BRC-20 Tokens: The Next Big Thing in Crypto?
Are you curious about BRC-20 tokens which have recently become the latest buzz in the cryptocurrency world? Read on to learn more about it!
What is BRC-20?
BRC-20 token standard is a newly developed fungible token that leverages the Ordinals protocol to encode data onto the Bitcoin network. The experimental token was created on March 8, 2023, by a pseudonymous on-chain analyst named Domo to facilitate token issuance and transfer on the Bitcoin blockchain.
BRC-20 tokens came a few weeks after the launch of the Ordinals Protocol, allowing the creation of digital assets in the form of text, images, audio, or video to be traded or swapped like any other token on the peer-to-peer Bitcoin network. This new innovation introduces non-fungible tokens to the Bitcoin network, obstructing the network and presenting an intriguing use case on the Bitcoin blockchain.
Is BRC-20 the same as ERC-20?
Although it sounds similar to the popular ERC-20 standard, BRC-20 standard lack the capacity to interact with smart contracts. They are issued on the Bitcoin network and are protected by Bitcoin’s proof-of-work security mechanism rather than Ethereum’s proof-of-stake security mechanism.
In addition, BRC-20 tokens have fewer “bells and whistles” than Ethereum-based ERC-tokens, as they cannot be used in other applications such as decentralised exchanges, borrowing, lending protocols, and so on.
Some of the popular platforms that have been launched to cater to the growing demand for BRC-20 tokens include:
- BRC-20.io – provides price and market cap data for BRC-20 tokens
- Ordinals Wallet – added support for BRC20 tokens, enabling users to find verified tokens, sort them by the lowest price per token, and purchase them with ease
- UniSat – serves as a trading market for the respective tokens
According to the latest data from Ordspace on May 3, the market capitalization of all BRC-20 tokens combined has reached $126,861,280.406. This new development is a significant breakthrough as it allows for the creation of fungible digital assets on the Bitcoin blockchain, potentially impacting the Bitcoin NFT market.
Despite the surge in interest in the BRC-20 token standard, along with the exploding market cap, it is important to note that they are still in the experimental stage, contains many flaws and have encountered some issues. For instance, on April 23, 2023, the UniSat wallet, which holds BRC-20 tokens, was compromised. However, the affected users were able to receive their funds back.