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What is BRC-20?

BRC-20 is an experimental token standard that enables the minting and transferring of fungible tokens on the bitcoin blockchain. It stands for Bitcoin Request for Comment and is similar to the ERC-20 token standard on ethereum (ETH) and EVM blockchain networks.


How was BRC-20 Developed?

BRC-20 tokens were first proposed in March 2023 by an anonymous developer known as Domo.

The development of the BRC-20 token standard rose from the growing demand for fungible tokens within the realm of the bitcoin blockchain.

While ERC-20 tokens are widely embraced on the ethereum blockchain, they don’t have the same compatibility with the bitcoin blockchain.

This gap acted as the driving force behind the inception of BRC-20 tokens, providing developers with a tailored solution to generate fungible tokens that seamlessly integrate with the bitcoin blockchain via the ordinals protocol.

The ordinals protocol is a system for numbering satoshis (sats) and allows users to attach extra data to satoshis in a process known as “inscription.” This data can be used to represent a token’s value, or it can be used to store other information, such as the token’s owner or its expiration date.

BRC-20 tokens are currently in the experimental phase, but they’ve gained much attention in recent months. This is partly because of their potential worth as NFTs (non-fungible tokens) and their foundation on the bitcoin blockchain.

NFTs are often used to signify ownership of digital art, collectibles, or other valuables.

With BRC-20 tokens, there’s a possibility to utilize them to symbolize ownership of tangible things like real estate or vehicles. They could also be employed to save information about a physical item, like a serial number, or act as a receipt.

The fact that BRC-20 tokens are embedded within the bitcoin blockchain offers them security and permanence. This aspect could be appealing to businesses and individuals seeking a secure method to store important data.

However, there has also been some meme-ing around BRC-20 tokens, with some people joking that they are the next big thing and others dismissing them as a scam.

The future of BRC-20 tokens remains unclear, but if they tackle the obstacles ahead, they could emerge as a valuable resource for developers and businesses.

What Is the Functionality of BRC-20 Tokens?

To generate BRC-20 tokens, a person needs to start by crafting a script file that holds vital information about the token. This info includes details like the token’s name, symbol, and total supply. After that, they need to put the necessary amount of Bitcoin into a special address on the bitcoin blockchain, which goes by the name “ordinals registry.”

Once this bitcoin deposit is done, they can bring BRC-20 tokens into existence by initiating a transaction to the ordinals registry. This transaction needs to carry the script file containing all the token’s essential information.

As soon as the transaction is confirmed, the BRC-20 tokens are created. Then, the person can send these tokens to others or use them in various applications.

Pros and Cons of BRC-20


BRC-20 tokens represent an emerging token standard that harmonizes effectively with the bitcoin blockchain. They bring forth a host of promising advantages.

Constructed on the foundation of the Bitcoin blockchain, recognized for its unparalleled security and decentralized structure, BRC-20 tokens establish a high level of security and safeguarding against fraudulent activities.

Notably, these tokens adhere to the principle of fungibility, signifying their ability to be swapped out and represent diverse values interchangeably.

This inherent adaptability positions them as a prime candidate for diverse applications, including but not limited to loyalty programs and crowdfunding platforms.

Moreover, BRC-20 tokens possess transferability, implying their capability to be smoothly transmitted and received between different wallets linked to the bitcoin network. This inherent feature ensures user-friendliness and broad accessibility across a diverse user base.

It’s worth noting that transaction fees associated with BRC-20 tokens are settled in bitcoin, which ranks among the more budget-friendly cryptocurrencies. This cost-efficient characteristic renders them an economical choice catering to both enterprises and individuals seeking streamlined transactions.

With their versatility extending to applications encompassing loyalty programs, crowdfunding platforms, and decentralized exchanges, BRC-20 tokens unveil themselves as an adaptable solution addressing a spectrum of challenges. This breadth of utility underscores their potential to serve as a multifunctional instrument in diverse scenarios.


Nonetheless, it’s important to acknowledge that BRC-20 tokens do come with certain potential risks attached. These tokens operate on the foundation of the ordinals protocol, a technology that’s still in its early phases of development. This means there’s a possibility of encountering glitches or vulnerabilities as the technology evolves.

Another consideration lies in the scalability aspect. The bitcoin network, while robust, doesn’t offer the same scalability as some other prominent blockchains like ethereum. This could translate into congestion concerns should BRC-20 tokens gain widespread popularity.

Furthermore, it’s worth noting that BRC-20 tokens haven’t garnered the same level of widespread support as other established token standards like ERC-20. This variance in support could potentially result in a limited number of wallets and exchanges accommodating these tokens compared to their more widely accepted counterparts.

Key Differences Between BRC-20 and ERC-20 Tokens

Significant differences exist between BRC-20 and ERC-20 tokens that warrant attention.

To start, ERC-20 tokens operate on ethereum blockchain, while BRC-20 tokens find their home within the bitcoin blockchain.

The ethereum blockchain takes the lead in terms of scalability when compared to the bitcoin blockchain. However, the bitcoin blockchain shines brightly in terms of security and its decentralized design.

Another divergence lies in the application of smart contracts. BRC-20 tokens don’t employ smart contracts, whereas ERC-20 tokens actively utilize them. Smart contracts are like small digital assistants running on the blockchain; they’re adept at automating transactions and various other tasks, adding a layer of efficiency to the process.

Furthermore, the process of generating BRC-20 tokens involves the utilization of the ordinals protocol, in contrast to ERC-20 tokens which rely on the ERC-20 standard. The ordinals protocol stands out as a newer and fortified method of token creation.

The Bottom Line

A consideration lies in the scope of scalability. While the bitcoin blockchain boasts impressive security features, it’s important to recognize that it’s not as adaptable as the ethereum blockchain.

This distinction could introduce complexities when attempting to roll out BRC-20 tokens on a larger scale.


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John Isige
Crypto Writer
John Isige
Crypto Writer

John is a crypto expert and tech writer who covers the latest trends and developments in the digital asset and industry. He explores various topics such as data analysis, NFTs, DeFi, CeFi, the metaverse, technology trends like AI and Machine Learning with clarity and insight. He is passionate about informing and engaging his readers with his crypto news and and data backed views on tech trends and emerging technologies. With over half a decade of experience, John has contributed to leading media platforms including FXStreet, Business2Community, CoinGape, Vauld Insights, InsideBitcoins, Cryptonews and ErmoFi and others.