BRC-20 Standard

The BRC-20 token standard is an experimental fungible token standard for Bitcoin created by Twitter user, @domodata on March 8th, 2023.

It utilizes Ordinal inscriptions of JSON data to deploy token contracts, mint tokens, and transfer tokens.

You may explore current BRC-20 Tokens Here.

First BRC-20 Token (ordi)

The first token contract deployed was for the “ordi” token, with a limit of 1,000 tokens per mint and 21,000,000 tokens total.

{ 
  "p": "brc-20",
  "op": "deploy",
  "tick": "ordi",
  "max": "21000000",
  "lim": "1000"
}

Introduction:

  • Brief description of brc-20 Standard: brc-20 is an experimental standard that demonstrates that you can create fungible tokens on layer 1 Bitcoin by leveraging ordinal theory and inscriptions.

  • Historical context or background: Originating from a fun Dune dashboard concept and inspired by .sats names, brc-20 tokens were introduced in March 2023. Since then, they’ve constituted about 3% of all Bitcoin transactions, garnered a user base of 250,000, and achieved over $150m in on-chain and $3b in off-chain volume.

Key Features:

  1. Primary Function: brc-20 facilitates the creation, minting, and transacting of fungible tokens on the Bitcoin blockchain.

  2. Technical Specifications: You can view the technical details in the original documentation 10. For an in-depth look, please refer to Unisat 7 and BestInSlot 7.

  3. Interoperability: The brc-20 standard naturally integrates with ordinal and inscription systems. At present, it’s capable of interfacing with other Bitcoin standards and layer 1 chains such as Ethereum, Stacks, and more, using bridging, vaulting, or wrapping. The modular approach proposed here 3 aims to simplify this process further and pave the way for integration with systems like the Lightning Network.

  4. Security Measures: By operating on layer 1 Bitcoin, brc-20 tokens inherit its proven security mechanisms. More specifically, double spend is prevented by binding transferable balances to a single satoshi.

Characteristics:

  • Design akin to composable semi-fungible assets.

  • Simplicity core to every design decision, easy to understand

  • Accessible to anyone with a Bitcoin wallet, via inscription tools

  • Employs Bitcoin principles via ‘first is first’, fair and open minting mechanism

  • No need for complex and expensive utxo management

  • Unique tickers to reduce scams and establish digital namespace

  • Can leverage PSBT’s for trading and other mechanisms

  • Account based model opens flexibility for use cases beyond layer 1 Bitcoin

  • Diverse and independent indexing pool

Use Cases:

  • Fun: People are having fun on Bitcoin again.

  • Asset Issuance: brc-20 tokens can serve as digital representations of assets, rights, or other fungible entities. These can range from stablecoins and utility tokens to meme-based tokens.

  • dApp Integration: Developers can integrate brc-20 tokens into decentralized applications that leverage the Bitcoin network. Their applications stretch from yield generation and collateralized loans to staking.

  • Tokenization: The brc-20 standard facilitates the tokenization of any asset or right, unlocking a wealth of possibilities, such as token-gated communities or DAO voting.

  • Exchange Mechanism: brc-20 tokens are readily exchangeable and tradable on layer 1 Bitcoin network via various platforms. While they’re currently accessible via order books, integration into liquidity pool swaps is on the near horizon.

How it Compares to Other Standards:

  • The most widely adopted fungible standard on Bitcoin

  • Interaction is possible without a dedicated wallet feature. Using inscription tools, all that’s needed is a Bitcoin wallet.

  • brc-20’s immutable inscriptions provide a unique approach compared to mutable smart contracts on other platforms.

  • Its account based model reduces complexity, making it more cost-effective than utxo-based fungible token standards that offer fair mint distributions.

  • The simplicity makes it the the easiest fungible standard to understand, access, and use on Bitcoin

  • Legibility; no encoding or hashing system is used.

  • Its distribution is characterized by open and free minting without prior announcements or pre-mines, ensuring provable fairness. Replicating this in future standards will be challenging.

  • Exclusive tickers minimize the risk of scams and misinterpretations.

  • As it doesn’t rely on utxo’s, the standard can integrate with systems beyond Bitcoin.

  • Does not rely on a singular indexing truth. Instead, a diverse pool of indexers validates a consistent truth or state.

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