen, when the FOMO increased, many people saw huge profits from these tokens. The majority of BRC-20 tokens have seen price increases of up to thousands of percent in a short time. The case of PEPE coin is a typical example that we cannot fail to mention.
However, in addition to the aura of the explosive profits from BRC-20 tokens, users also need to identify the spirit of facing high risk. Existing BRC-20 tokens are like memecoins because they have yet to have a specific application and have no clear issuance purpose. Therefore, BRC-20 tokens are not considered safe assets to invest in despite the prevailing trend of asset speculation on Bitcoin. It is important to note that while the BRC-20 token standard has introduced a new layer of functionality to the Bitcoin network, it is not a sustainable path as Bitcoin was still maintained and adopted long ago. When the hype subsides, the potential value of the coins will drop significantly, and therefore investing at that time may not be the best option.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Foxy
Coincu News
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