BRC-20: Explained How does BRC20 token Work and its Uses

Since Satoshi Nakamoto has been long inactive, these sats are also quite scarce. Today, there’s a whole market dedicated just to these rare sats, never mind those with inscriptions. A couple of years later, in January 2023, Casey Rodarmor brought the Bitcoin Ordinals protocol to life. Essentially it allowed the Bitcoin network to support something close to NFTs. The protocol introduced a method of inscribing information,  such as images or text, onto individual Satoshis (the smallest denominations of Bitcoin possible).

What is a BRC-20 token?

A number of BRC-20 tokens have now gathered significant followings and gained traction with large marketcaps and listings on centralised exchanges. You must select the Taproot address as only that will support the Ordinals and BRC-20 tokens for you. With UniSat — a BRC-20-compatible wallet — you can also track the address-specific distribution. Now that we have covered almost every theoretical aspect of BRC-20 tokens let’s explore the concept of tokenization. Like any other token, how how to buy bitcoin with cash in the uk it works or will work depends on how a user can interact with it.

Moreover, the experimental status of these tokens underscores the need for caution and thorough research before diving in. The number of people using Bitcoin wallets increased, especially among collectors. This caused a lot of transactions to pile up and network fees to go up. This data inscribed to satoshis can range from images, video, audio, text, and even entire applications such as a simplified version of the video game DOOM. As we’ll see below, BRC-20 tokens are essentially ordinal inscriptions with a specific type of text embedded into them, providing a set of rules and specifications for creating and managing the tokens. While inscribing text has been a popular early use case for Bitcoin NFTs, due to the nascency of the technology, new use cases may emerge over time.

You can easily buy ERC-20 tokens on exchanges like Binance, UniSwap, and Coinbase, but this isn’t the case for BRC-20 tokens. The BRC-20 is essentially Bitcoin’s version of Ethereum’s ERC-20 tokens, albeit with unique attributes. Fast forward to January 2023, Casey Rodarmor introduced the Bitcoin Ordinals protocol. In simple terms, this protocol allowed users to add information to individual Satoshis, the smallest Bitcoin units.

How BRC-20 Tokens Work

The maximum trading volume is observed on the trading pair WOJAK/USDT, reaching $3 million (87% of the total volume on all exchanges). All current BRC-20 tokens have only three functions embedded in their concept software. Given the risks, it’s crucial you exercise caution when dealing with BRC-20 tokens. Consideration of all factors, both good and bad, should form part of a balanced risk assessment before getting involved. The Bitcoin network uses a proof-of-work system, which requires a lot of computational power for mining. This can lead to environmental concerns and fuel the ongoing debate about the sustainability of these systems.

Understanding BRC-20 tokens

BRC-20 tokens are a significant change from the Ethereum ERC-20 tokens. It stands out because it uses ordinal notations and links tokens to specific satoshis. These links are created through script files that are stored directly in Bitcoin. Instead, it uses ordinal inscriptions to put JSON data into Bitcoin transactions. This makes token deployment, minting, and transfer processes simpler. BRC-20 represents a significant step forward in the evolution of the Bitcoin blockchain, introducing new possibilities for token creation and management.

This means you have at least deployed or minted tokens before coming to the buying market. This 20 UniSat point conundrum was one of the primary reasons for pushing the network bitcoin keeps hitting new highs after tesla backing 2025 prices higher, as each point means one inscription on a Sat or one transaction — which would block some network space. If you notice coins like SHIB and PEPE on the list, do not get overexcited, thinking they are trading at a different price on this BRC-20 blockchain. They are just faux SHIB and PEPE tokens, and the BRC-20 token minters have simply used their names to get them on the Bitcoin network. According to the BRC-20 marketplace, BRC-2-.io, there are already 14,307 tokens in existence. So much for being conservative with the experimental and supposed BRC-20 blockchain standard.

What is BRC-20 and How These Tokens on Bitcoin Work?

And while inscriptions on Sats existed by this stage, Domo planned to inscribe some JSON (JavaScript Object Notation) data onto a Sat, opening the doors to minting new BRC-20 tokens. You can even consider them to be BRC-20 Ordinals as they use the same protocol and follow inscription. The launch of the Ordinals Protocol — a strategy to tag and number satoshis, the smallest unit of bitcoin — laid the groundwork for BRC-20. The process involved padding the Sats or Satoshis with extra data, making them unique — kickstarting a new era of Bitcoin NFTs.

In 2024, Casey Rodarmor launched the Bitcoin Runes protocol as a more efficient way to create fungible Bitcoin assets. While Bitcoin Runes are similar to BRC-20 assets, they are more data and energy-efficient. They don’t create “junk UTXOs” and they store data more immutably too.

As a result, Bitcoin was slower to evolve an ecosystem of alternative assets until the launch of the Ordinals protocol. BRC-20 is an experimental token standard for fungible tokens specifically designed for the Bitcoin blockchain. Fungible tokens are interchangeable, meaning that every unit of the token has the same functionality and intrinsic value.

This familiarity makes it easier for users and businesses to accept and understand them. To store BRC-20 tokens securely, you need a Bitcoin wallet that stores your private keys offline and allows you to interact with these experimental assets. Currently, this is not the easiest feat, but if you want to start managing BRC-20 tokens securely, a great way to do it is by connecting your Ledger device to a BRC-20-compatible third-party wallet. Due to Bitcoin’s PoW mechanism and how the BRC-20 protocol is designed, deploying, minting, and transferring tokens costs a lot of energy. The protocol has also been criticized for creating “junk UTXOs”, meaning the protocol is not as efficient as it could be.

The first-ever BRC-20 created was ORDI, designed as a meme token to show the potential of the new standard. Following ORDI, other BRC-20 meme tokens such as PIZA, PEPE, PUNK, and MEME entered the scene. To buy BRC 20 tokens, ensure you own a Bitcoin Taproot-enabled wallet like UniSat Wallet or Ordinals Wallet. To connect your wallet to a BRC-20-supporting marketplace, it is best to have BTC funds for transaction fees.

To be fair, the Ordinals protocol has benefited from a head start, as it was launched in January of 2023, while the Atomicals protocol was released in September of 2023. We don’t provide services to residents and companies from the UK, the USA, Democratic People’s Republic of Korea (DPRK), Iran, and Myanmar. We use a risk based approach for assessing our potential and current clients, and as a result of assessment some other jurisdictions might be also prohibited. To date, Wojak (WOJAK) is traded on 17 exchanges, including Bitget, LBank, Uniswap (v2) and others.

Wallets and marketplaces, which are essential infrastructure entities, are incorporating BRC-20. This shows how flexible the open-source community’s collaborative efforts are. Domo started a collaboration that shows how an innovative idea can grow with the help of different developers. Tokens such as Pepe tokens, Ordi, and VMPX are created according to the BRC 20 standard.

• One of the recent improvements is the introduction of the BRC-20 token standard.
• The Ordinals protocol, coupled with the Taproot upgrade, has paved the way for fungible tokens on Bitcoin, challenging conventional narratives surrounding the network’s capabilities.
• It stands out because it uses ordinal notations and links tokens to specific satoshis.
• While BRC-20 tokens offer simplicity, compatibility, and security, their limitations underscore the ongoing experimental nature of this standard.

A conventional bitcoin transaction might be measured in kilobytes, while an ordinal inscription – on which a BRC-20 token is layered – can be up to 4MB in size. BRC-20 tokens, despite their youth, will pave a new way for the formation of the meme coin market in the near future. Today’s practical application of blockchain technology enables many ambitious and promising projects, the vast majority of which are different tokens. Meme coins, as they’re often called, are cryptocurrencies inspired by internet memes. They often start as joke projects, but some have attracted serious attention, and indeed, substantial bitcoin futures data at lowest latency launched by quincy data market capitalization. At the time of writing, data from CoinMarketCap shows two meme coins in the top 15 tokens by market capitalization, with a combined value of some $14.8 billion (Dogecoin and Shiba Inu).

• Furthermore, BRC-20’s simplicity allows for easier token creation and management, lowering the barrier to entry for developers and businesses.
• One of the most notable benefits is its integration with the Bitcoin network, which provides unparalleled security and reliability.
• Bitcoin Runes are Lightning network compatible and don’t require Taproot-compatible wallets.
• Unlike ERC-20, BRC-20 is not an approved standard but still in the proposal phase, and unlike ERC-20 tokens, BRC-20 tokens are not easily traded on exchanges at this time.

If you want to explore all of the tokens that have been created using the BRC-20 standard, make sure to take a look at our BRC-20 token list. While BRC-20 tokens offer a variety of innovative possibilities, it’s crucial to remember that they also come with significant risks and potential problems. Companies can utilize BRC-20 tokens to create reward and loyalty programs on the blockchain.