📝 BRC-20, a novel token standard in the Bitcoin ecosystem, introduces additional use cases to the Bitcoin blockchain, allowing fungible tokens’ transfer and minting via the Bitcoin ordinal protocol.🚀 BRC-20 tokens, similar to Ethereum’s ERC-20 tokens, can now be hosted on Bitcoin’s blockchain. Domo, a pseudonymous programmer, created this standard and the first token, Ordi. Other tokens, mainly meme tokens, have followed, pushing the total market cap of BRC-20 tokens over $424 million.🎉
The creation of BRC-20 tokens capitalizes on Bitcoin Ordinal and Bitcoin Taproot, marking individual satoshis with token-specific information. BRC-20 tokens, like other blockchain tokens, function using JavaScript Object Notation (JSON) data, however, their early stage brings limitations due to the lack of supportive tools and interfaces.đź”’
Contrary to ERC-20, BRC-20 tokens rely on Bitcoin’s blockchain, involve multiple wallets for token minting, and use proof of work (PoW) for validating transactions. BRC-20 transactions also need approval at both the network and protocol levels.💻
BRC-20’s features include enabling Decentralized Finance (DeFi) projects on the Bitcoin network, enabling tokenization of real-world assets, and supporting Peer-to-Peer (P2P) transactions. BRC-20 tokens have the potential to provide Bitcoin with more use cases, offer miners more earning potential, and streamline token launching. However, they face limitations such as complex interaction processes, limited flexibility, potential scalability issues, and lack of interoperability with other blockchains. Despite these, BRC-20 is a significant innovation and is set to bring more exciting developments to Bitcoin’s blockchain.💥
To dive deeper, check out the complete article: https://droomdroom.com/a-comprehensive-guide-to-brc-20-tokens/
