What is BRC20

In blockchain, we usually use the smart contract of Ethereum network to issue tokens. But Bitcoin network does not have this function, so there is BRC20. This thing was invented by @domo, which allows Bitcoin to have tokens.

To put it more simply, the smallest unit of Bitcoin is 1 Satoshi, and 1 Bitcoin is 100 million Satoshis. The BRC20 protocol is a way for you to use 1 Satoshi to issue various tokens, NFTs, domain names, etc.

Imagine that every time you transfer money on the Bitcoin network, you can not only transfer money, but also write something in the notes, just like when you place an order for takeout on Meituan, you fill in the notes.

The same is true for BRC20 tokens. You specify the token name, total amount, and issuance method, and then write the required information in the notes of each satoshi through the BRC20 protocol.

For example, I want to issue a token called AAAA, with a total of 1,000, and the issuance method is deployment. When the user casts the AAAA token, write in the remarks box: "AAAA token, total 1,000, issued by deployment", and then after the casting is completed, you will get the AAAA BRC20 token, also called inscription. The information of these tokens is identified by the indexer, and all systems that support the BRC20 protocol have this thing. It's that simple!

Who is pushing for inscriptions?

To put it bluntly, it’s the major miners.

Especially the mine owners listed on the US stock market.

A dozen years ago, the narrative of Bitcoin was a decentralized payment system.

The narrative of Bitcoin over the past decade has been electronic gold and an inflation buster.

However, as the Bitcoin output rate gradually halved, the miners who originally occupied an important position in the Bitcoin ecosystem have become less and less influential in the ecosystem.

The narrative being fed to Wall Street right now is:

The Bitcoin ecosystem is an important blockchain settlement layer, and miners are the settlement infrastructure!

You should know that in the past few years, more than half of the Bitcoins have remained in wallet addresses without moving.

There is no transaction settlement.

If the income of the mining farm depends only on the rise of Bitcoin, how will Wall Street investors view the valuation of the Bitcoin mining farm? At what multiples should the PE/PS/PB be determined?

Therefore, the mining farm must start transactions in the Bitcoin ecosystem.

You know, even though the inscription ecosystem is so popular and the transaction fees are so expensive, transactions now only account for 25% of the miners' income.

If miners cannot establish the Bitcoin ecosystem, the narrative of the entire mining industry will be affected.

The future of BRC20

At the beginning, the BRC20 token market was full of emotional hype but lacked actual value. As a newcomer to this market, Unisat faced a desolate infrastructure. Users needed 20 points to trade freely in its market, which limited their freedom and prevented users from staying for a long time.

Due to insufficient infrastructure, the market declined rapidly and was questioned. However, after several months of hard work, BRC20 ushered in a recovery. The OKX wallet accounts for 70% of the transaction volume, and there are no restrictions on users, which makes the user experience smoother. OKX joined the ecological construction when the market recovered and achieved remarkable results.

Note: Can I buy inscriptions on other chains?

While Bitcoin miners are working hard to build the ecosystem.

Other main chains have also launched their own inscriptions.

The most essential difference between these inscriptions and BRC20 inscriptions is:

Only the BRC20 inscription is related to the interests of the mine owner!

They will maintain industry order and achieve long-term development.

The main chains of other companies that do not have listed mining companies are essentially the same as Dogecoin because there are no constraints from interested parties.

Well, that’s all for today’s article. I’m Lao K in the cryptocurrency circle, an old investor who sincerely hopes that you can get rich in the cryptocurrency circle!