BRC-20s remain an increasingly popular topic in the cryptocurrency world, especially among Bitcoin investors. But what are they and why are they generating so much interest?
What is BRC-20?
BRC-20 is an experimental token standard designed specifically for the Bitcoin blockchain. It allows Bitcoin-based tokens to be created, transferred, and stored using text data recorded in transactions using Ordinals technology. BRC-20 tokens differ from standard ERC-20 tokens on Ethereum, which operate not on the basis of smart contracts, but on the basis of metadata recorded on the Bitcoin blockchain.
This standard was developed in 2023 and has already become a tool for creating meme tokens, experimental assets, and new financial applications on Bitcoin.
How do BRC-20 tokens work?
Token Creation: Developers create tokens by writing text data to the Bitcoin blockchain. This can be done through special wallets that support Ordinals technology.
Buying and selling: Specialized platforms and markets are selected to buy or sell BRC-20 tokens.
Storage: Tokens are stored in wallets that support Ordinals, such as Ordinals Wallet or Xverse.
What is their value?
Innovation for Bitcoin: This is a new way to use the Bitcoin blockchain, which was previously limited mainly to storage and transmission $BTC .
Simplicity: BRC-20s do not require complex smart contracts, making them easier to implement.
Meme tokens: Many of these tokens are memes, which is attracting attention from the community and traders.
Limitation:
Network Upload: Increased use of BRC-20 could lead to increased fees on the Bitcoin network.
Lack of flexibility: Without smart contracts, the possibilities of using tokens are limited.
How to use BRC-20 tokens?
Choose a wallet: Download a wallet that supports Ordinals, such as Ordinals Wallet.
Add Bitcoin: Transfer Bitcoin to your wallet to have funds to buy tokens and pay fees.
Select a token: Select a token on the market, for example, $ORDI which became one of the first and most popular BRC-20 tokens, or $1000SATS and others.
Buy and Store: Purchase a token and store it in your wallet.
Conclusion
BRC-20 is an interesting experiment in the world of cryptocurrencies that opens up new possibilities for Bitcoin. Although they do not yet have widespread practical applications, their popularity among investors speaks volumes about their potential. If you want to try something new in cryptocurrencies, BRC-20 could be a good choice to explore.
