What is BRC-20

BRC-20 is an experimental fungible token standard using ordinal inscriptions on Bitcoin.

On March 9, 2023, an anonymous developer named domo launched BRC-20 tokens. These tokens are built on Bitcoin and use an experimental standard to create fungible tokens.

Unlike popular token standards on EVM blockchains, BRC-20 tokens do not rely on smart contracts. Instead, users can store a script file on Bitcoin and use it to assign tokens to individual satoshis using Ordinal Theory.

BRC-20 tokens utilize JSON data embedded in ordinal inscriptions, allowing for token deployment, minting, and transfer.

“This is just a fun experimental standard demonstrating that you can create off-chain
 balance states with inscriptions. It by no means should be considered THE standard 
 for fungibility on bitcoin with ordinals, as I believe there are almost certainly better
 design choices and optimization improvements to be made.”


—domo

The initial BRC-20 tokens included JSON data specifying the token's name, a minting limit of 1,000 tokens, and a maximum total supply of 21 million tokens.

{ 
  "p": "brc-20",
  "op": "deploy",
  "tick": "ordi",
  "max": "21000000",
  "lim": "1000"
}

How it works

• Experiment to see if ordinal theory can facilitate fungibility on bitcoin
• Create a brc-20 with the deploy function
• Mint an amount of brc-20's with the mint function
• Transfer an amount of brc-20's with the transfer function.

brc-20 balance state can be found by aggregating all of these function's activity together. BRC-20 - https://domo-2.gitbook.io/brc-20-experiment/ (opens in a new tab)

• Deployments initialize the brc-20. Do not affect state
• Mints provide a balance to only the first owner of the mint function inscription
• Transfers deduct from the senders balance and add to the receivers balance, only upon the first transfer of the transfer function. (1. Inscribe transfer function to senders address 2. sender transfer's transfer function)

BRC-20 tokens have generated significant interest within the Bitcoin community. Enthusiasts are exploring the creation of new BRC-20 tokens.

Infrastructure providers like wallet services and marketplaces have started integrating BRC-20 to facilitate token minting, exchanging and more.

The emergence of BRC-20 tokens serves as a notable example of the strength of open-source communities and collaborative development. When a developer introduces an innovative concept and shares it as open-source, the idea can evolve and flourish through the contributions of other enthusiasts who continuously push the boundaries of the experiment. This open and collaborative environment often stimulates remarkable advancements that push the technology's frontiers.